Q1 2023 EVgo Inc Earnings Call
Okay.
Thank you for standing by my name is Bailey and I will be your conference operator today.
At this time I would like to welcome everybody to the E. V. Go Q1 2023 earnings call.
All lines have been placed on mute to prevent any background noise.
After the Speakers' remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad if.
If you would like to withdraw your question again press Star and one please limit your questions to one initial and one follow up question and I will now turn the call over to Heather Davis you may begin.
Yeah.
Good morning, and welcome to illegal first quarter 2023 earnings call. My name is Heather fever, and I'm the head of Investor Relations at E V go.
Joining me on today's call are copied sorry E V go Chief Executive Officer and Olga.
Oh gosh, southern cobalt, the company's Chief Financial Officer, Jonathan <unk>, Chief Commercial officer will join us for the Q&A portion of the call.
Today, we will be discussing <unk> financial results for the first quarter of 2023 and outlook for the remainder of 2023, followed by a Q&A session.
Today's call is being webcast and can be accessed on the investor section of our website at investors thought E V go dotcom.
The call will be archived and available there along with the company's earnings release and Investor presentation. After the conclusion of the call.
During the call management will be making forward looking statements that are subject to risks and uncertainties, including our expectation about future performance.
Factors that could cause actual results to differ materially from expectations are detailed in our SEC filings, including in the risk factors section of our most recent annual report on Form 10-K.
The company's SEC filings are available on the investors section of our website.
These forward looking statements apply our book today, and we undertake no obligation to update these statements after the call.
Also please note that we will be referring to certain non-GAAP financial measures on this call information about these non-GAAP measures, including a reconciliation to the corresponding GAAP measure can be found in the earnings material available on the investors section of our website.
That I will turn the call over to Kathy Boy <unk> CEO .
Good morning, everyone and thank you for joining today.
What an exciting time for E V go and for the EV industry. Overall, we believe we're participating in a once in a century sexual transformation that is underway and unstoppable as a market leader with a strong track record of delivery to date Indigo was looking forward to pursuing the plethora of value creating growth opportunities that lie ahead.
Building on our strong 2022 E. V go started 2023, but it's phenomenal quarter of growth in all core areas Dolphin operation network throughput and revenue.
Q1 E V go delivered over $25 million in revenue, representing 229% year over year revenue growth.
Network throughput was 17.9 gigawatt hours, an increase of 124% in the first quarter of 2022.
And network throughput is growing significantly faster than electric vehicles in operation demonstrating the leverage in <unk> fundamental business thesis.
You need to increase those in operation or under construction to around 3100 at the end of the first quarter growing 48% year over year we.
We energized a record of approximately 220, new stores in the quarter of 69% increase from the first quarter of 2022.
Utilization on the network is growing rapidly as well the top 10% or maybe go self have utilization greater than 25%.
The top 20% have stalled demonstrate utilization of over 20%.
California taken in its entirety across all metropolitan quarter and rural markets.
Nate why utilization above 10%.
We're seeing metro areas in Texas, Florida, and Nevada, with double digit utilization as well.
These up into the right results from Q1, and those we reported on our last earnings call from the entirety of 2022 are a testament to the long term opportunity at easy go that you've heard us describe since we became a public company a couple of years ago.
Today I'll lean into three key pillars supporting easy go success.
First <unk> business model is leveraged increasing easy adoption when EV sales growth.
Those business grows with it.
Second you need goes robust market position is built on a foundation of value, creating blue ribbon partnerships with Oems government site hosts and sweet.
These commercial partnerships continue to grow and expand.
And third <unk> technology leadership is charting the course for EV charging and EV ownership more broadly Chris.
The means for individual drivers these businesses automakers retailers and government to seamlessly be part of the transportation Revolution that is upon us.
First let's talk about anything goes business model leveraged to the growth in each of these.
The market for electric vehicles is continuing to grow at a blistering pace.
In 2022, there were $2 2 million Tvs in operation and that is expected to grow to over $33 million by 2030, 40% compound annual growth rate.
Bloomberg's 2020 to be net report predicted that more than half of all passenger car sold in the U S will be evs by 2030.
And I'll note optimistically that we've already exceeded the original EV adoption figures for the early part of this decade.
As mass adoption of visa is underway in the United States, There was a need for more charging and more fast charging in particular.
S&P global has predicted that the U S would need approximately 170000 fast Chargers by 2030, and eight X growth from today.
Apartment dwellers high mileage drivers such as rideshare drivers and fleets are all going electric.
And he has done but even drivers who primarily charge at home rely on fast charging for day tripping longer road trip and even a kilowatt hour top ups, while doing errands around channel.
Hence the increase in utilization I referenced earlier that we're witnessing and a growing number of markets across the country well beyond California.
We're committed to building this business in a manner that is sustainable and highly profitable for our shareholders.
As you know you can go to the core business is an asset ownership, we carefully invest in charging infrastructure, where we believe it will deliver our targeted returns through ever increasing asset utilization.
We operate a best in class public network, and expanding that own network to new geographies that pass our rigorous investment hurdles.
And we own and operate charging assets for a variety of fleet customers.
In addition, we apply our expertise in sighting building and operating charging infrastructure to accretive capital light business lines, serving both retail and fleet segments.
You need to extend and are behind the fence offerings to fleet expand EDI goes could competitive position and broaden our customer reach while providing us with additional predictable recurring revenue streams as a builder, operator, and integrator, but insulating us from utilization rates in markets, where we don't want that.
Sure.
Building a business leverage to rising EV adoption has proven to be a sound commercial thesis.
