Q2 2023 EVgo Inc Earnings Call
Ladies and gentlemen, thank you for standing by a welcome to the E. V Go Inc. Q2, 20 twenty-three earnings call.
Would now like to turn to call over to Hazard Davis, Vice President Investor Relations. Please go ahead.
Good morning, and welcome to Igby goes second quarter 2023 earnings call. My name is Heather Davis.
Investor Relations at <unk>.
Joining me on today's call our copies boy.
Chief Executive Officer, and got a sketch chief operating officer, we'd like to send our congratulations to our CFO . Okay. I should have written kovach and the arrival of her babies Stephanie Lee The company is F. C. P. U of a counting an interim chief financial officer will cover our financial results of quarters.
Today, we will be discussing Igby goes second quarter of 2023 financial results and outlook for the remainder of 2023, followed by a Q&A assertion.
Today's call is being webcast and can be accessed on the investors section of our website at investors Dot E V go Dot com.
The call will be archived and available there along with the company's earnings release, an investor presentation. After the conclusion of desktop.
During the call management will be making forward looking statements, but are subject to risks and uncertainties.
Including expectations about future performance.
Factors that could cause actual results to differ materially from our expectations are detailed and are a SEC filings, including and the risk factor section of our most recent annual report on Form 10-K, and quarterly report on Form 10-Q.
The company is S. A SEC filings are available on the Investor section of our website.
These forward looking statements apply as of today and we undertake no obligation to update these statements after the call.
Also please note that will you won't be referring to a certain non-GAAP financial measures on this call.
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 Cathy Zoe you've you've got a C E O.
Thank you Heather and good afternoon, everyone.
I'm. So pleased with the continued strong performance and results. The easy go team has achieved in the second quarter.
Before we get into the details I wanted to address the C E O succession call me announced today.
Like we've seen I've decided to retire a C E O and from the boys affected following on next earnings call expected around November 9th.
After thorough consideration and process. The board is the side of the <unk> will be the next C. E O a V V go.
<unk> joined the board of easy go shortly after we went public and so does that lead independent director since dotcom.
I just wanted to save it and he'd get a highlight of my career, leading easy go go with 50 person private enterprise focused on again Nathan E V sector and 2017 to what it is today a market leading public company, serving nearly 700000 customers across the trillion dollar easy market.
He goes talented team, we built durable business, you'll be unprecedented growth in charge of deployment network utilization in company revenues.
Companies next opportunity license scaling the business to meet the ever increasing and evolving fast charging demands and I'm absolutely confident E. D. Go will be an extremely capable hands with bought her a C E O.
I've been fortunate to know and to work with butter in his capacity as a member of the V goes board and I've seen firsthand the breath of this house.
For those of you who are unfamiliar with butter. He has a 25 year veteran of the clean energy transformation and utility space.
Spider has significant executive leadership experience overseeing large customer facing energy organizations like national grid, USA and direct energy.
[laughter] experienced the lines ideally with the opportunity ahead for easy go.
He has a deep understanding of the dynamics of our business what was the right person to build on our successes and work with our outstanding Executive team to take me to go to the next level. He embodies the energy and vision that will take this company farce.
I want to offer my sincerest, congratulations to my friend and colleague butter on this appointment and express to all of you might be yeah. So the opportunity to continue working closely with butter and my fellow he'd be go call within the management team to ensure a smooth transition.
I will remain fully engaged in day to day C E O until barter, formerly steps into the Rolling November after which I will still have an active advisory capacity until the end of the year.
I'm grateful that we are able to take the steps and put in place a transition plan that will set the company up for continued success.
Let's now move into a discussion of easy goes tremendous second quarter results.
<unk> had a phenomenal second quarter growth momentum continued across all key areas of the business Dalton operation customers utilization network throughput and revenue.
Easy go with cheese over $50 million in revenue and incredible nearly five fold year over year increase in network throughput more than doubled versus Q2 last year.
Results like this demonstrates the ability of easy goes D C fast charging business model to scale rapidly alongside EV adoption.
We expect it at an inflection point in our business, but it is coming faster than 90 anticipated.
Currently there under 3 million new visa in U S. Rose today, just imagine the possibilities for easy go when electric vehicles are adopted at scale over the next 10 years or even better position to capitalize on our first mover advantage.
Coupled with a rigorous underwriting criteria for asset deployment and multiple possible capital funding vehicles, the future of easy go was brighter than ever.
It is truly exciting to be accelerating the electrification of transportation in the United States through EV charging.
E V goes network of over 2500 operational D. C. Solves delivered an impressive 24.9 gigawatt hours and a second quarter with strike in all sectors.
<unk> more than doubled and sleep throughput through xxxx.
Total charging such as in the network increased 85% you over a year.
So we put it on the network grew faster than session growth is significantly higher than operational solid growth <unk> the growth of the throughput accelerated from the impressive growth demonstrated in the first quarter.
And the second quarter, we achieve double digit utilization across the entire network for the first time.
Utilization exceeded 15% at 30 per cent of easy go charging cells in June .
Still only around one per cent E V adoption in the U S.
Go with experiencing these teams utilization and above in California, as well as Marcus outside of California, including Las Vegas, San Antonio Dallas, Houston in Hartford, New Haven.
Twenty-seven different metropolitan areas had utilization above 10% in June .
This isn't a surprise for the team to Dv go we've got over 10 years of experience in navigating the complexities of fast charging in the know how and relationships to rapidly expand that network to meet the needs of easy drivers and shareholders alike.
Key strengths include first easy go has built a growth engine, we identify great location, we work collaboratively with Oh, Yes utilities suppliers site has been contracted to construct and operate charging infrastructure.
Definitely.
Go with a financially disciplined operator, we will only build sites when they are projected to meet our double digit return requirements.
Third.
Either go with a technology innovator.
As a leader and a young and evolving sector.
Developed in best in class hardware I T for charging all levy's and proprietary software to create a seamless charging experience. This.
This includes our mobile App auto charged plus easy go advantage Plumped sure easy go reservations and easy go inside.
Our in house technology developed under the direction of a world class Engineering teams is a major differentiator India industry.
And fourth.
Go renew a comprehensive network upgrading program is in full flight after assessing our original equipment in the field, we've upgraded or replaced over 350 stalls is strategically important locations and will continue to update the network as technology evolves.
As you know easy go currently operates one of the largest D. C. F. C E V charging networks in the United States <unk>.
This collection of nationally distributed assets will deliver more throughput and generate more cash is newly these are sold driving operating leverage increasing castillo and driving higher returns on invested capital.
Through our portfolio partners Indigo currently has thousands of perspective locations that are pipeline that cats are internal hurdles for investment.
This pipeline of locations provides ample opportunity for EV go to capture more market share and create shareholder value by applying the same rigorous principles of financial discipline, we've deployed over the past six years.
We are in the very early innings for the sector with much much more demand to come today.
Today, there are roughly 30001st charges in the U S and by 2030 industry analysts estimate the country will need more than 300000.
No single company will meet that demand alone, but we believe our experienced flywheel and first move advantages position us to remain a charging leader and we look forward to continuing to execute on our strategy of discipline, the vestments and the fast charging space, while continuing to work closely with our OEM partners.
Let's turn to an update on general Motors, our partnership with G. M remains strong and we will continue working with G M to expand our charging footprint and bring more fast charging to communities across the U S.
In fact easy Goin' G M announced yesterday that we have reached a milestone of 1000 D. C. F C solves deployed as part of our partnership today.
Leadership from both easy go at G. M commemorated the occasion with a ribbon cutting in Metro Chicago on Tuesday, with speakers from our utility partners and the state government joining us.
We've added a new G M O T M sinus to our charges, we've identified locations, where canopies makes sense and we're working together on immigrating locks connected into the network and a timetable that will meet the needs of G. M drivers.
As you know either you get like stone is our capital like business model for easy go bills and operate charging stations on behalf of our extent partners and it's success demonstrates easy goes agility to serve evolving market segments in a creative manner.
He goes seminal extended contract with pilot flying J is going exceedingly well, we're making progress with the 2000 install PSA program, which translated into considerable revenue for easy go in this quarter.
Yesterday's first Slicer commission with more coming soon it'll be <unk>.
<unk> new locations to be operational in the third quarter.
E V. Goin' pilot also apartment for Navy Grant applications and were recently awarded the majority of funds in the first is a funding from Ohio.
Fact every P F. J E. D go extend application we jointly submitted has been awarded funds.
In addition to extend wins the pilots easy Goin' Meyer also teamed up for several extended sites in Ohio that were selected progressive voice.
My hair is a great site posts for easy go own locations and they are seeking to bring easy charging some more of their stores through the extent model.
Given the national interest around that'd be grants easy goes business development 19, as an active commercial discussions with numerous others for extend deals.
Can you go success with T F. J, both in terms of network deployment and funding wings has put us in the pole position to partner with retailers, who are keen to participate in the fast charging games.
On sleep.
<unk> continues to scale, a strong partnerships with Uber and lift making electrification accessible for rideshare drivers via a partner specific charging right across the country.
This segment will continue to climb as more electric vehicles become available to rideshare drivers.
Or suite hobbies business also continues to go with an exciting milestone cost for this quarter when he'd be go team operationalized, a new dedicated 18 still charging hub site is San Francisco with one of our autonomous vehicle partners.
Take or pay contract is an anchor in the hubs business, which we see as a significant area of growth of the medium term is a V robo taxi and last model delivery companies adopted all electric fleets.
And now, let's talk a bit about charging technology.
Following the European auto sector's convergence to see the Doctor as a 2014.
And textbook I'll switch over to C. C S for its European vehicles or 2018, the presumption had been that the U S would follow but.
But last quarter, a number of leading automakers announced plans to migrate to teslas next connectors for model year, 2025, or 2026 vehicles to be sold in North America.
What does this mean for the industry.