Next let's talk about the important pillar of partnerships to E V goes market leadership and financial position.
<unk> has a long history in cultivating lasting business relationships with marquee partners, they create meaningful commercial win wins.
On the OEM side, you've heard us discuss G M Toyota Subaru and Nissan in particular.
And the countless brand named retail partnerships like target Safeway Kroger whole food home Depot, Lowe's Chase Bank and the recent addition, chipotle, where onsite fast charging create foot traffic for brick and mortar stores and restaurants.
You know he was partnerships with utilities and governments are equally important financial contributors to our growth to date, and we expect them to continue to be.
With respect to our current auto manufacturer partners.
And to provide easy go with capital funding to offset development costs.
They create and pay for fast charging credit programs to attract new drivers to either go or.
Sure. They procure you need those proprietary software solutions to enhance their EV drivers experience.
And with the OEM investment in EV is on the rise we're hopeful E. D goes collaboration with the Oems will deepen further.
G N. The number one U S. Carmaker in 2022, and one of them goes landmark partners is investing more than $35 billion in electric vehicles and autonomous vehicles over the next several years instead.
In February G M committed to producing about 400000 EV during 2024.
Nothing stone to meet its goal of reaching annual production of 1 million Evs by 2025.
GM has announced they will have nine EV models available in the U S. By the end of this year, including versions of the popular studies Silverado pickup truck as well as the equinox and blazer SUV.
Nissan accelerated at DB plans in the U S and committed nearly $18 billion to electrify more of its overall lineup.
Nissan introduced 19, Evs by 2030, an increase from our original goal of 15, they expect 44% of total sales will be electric by that.
Toyota building on their introduction of the fully electric beans that Forex last year is investing $35 billion in evs globally.
Similarly, Subaru, which introduced this altera last year expected to offer several more EV models by 2025 as it continues to ramp its investment in electrification.
With easy go being leveraged to growth in Evs on the road. These are particularly exciting commitments from EV goes partner OAS.
Another important area is rideshare, where <unk> partnerships with both Lyft and Uber continues to deliver both network throughput and revenue as well as positive environmental benefits to the communities in which drivers on their platform live and work.
As we shared before rideshare drivers are ideal customers for fast charging.
Rideshare drivers typically drive more than a day and most people do in a week and they need to be able to charge fast. So they can get back on the road.
With such a user profile, we see Uber and Lyft drivers increasing utilization on our network significantly with Q1 throughput more than tripling from a year ago.
Both of whom are endless are great partners and are heavily marketing the benefits of evs for both their drivers and their writers.
Ooh Bruce comfort electric option is now available in nearly 40 cities throughout North America, an important step in the company's effort to reach an easy only fleet by 2030.
Likewise this is helping drivers makes the switch to EV offering a cash bonus for drivers who offer at least 50 by using a qualified E D.
<unk> are also important partners and even though we provide the charging our site host partners offer great amenities, while the driver charges.
And our relationships with these marquee partners are deepening through our sophisticated network planning tool E. V. Go has identified literally thousands of locations across America, where shareholder value could be created if he could go build a fast charging station at that partner site.
Earlier today in our earnings release, usually go announce we have entered into a new agreement to expand our collaboration with Chevron first launched in 2015 to develop EV charging side, the major California markets.
You didn't go well now author Chevron and Texaco locations across the U S turnkey fast charging solutions with a variety of ownership model, including E V go extend.
There are more than 8000, Chevron and Texaco retail stations across the U S that will have access to go expertise and solution, including fast Chargers up to 350 kilowatts.
Under the agreement <unk> will provide hardware design and construction of charging at these sites as well as operations and maintenance networking and software solutions shut.
Chevron and its independently owned retailer and marketer network will also be well positioned to take advantage of the funding available through the government's national electric vehicle infrastructure or Navy program.
With Chevron is the latest example of a deepening of retailer partnerships.
<unk> is excited about the opportunity to bring more convenient fast charging options you need drivers wherever they need to be.
Okay.
And on fleet.
The deepening of partner relationships is again the theme for this quarter with additional sites I would like to have easy goes current fleet partners.
They may checks a class eight truck fleet and a national food and beverage company are each building their second E. V go dedicated fleet charging site with each also using maybe go optima is their fleet management software.
While it's still early days in fleet electrification. We're excited to have easy goes business grow alongside EV investments fleet operators are making as more vehicles become available to them.
He goes partnership with governments policymakers is critical to our success as well.
And the federal government recently announced it is taking more bold action to spur even faster growth of electrification.
On top of the investments under the bipartisan infrastructure law and the inflation reduction that we discussed on our last earnings call in April the biking administration announced a tighter overall regulatory framework for the auto industry, including new vehicle emission standards through 2032.
Once the new emission standards are in place the EPA estimates that Evs could account for 60% of all new passenger car sales by 2030 at 67% by 2032, notably this with their past even being that forecast.
Now returning to the $5 billion in federal funding through the Navy program that I just mentioned.
The latest is that this particular tailwind it's more like a pale green is at the moment directionally terrific, but moving more slowly than originally indicated by government officials.
The status of this no states have made Debbie awards yet.
Oral states have released Rfps and are reviewing proposals from E V go and others and the vast majority of states haven't yet solicited proposals from the industry, partially because of the state's original program beside neither do incorporate the final program guidelines and buy American requirements that the federal government issued in February .
Notwithstanding the current time lag. However, easy go remains excited about the potential to apply nearly funds to both owned assets and stations deployed under U V. Go extend with the majority of financial benefits likely to be realized in 2024 and beyond.
Similarly, we remain enthusiastic about the opportunities for the expansion and extension of 36 tax credits under the I R E, but while new guidance for the consumer vehicle tax credits had been issued the IRS has not yet issued any further implementation guidance for the 30 C infrastructure tax credits.
The industry is eagerly awaiting treasuries guidance.
And finally, let me turn to the third pillar of B V go success technology innovation.
We've been a technology leader in the EV charging space and innovation continues to be an important differentiator for you to go and creating value for drivers and for deepening and widening our own competitive moat.
I mean think about it now that we can all do one click ordering on Amazon or cashless car service with an app or electronic boarding passes when we fly it sometimes hard to remember the olden times really less than 10 years ago. When we had to place orders by phone or get cash from an ATM or stand in a long line of the air.
For it to get a paperboard and pass the easy industry is young and are aiming to go with to make the EV charging experience as seamless as one click ordering.
This requires a highly sophisticated approach to our own technology.
Well, we don't manufacture that charging hardware, we painstakingly specify the attributes of each charging products, we deploy undertaking rigorous pre market testing in our lab related to charter performance interoperability and reliability.
In fact, a couple of weeks ago E. V. Go hosted research leaders from a number of the department of Energy's National Laboratories Bridge detailed run through of the anatomy of a charging session and the industry wide imperatives for creating uniform reliability and enhanced customer experience.
As you've heard me say easy goes fast Chargers are complex machines that run hundreds of thousands of lines of code and connect in real time to our network management platform and customer facing applications, which in turn run millions of lines of code and integrated dozens of additional platform across the ecosystem such as payment processing.
Industry, and roaming partners and E V O N. The correct functioning of all of which is essential to creating an exemplary customer experience.
Practically speaking EV charges close to 50 different models of the visa network. The day, each with its own unique charging behavior governed by battery performance in software and tech.
Knowledge in marriage has to work not just between EV charging hardware and full software stack, but also between our EV Chargers and the hardware and software of the EV itself.
And between EV Chargers and driver cellphone and between EV Chargers and utilities delivering electricity to the Chargers.
And between EV Chargers and site host retailers and between the EV charging networks, with whom we interact the way.
And he can go we welcome these demands and in fact, we upped the ante looking beyond basic functionality.
We created auto charge plus so the drivers can charge their car without swiping, a credit card or tapping in that.
We built E V go reservations. So a driver can be sure of charter is available when they need what we do.
If you go inside so that Oems can help their customers find the closest charging station and the DAT should their EV.
We built pay with plug here to both find charters and help manage charging which we are currently piloting at all of <unk> charges in the L. A area.
We've partnered with Amazon 'cause it a driver will soon be able to ask Alexa to help them find a charger.
And we built easy to go advantage to give drivers special deals, while they charge and today announced the latest offering here entering into a new agreement with audible to bring trial memberships to go customers later in 2023, delivering audio book EV drivers, while they charge.
For deploying the first 350 kilowatt charter in the U S. The pioneering power sharing technology to where we are today.
Go with putting the benchmarks of what the E V driver experience should be and what our B to B partners will count on when serving their E V driving customers.
With innovation in our DNA you can bet there is more good stuff to come.
With that I'll turn the call over to Andy go CFO Olga to give more detail on first quarter results.
Thank you Kathy.
So it continues to build on our track record of growth and execution in the first quarter of two inches long history.
If you go added about 220, new stores to our network during the quarter.
And stolen operational under construction were approximately 31 hundreds at quarter end.
Both active engineering and construction stole development pipeline ended the quarter at around 3500 stalls.
First quarter revenue of $25 $3 million.
229% year over year.
This significant increase in revenue was primarily driven by continued execution of our Eva go expand construct with pilot flying J in partnership with General Motors.
And growing charging revenue.
Adjusted gross margin declined from 37, 2% in the first quarter of 2001 to two to three months to five 3% in the first quarter of 201 to three.
Due to accelerated revenue recognition of regulatory credits in Q1, 'twenty, two and la where else CFS pricing this year.
Adjusted gross margin of 25, 3% in the first quarter of 2023 improved versus the fourth quarter of 20th wants it to you to animal breakage revenue recognition in the network revenue OEM business line of approximately $2 1 million.
Adjusted G&A as a percent of revenue.
Klein from 273% in the first quarter of 2022.
205% in the first quarter of 'twenty one to three.
Illustrating the leverage even though continues to be alive.
With the investments in G&A, both administrative and grows driven payroll and non payroll investments we reported adjusted EBITDA of negative $21 million in the first quarter of 'twenty, one to three versus negative $18 $2 million.
In Q1 'twenty to 'twenty two.
Cash cash equivalents.
The restricted cash were $106 million to $3.8 million as of March 31st two months it was history.
Capex was $65 $2 million during the first quarter as <unk> continued to execute against our long term charges deployment plan.
Roughly 50% of this number was driven by equipment prepayments and delivery for the rest of 'twenty one to see needs cash capex levels are not representative of this year's quarterly run rate in April illegal raised $5 $7 million in.
That proceeds by issuing approximately 892000 shares of class a common stock at the market equity offering.
We anticipate using the ATM opportunistically going forward and we have 183 5 million of capacity remaining under the ATM program now looking at network trends in the first quarter.
As out of manufacturers release, new models of Evs and ramp production electric vehicles in operation for the IOL.
Increasing steadily driving even though revenues and EBIT goes business model is centered around the leverage to the adoption as Kathy mentioned.
At the end of two answers one to two.
2.2 million Evs in operation and it is estimated that during the first quarter of 2023. This climbed by another 300000 movies, just two and a half Mellon overall on the U S roads.
If it goes network throughput.
Continued to significantly outpace our operational store growth and E V O O gross total kilowatt hours. The spends were seven pinpoint nine kneeland.
124% year over year increase compared to operational growth of 33% and E V O O gross or 53% over the same time period.
This is driven by an increasing contribution of rideshare traffic on our network.
As a reminder, an average commute to drive 11000 miles a year and average rideshare driver drives what is it 6000 miles a year when driving full time.
And realize much more on D C charging.
And that's worked throughput also rose as a result of increased EV battery sizes and higher reliance on public charging bio in your retail customers versus early adopters, who relied mostly home charging.
Average monthly throughput per active customer has increased by more than a third over the last 12 months.
Even though markets with high adoption rates continued to demonstrate solid utilization levels.
Foreign you shows consistent double digit utilization with Los Angeles, being the top markets and passing 14.4% utilization in Q1.
Nationally key markets in Texas, Florida, and Nevada, I am long top 10 performers with consistent double digit utilization as well.
When looking at top performing stores, if you go in that book.
All in high EV adoption rates markets were clearly observing they all right in line with our long term for Stahl and no revenue targets.
Average revenue per store is expected to further increase driven by high utilization with more evs on the road and highest charge rates, probably the easiest to themselves.
When taking a look at top 10% of install and top 200% installed.
By utilization on our whole network.
Kathy mansion, we're observing consistent utilization in excess of 25% and 20% respectively.
Leo is signalling potential for additional markets to realize such levels was increasing adoption.
The average charged rate realized that even though the size is increasing due to improving back there are a couple of villages of the east.
And even goes ongoing efforts to switch to higher powered equipment.
This higher average charge rates are now in that book men more kilowatt hours expense every hour when somebody is charging.
Driving profit the deal is there a lot of projects.
Average net book charge rate is poised for an increased overtime further driven by new vehicles with big of batteries coming online.
Such network trends are reinforcing our seizes on the business being leveraged to EV adoption and proving the advantages of our scalable business model underpinned by attractive public network projects economics.
As a reminder, we deploy capital following rigorous investment criteria and underwrite our portfolios total boss double digit pre tax Unlevered IRR.
Well the assets deployed in the next 24 months.
Expect our capex per store to be between 130000, and 150000 with RAF with 60% of it being labor and materials and the remainder being equipment was an eight to 10 year useful life of field.
Useful life range depends on the type of charge are deployed and the size type.
Capex to install is anticipated to decline as we near twins is solely driven by the English through learning curve on the equipment side.
So I think the capital cost is funding from partner automakers and or grant funding at the local state or federal government level.
As a central to our business thesis and the commercial opportunity in front of us.
Even though plans to continue to grow our public network as easy adoption increases.
The upshot is that one there are 40 meal in electric vehicles on U S roads.
Even though expect to operate 25 to 30000 public stalled.
All underwritten to our internal profitability hurdles.
As we discussed during our last earnings call the public network, because our core business and is expected to contribute 75% to 80% of either go revenue overtime.
Our fleet haps expand and ancillary businesses, what would it mean Nashville and accretive complements.
Our core business model provides an optimal risk return profile to illegal.
Even though it is affirming our full year revenue guidance of $105 million to $150 million and adjusted EBITDA of negative seven to eight to negative $60 million. We expect to have a toggle of 3400 to 4000 DC fast charging installed.
In operation under construction.
End of 'twenty to 'twenty three as a reminder, this metric includes P J salt.
Given the variability of revenue recognition timing of several of our large partner agreements.
Dissipates, some sequential fluctuations and driving them in particular on the extend the revenue line.
For the second quarter twin says when it's a three hour netbooks throughput is increasing compared to Q1, and we expect sequential revenue growth in our core charging business.
<unk> 20th ancestry.
This I will turn the call over to the operator for questions.
Yeah.
As a reminder, in order to ask a question press star and the number one on your telephone keypad. Please limit your questions to one initial and one follow up question.
And our first question will come from Gaped out your line is open.
Okay.
Good morning Catherine.
Everyone. Thanks for all the prepared remarks.
Was hoping we could maybe just revisit.
Some of the comments around Capex and how <unk> is not really representative of the quarterly run rate.
So maybe could you just help us understand how that.
Brian's moving forward.
And then also what does that mean for 2024.
All of that.
Prepaying for as much equipment this year, given the step down in capital.
Yeah. So so that's a good question. Thanks, so much Gabe so let's start from the start we already paid Iraq was $17 million for 2023 assets loss here, just spend 60 meal and a little over 60 mill in the first quarter this year.
Most equipment, which would be paid will be used for 'twenty to 'twenty three assets. Some of that equipment will be used for twins that went before us and so there is a mix obviously heavily loaded towards 20th once it's do you use a spudder the 20th went before usage so the capex.
The quarterly Capex is expected to go down however that does not mean that we will not be.
Preparing for 'twenty, one to four we will we will start do windows in Q3, and Q4, and we will land the year with assets under construction in line with our transcon before expectation. So we're not worried about that and even young. It's also there was a quite large amounts.
We're already the span for 'twenty to 'twenty three offices, you can judge by looking at the first quarter and how much was spent on them last year. So it all it all makes sense for us at all it'll position us for the optimal cash spans and the optimal start after once it once before in terms of targeted.
Stores in operation.
Got it. Thanks. That's helpful. So then again I guess, the $164 million or so on the balance sheet. That's enough to get you through to 2024 is that right.
So it wasn't my daughters of floods Atlanta four correct.
The same the same guidance, we gave or the same notion we gave during our last call that's enough cash to stretch to the majority of 2024.
Okay understood great. Thanks, and then just a quick follow up you mentioned Kathy.
Natalie maybe being a tale breeze, and maybe being a bit slower than anticipated, but could you maybe.
Just given some of the buy American compliant issues around the hardware and can you maybe give us an update on where your suppliers are in that respect in terms of onshore and some U S production. Thanks, everyone.
Yeah. Thanks, Gabe so where are our two suppliers that we talked about last time on the Delta and Signet has factories underway and every indication is that they are full speed ahead, and that's all going to plan and we should have more specificity for you probably by the next earnings call about about the guidance, we're still waiting from some our guidance from the department.
Transportation and the federal highway folks on certain of the buy American provisions. We've also got again, Jonathan Levy, our public policy experts.
On the phone Jonathan do you want to add anything.
I guess just that last point you were making is that <unk> is indicated to a number of policy folks that they're getting a lot of questions about their buy American guidance and therefore, they're planning on issuing an essay queue at some point too. So we've been very engaged with folks in the administration about the.
Kind of unintended consequences as well as the graphical realities of buy America as currently done as Kathy noted in every forum, we have been working with our suppliers to the U S manufacturing for a long time is that we're still working assiduously with them, but in the meantime, there is some clarity that we're expecting to hopefully come soon from the federal government.
Got it got it thanks, Jonathan Thanks, everyone.
Okay.
And the next question comes from James West Your line is open.
Hey, good morning Kathy.
Good morning.
So kathy or all of them.
What's the gating factor now in terms of.
Your build out of additional infrastructure and digital stores as it is it capital is at the utilities I know you don't want to be too far ahead of the.
Of the vehicles, arriving but kind of what's the what are the what are the if you could push it harder and go faster what would what can hold you up from that.
Or why would you not push an order I guess.
So just to just to your point about the utilities the utilities are a.
They continue to be a near term gating item, but it's almost like a predictable gating item now. So we had last quarter. We had a couple of hundred stores waiting utility <unk> and again I think I've said before James I mean, that's just a matter of time, whether like and some of them had been waiting for the utilities to show up to do the final inspection for six weeks, but they eventually will show up so that.
That's that's not a near term gating item I mean, we've got a macro tailwind in the sector that is obviously pushing up into the right as you as you've heard me say many many times, we have identified thousands of perspective stalls it'll create NPV for us with our with our partners one of the reasons I leaned so far into our.
Marquee partnerships with U V go is that they continue to bring us good good good prospects. So over the next five years, yeah, we could put more good capital to work.
But at the moment, we've got a great plan continue to be able to go up into the right for 'twenty three and we got the capital together through 2023 and 24. So it's a it's just really a question of how fast we want to lean in to be kind of.
Going at the right pace, given the macro the macros of the overall economy.
Okay. It makes sense and then I know you've been testing a lot of different pricing strategies.
Over the last several quarters I'm, just curious how that's been going on.
Lower pricing at off peak times things like that could you maybe update us on how but those plans are progressing and kind of what youre seeing in terms of customer behavior.
Yeah sure so well what was seen in terms of customer behavior is a very strong affinity towards subscription plans. So we have three different tiers and continue to kind of experiment because the subscription plan usually doesn't just include actual subscription plus access to cheaper per kilowatt hour rate, but also some.
Other perks like double.
Some of the points off the reservation. So we'll continue to experiment was always bundle what we see a very strong uptake on all three different subscription types would have so that means subscriptions are here to stay and will be essential part of our business going forward and on a in terms of the time of use rates we can.
We'll observe and that our more customer sensitive.
So the more price sensitive customer segments, such as rideshare, theyre very very reactive towards those those signals and we'll see how they alter their behavior to show up at all on that book of cheaper times. However, when we're looking at that kind of like daily commuters, Don which is some response depends in all locations and then.
There is a wide range of maybe.
It may be more affluent locations across the key stated where customers are just modest.
Price sensitive as we originally thought so all of US see this as remain true.
And we continue to.
To refine those and our Chief revenue Officer, who joined US a few months ago. That's one of the main area of cobalt with defense a lot of time on it but we'll be updating the market as we learn more interest and insights from that.
Okay got it thanks.
Yeah.
The next question comes from Doug Becker Your line is open.
Thank you.
So the record number of installations was highlighted during the quarter you just addressed some of the gating items is it.
Reasonable to assume installations increase each quarter over the course of the year based on what Youre seeing today.
We've got a plan for we've got a plan that is.
It is probably relatively stable over this year in terms of numbers that are gonna go lives, but the practical reality is that it always bounces around a bit it sounds like the gating item to utilities. It is nearly impossible for us to predict which utility inspectors are going to show up in which regions of America, and which won't so we got a general plan, we know what we got the <unk>.
For the full year that we're confident of hitting that Mike just bounce around a little bit as we as we go through the course of the year.
Completely makes sense and then the follow up kind of a pointed question, but consensus revenue was toward the high end would be the full year guidance range.
Is that reasonable based on everything youre, seeing and particularly in light of your commentary on.
And Debbie program and just the volatility with the P. S J.
You've alluded to previously.
Yeah, well, we won't be refine in our range at this time, we guided the market only a few weeks ago during our Q4 call.
Not much of a new information has come in since then but we probably next time, we speak well, we'll have them a more refined.
So rather than to inform the market on how the rest of the year will look like and then everybody can jobs because of the concerns but this time, we remain committed to our wider range.
Kind of repeating all the reasons. We explained last time in terms of Bubba qualification and see if Jay because Houston and some still volatility on EV sales fronts. It is sales started off the year quite strong we don't we don't see any recession science, but were observing was so not even halfway through the year. So at this.
Time, we won't comment on a more narrow range of our guidance.
And then well into the game.
Fair enough.
Okay. Thank you.
Thank you.
Yeah.
Your next question comes from Bill Peterson Your line is open.
Okay.
Yes, hi, good morning, and thanks for taking my questions.
Sure.
<unk> seen that extra Expo last week and I'm sure you had a number of conversations with fleets, but I guess specifically are.
<unk>.
Shlomi extend offerings are they more like your rideshare and the comments, we have partners that maybe prefer to use your own owned and operator networks.
Yeah, I'll do that.
Going to toss that one to Jonathan.
Jumping.
Yes, it's a great question. So I think when we think about the extended offering we typically think about it.
A white label offering for retail.
But you can think of the same kind of logic about the flexibility that <unk> has for fleet operators you are very familiar with what we do with Uber and Lyft with access our public network, but we also have this flexibility on where is it that we owned Chargers the customers operate as customers use dedicated stations like we've been doing with the autonomous vehicle fleets, but most of the folks looking to electrify.
Hi, there depots in the fleet space Theyre looking to own the charging themselves and so that is a little bit more like an analogue to that extend the business model and I think some of that is driven by the incentive structures a lot of the fleet's doing early pilots are pursuing funding for those projects, which gives them an incentive to buy it whereas we do know there are.
Or some others out there that will have more of an interest of more of a charging as a service offering that you could go also has where we retain ownership in the customers that can get more of a monthly fee model.
So I hope that answers the question of the concept is being there's different solutions for different fleets, but the majority of the depot fleet operators are looking to own that charging themselves at this point.
We're just not Jonathan.
Uh huh.
Oh, sorry, sorry, so I was just going to add like I said, we've got a couple of contracts with the autonomous fleet guys, where they want what we own the asset. So again. It's this is.
What we said sort of continuously that we will we will meet the customers where they are as long as we can create a nice return profile for easy go commensurate with the risk that we're taking so on and so far we've you know we've.
We can do the Ala extends behind defense with some place that we can do the asset ownership model with others.
Yes, yes, that's exactly right, okay that makes sense to me.
Second question, So you talked about utilization in Los Angeles being the highest market.
If you can give us a feel for where that is.
Looking ahead, where would you want utilization to level out as Pat would you prefer to drive it higher in Norway. For example, or would you want to kind of keep it where it is and just.
Got to add sites to kind of match the growth of <unk>.
Of the cars in the market just trying to get a feel for how you, especially around the pandemic, where you would like utilization could be our debates about trade too much friction, but obviously give you the best return.
Yeah, So Los Angeles was Oh I have mentioned that during my prepared remarks is a little over 14% for the for the Q1, but it is one of our best performing markets in terms of where we want utilization to be over time, we think mid term when we underwrite assets of course, we wanted it to be higher.
And we already observed high utilizations in certain pockets of our network like top 10% of all perform install consistently illustrates utilizations in access of 25%. So that's that's probably a good indicator of where the overall macro can go over time now when we think about near term.
Uh huh.
Here, our focus is on growing the network and grow in the throughput on the networks there could be some.
Near term fluctuations in utilization, while let's say through the quarter, when we build a little faster than the throughput because grow now that wasn't this particular quarter, but that's what I can happen and that is okay with us so in the near term when the network is still small and we're really focused on positioning for upcoming growth you could see some fluctuations.
Midterm to long term we of course are very much focused on growing utilization and expect that all of the key markets will will start showing high utilization levels in the next few years on a consistent basis.
Yeah.
Bill I, just just to remind you that is that we have like in the early days of the Navy program. We had some some charging stations up right in the Bay area, where you where you live which had over 60% utilization because of rideshare drivers now that was that that was actually that was a lot, but one of the reasons that we have pioneered both the innovative pricing.
<unk> Institute of attract people to off peak hours and the reservation is it that there is not a it's not as if we want to stop utilization at 20% right. So what we wanted to do is enable the Texas E. The assets to get us optimally by using technology to allow people to do.
When they want to go and be sure that the charges going to be there.
Yes, it makes a lot of sense thanks for the color.
The next question comes from Mckeith mentally your line is open.
Hey, Good morning, Mohit My Lai from credit Suisse. Thanks for taking the question too.
Could you give us some more details around your arrangement with.
Everyone in the axon business with it.
Most of the Chevron gas stations are owned.
But small retailers.
Just wanted to understand how would you kind of walk through the go to market strategy and the exclusivity on EV charges for a natural right.
Hey, Jonathan unless you do it because you were involved in it.
Yes happy to and thanks for the question I think the way to think about this to start is this is a master service agreement with Chevron right. So that puts us in the position of when those retailers want to do maybe charging we can be that first call, but there will need to be individual agreements executed with them on top of that and.
And Additionally, you should think of it as an opportunity for chevron and Texaco retailers to be either <unk> or be able to leverage <unk> extend and that's actually a pretty sizeable denominator then obligations that could add charging either directly through <unk> ownership.
Actually we see the ones that are along the corridor is might be a really good fit for those public funding opportunities.
Got it.
<unk>.
Thoughts on when we could expect.
First liens.
The retailers.
I think it's going to depend on those individual retailers and you rightfully pointed out that those are independent operators and so as a result, those are going to be some subsequent conversations underneath this master site agreements that we're working together on.
But just to add a little bit of color on me he pays one of those things.
This chevron the expansion of our Shanghai Chevron relationships arose in part because of those franchisees are excited about the next frontier, which is providing fueling for EV. So it's it's it's a.
It's not as if we need to go door, knocking and making cold calls to these needs gas station owners across America Theyre excited about it.
Got it.
That's a great point Kathy one of the things that I'd talk about is the fact that our cup.
Two years ago to the National Association of convenience stores and fuel Thats too we're doing a lot of information gathering.
Excited about Evs and now you can't go to any other conferences without it being mainly about the excitement about evs EV charging the importance of accessing that demographic as a huge growth in valuable.
To answer them.
Right.
And the second question is from Josh needs.
Hum.
Hey, Jim.
This quarter, our garden, rather just trying to understand how to think about that.
For the rest of the year.
Given all the things you talked about a capex funds and get them in and and.
And maybe it wasn't.
Yeah, well, here's an ACM opportunistically, we lost water would didn't raise that much of the trading window was quite short considering the 10-K filing happens a little later in the quarter. So.
We obviously are limited on their use of them you'd see him. It was it was a daily volumes, but again, we'll access it opportunistically will access any other form of finance or no capsule opportunistically as well so we.
I'll I'll limit of that [laughter].
Right.
Thanks, a lot guys.
Okay.
The next question comes from Alex Gabelli Your line is open.
Hey, Kathy.
Thanks for taking the question.
Appreciate it at the outset, all the commentary about utilization and throughput and some of the drivers there.
I'm curious just because to.
To your point, Kathy we're sort of at a very early stages, Uber offering comfort electric and I think still sort of coming out of that.
The Covid era of people not doing rideshare in the first place.
Where would you say we are sort of in the in the stage of that piece of.
Of your sort of network picking up and also curious I think you mentioned the acceptance rate on Evs driving higher revenue per dollar per charging assertion as well we're definitely seeing this the evs can clearly take a lot more charge than they used to.
Curious if you can unpack sort of those two drivers a little further and where you think we are in the process of those things ramping up thanks.
Yeah on the Uber Lyft stuff, we were absolutely in the early innings of been both Uber and Lyft have committed to going all electric by 2030 and their fleets and my goodness gracious there.
Jonathan do you happen to know what what what percentage of single single digit percentages that are even now with them. So it's it is it is very very early days. So the fact that we've tripled.
Year on year from this last quarter just the previous year. It's just it isn't it's a great sign I mean, the Uber and Lyft drivers charge seven times more and they need fast charging then than ER than a regular or the regular retail driver. So we're really really excited about that one.
Why don't you take the second part.
Well I'm sorry before.
The thing that I think especially anything into the fact that Uber and Lyft, both made that 2030 goal and both of that right now they are on pace to hit it by 2025, and I think you take that you juxtapose that with the regulatory drivers, especially in California for more zero emission passenger miles traveled and it is a great opportunity even though it is early days to continue to see growth in that segment.
Yeah and on the charge rate with.
Judy the acceptance rate would've heard the charge as it's for everybody on the call. It's a pace with which are the car can accept kilowatt hours flowing into its battery that is increase in absolutely in line with our expectations. We're doing very detailed modeling looking at all the upcoming models and projections vehicle mixes.
And then delaying it was all in that we're kind of trying to discern what charges will be exhibited and were definitely in line with what we were expecting and we are pretty confident that number will continue to go up with new models being introduced into the market and also newer models the comment the majority of it.
Two of vehicles driving around kind of displacing the older vehicles, which are which are much slower so very great trend and we will continue to write it at either go going forward.
Got it I appreciate the color.
Just quick housekeeping I guess.
A question for me just as far as the pipeline I know that does tend to move around a little bit as far as the active development pipeline.
In this quarter versus last.
I'm just curious if you can help us frame like exactly how thats defined why it's.
Narrow Dan I know, some others were asking as far as youre sort of.
Hurdle rate or how you look at future investment and if thats at play, but just if you can help as far as why that moved in quarter over quarter.
Yeah, so our pipeline ever since ever seen which has hypermobility build everson, arisen, which which has green lighted a little bit before green light. It has high likelihood to be greenlighted by our internal hurdles is included into the pipeline that pipeline is quite large.
And as you could see.
That's three and a half thousand installs and that's on top of stores in operation under construction. So all of those pulse of the soldiers would need to develop over time and right now the focus was on execution and construction versus increase in the pipeline. We think the pipeline is very strong for the upcoming.
Yeah, So and that's why you'll probably not see as much of a pipeline grows versus you should expect to see more stores going operational.
Got it I appreciate the color I'll take the rest offline. Thanks guys.
Your next question comes from Andres Sheppard Your line is open.
Hey, good morning, Kathy Good morning, Olga congratulations on the quarter and thanks for taking our question.
Lot of my questions have been asked maybe I wanted to touch on liquidity for a second.
So 164 million roughly in liquidity versus about $247 million in Q4 of last year.
Got an $80 million I guess reduction in the cash.
I just wanted to better understand how you fund it through the majority of 2024.
Help me connect the dots I mean are we including the opportunistic Atms throughout the year or are we including maybe funding in that assumption I'm just trying to get a better understand how you get from mature. So so Q1 burn was roughly a little over easy meal and as you correctly pointed out.
I'd like to emphasize that the operational burn was only 19, Neil N and the rest was most capital expenditures. So 65 million in that 65 million as I already mentioned earlier on the call onto engaged question. That's not nearly half of that is equipment prepayment for the rest of 'twenty to 'twenty three.
The equipment needs that actually sounds it's once it's once your formula. So you should expect that capital expenditure number not to be the run rate for the rest of the year not to be in line with Q1, but actually to be lower so that I think kind of role well how will help you connect the dots a little bit and on our way.
Do not include the ACM as part of our cash plan and that is kind of cherry on the cake on top however regarding the fund then and when we talk about the funds and there is only one of them.
There are many sources of funds and even go as access than we've been.
In a ground game for many years now and it's been accessed in munis municipal level get grandson stayed grants for a while we continue to do that specifically natty as Kathy mentioned in her remarks, we don't expect much of our inflow of never funds. This year, probably six next year, what would you expect.
A lot of other grant programs influence flowing into they even go this year and also let me remind you that we have our agreements with general Motors, where for every store were putting the durations they pay roughly $33000 to us which they already have the data in both Q4 and Q1 and can continue to do.
As well so that's another cash inflow, which is available to us and it's part of our cash plan.
Got it okay. Thanks, that's very helpful. So in other words the cash burn.
Should be significantly lower for the remaining of the year given that the majority like you said was on the Capex side and.
And that accounts for the majority of this year and some into next year. So the operational cash burn, perhaps will be similar but overall cash burn should be significantly less than what it was in Q1, but if I understood that correctly.
Correct, So and that's so let me just also clarify something so the capex is roughly.
Roughly half half on now might be a little 40% to 45% equipment, 40% to 45% of equipment, 6% to 65% labor.
We prepaid most of the equipment. We haven't finished on the labor side, because when you could put stalls in the durations on those labor costs will continue and we will also started doing some work in Q3, and Q4 and 2024 assets. So you'll definitely see some labor preparing the rate will go down, but just to clarify it's not that we.
Won't have any cut back spending will have some it just going to be much lower than what you saw in Q1.
Got it okay. Thanks for clarifying maybe.
Maybe my last question.
Regarding maybe I mean, it must be frustrating that we know by now the amounts but each state has allocated over the you know per each year over the five years.
Is there anything that can be done to try to accelerate that process I know it doesn't obviously you rely on depend on on you but.
I mean is there anything that can be done you know as an industry or individually to try to accelerate that process.
Again, given that we have the numbers, it's just a matter of the actual bids being deployed which it.
It sounds like 2024 will be the earliest.
Yeah, John I don't know Josh.
Jonathan do you want to see if there's something we spent a lot of time on this and as both John and I are former government officials in our prior lives. So we are familiar with the with the tooling and throwing but maybe what would you say.
Yes, it's a good question Andreas I think first of all I don't want to give short shrift to the states that have moved right. There are a couple that we've submitted applications to a number of the states that have already opened.
Including some states that moved really promptly.
But you have to keep in mind that there isn't one Navy program. There are these 50 individuals maybe corridor programs that each state gets to decide the specific parameters and the federal government was a bit delayed on finalizing their technical minimum standards as well as the buy America guidance, which meant that some states that may have otherwise been ready to go they were.
And then having to revise their plan or make other adjustments and so we're expecting more to come.
There are still some states that we think will make awards in 'twenty three but the question is whether the projects go you're on reimbursement for most of those types of programs. So the funding as Kathy said, we expect the bulk of that to be 2024 and beyond but what we can do about it is continue to engage with them both directly on a state level as well as through organizations like <unk>.
The American State Highway transportation officials organization, and that's what we and our policy team continue to do working both with the whole industry and directly to make sure that they have our best practices for connected to what's in other ways to know here's a great way to run. These programs is all good.
That said we've been in the granite team for a long time, whether it's nervy, the California grants that we announced last quarter.
Earlier, this year, rather or the utility make ready programs that are all important opportunities for funding all of those will continue and the timing will be a little bit of an ongoing.
Saying that we have to keep incorporating.
Got it okay. Thanks, Kathy Thanks, Holger, thanks, Jonathan Congrats on the quarter again I'll pass it on thank you.
Thanks Aldo.
And our final question will come from Brett Castelli. Your line is open.
Hi, Thanks for.
My question.
Just curious on an update on the EV go renew program and sort of upgrading those.
Boulder 50 kilowatt Chargers kind of where are we at in that.
That process.
Yeah right. So we've got a we've got the program is underway and we're gonna be we're going to be upgrading hundreds of them over the course of the year and the program is on track and what we're what we're doing as as well as we're actually integrating some communications efforts in the E. V go renew so that so the what we've what we've discussed.
Is that sometimes the Chargers are I felt that sometimes there is an opportunity for driver education on how to actually make the charging work work more effectively so the program is becoming all encompassing as I think I described last time and it's it's it's on track it's on track.
We've got a few hundreds of them are going to get them over the course of the year.
Yeah, and I would like to add that as of the end of the first quarter as a result of the new efforts and as a result of us continuing to deploy high power charges those 50 as well.
For the first time, well less than half of our network. So we could already to clearly see the numbers as well that the efforts bear the fruit.
Okay, and then any color on just in terms of Capex for this year associated with that program.
Just just kind of ballpark.
We do not give guidance on that number but it should be.
Higher.
Quite a bit higher than what we reported last year for that.
Okay.
Thank you.
At this time I will turn the call back over to Kathy Zoe CEO for closing remarks.
Well thanks, everyone look E V go had a great first quarter of 2023, our strategy is showing the early proof points that it's working with throughput growing massively and it's exceeding idiot E. D D I O growth in our own stock or.
The outlooks for you to go and the opportunity for fast charging in the U S is getting better and faster. We believe our business is on a trajectory to scale rapidly and deliver really nice returns and we look forward to speaking with you again next quarter about the progress thanks, everyone.
This concludes today's conference call you may now disconnect.
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