[noise] bridges to a standard connector will improve the customer experience and hence accelerate the march toward an all electric future over the medium term.
In the meantime, millions of C. C S and <unk> will need to be supported on public fast charging that works for us to come and he'd be go will serve them all.
An hour sustained support for electric for all ego currently charges over 50 different models of <unk> with a variety of connected pipes, including C. C. S <unk> and Tesla. So we already live in a world of multiple conductors and remain committed to serving all levy.
Parents will be integrating Mexican decades into the E. V go network as soon as they're available and have gone through appropriate reliability and safety testing.
Let me turn to financing.
River on charging infrastructure is longterm value opportunity easy go with deploying a holistic diversified approach to funding our capital needs.
Historically, we have complimented our own investments with OEM part refunding public cramps and regulatory incentive progress.
E V go raised over $123 million in net proceeds through a primary equity offering in Q2.
Well he'd be go with already projected to be well capitalised through most of 2024 prior to debase. The equity raised both did our balance sheet and created runway to pursue a rapidly expanding set of value, creating charging investments well into 2025.
The 20th twenty-three, we expect that most <unk> Oh installs that will be energized are being constructed under our general motors agreements.
Under this 97 million dollar program G. M pays easy go approximately $33000 per stall shortly after the stall is operational.
<unk> source of capital to EV go contributes roughly 25 per cent of the capital Bill costs for G M sauce.
Checking to build roughly 700 G. M style, this year, which would amount to $23 million in cash funding.
And he was outlined in previous calls even go has a long history of applying for winning and building charging styles that receive a variety of public private incentives.
Recently, we've highlighted $10 million of utility make ready funding at $7.3 million of <unk> is it something awards, what's your only a few examples of the many programs available to easy go.
Emblematic of the massive funding available the federal government. So that'd be program just getting underway is a larger version of the state and local program easy go has been successful in securing funds from over the last decade.
As a reminder, maybe funds will be distributed through 50 different state level of progress and if passed as precedent will take nine to 12 months to get from Rfp's. The selection of Awardees. Following that contracts are executed between state department of transportation and awarded which too can be a multi month process and then they should construction doesn't get underway.
Typically reimbursed awardees. After construction is complete and stations are energize. All of this said Igby goes combination of market leadership Grant application experience and track record of of being a good partner should government policymakers positions us well for securing that'd be grants we're off to a good start.
E V go in our extended partners were awarded $13.8 million for 20 sites under the Ohio That'd be program, winning 75 per cent of the awards and that states first round.
This was a tremendous success for our operations branch network planning of public policy teams.
Several states, including Colorado in Pennsylvania are reviewing nervy applications right now and are expected to announce award using the coming months.
Numerous others, including Virginia, Georgia, Oklahoma, Indiana, and Michigan are earlier in the process with requests for proposals or qualifications currently open to Jesse projects could start sometime in the first half of 2024 after contracts are signed.
In terms of government tax credits sections 30 C of the I R. S code officially the alternative refueling property tax credits.
Can all set up to 30% or $100000 per stall of charging infrastructure costs and now has a provision allowing transfer ability of the credit to qualified and registered taxpaying entity.
As such 30 C credits are considered when he'd be go makes investment decisions aware to extend our network.
Anticipate detailed guidance from the I R. S. Before the end of 2023.
Notably diverse funding sources can be snack for example, a cell that is part of Igby goes G. M program received a 33000 dollar Capex. All set in addition, some locations may be awarded that'd be grants based on their corner location as well as be eligible for 30 C credit avail.
Availability of multiple funding sources extends the geographic footprint of stations that past E. V goes investment hurdles. It makes those locations more profitable a genuine accelerants igby goes business.
With billions of dollars of funding support becoming available from federal and state governments were excited to put more capital to work to increase shareholder value.
And now I'd like to turn the call over to Dennis maybe goes world-class C. O O to highlight some of the key elements of the growth engine rebuilt <unk>. Thank.
Thank you Kathy.
Cause I started it maybe go just over 18 months ago, we've been continuously expanding our team's ability to build a best in class charging network.
<unk> has created a growth engine that can scale up to meet fast charging demand and we had our best quarter ever just now with revenue growth of 457% a throughput growth of 147% compared to a year ago. We also condition 210 stalls in the quarter.
2500 operational stalls today.
Let me set the table by describing what we know definitively will bring customers to our network.
Drivers value three things the most.
First having lots of stalls at a site so they never have to wait.
And having fast Chargers available so they can fuel up quickly.
Third having a reliable charging solution that works right on the first drive.
Cover our progress in all three areas and begin with an update on <unk> typical station configuration.
Kathy mentioned, we've identified thousands of value, creating new locations within our portfolio partner network for future station bills.
Currently target a minimum station size of $6 and we aim for eight to 10 stalls decided host has space available.
Point Ultra fast 350 kilowatt Chargers in locations that are typically near great amenities, such as shopping dining inconvenient stores.
In certain locations you'd be go will soon be adding canopies as well as pull through charging for large trucks.
Across the entire network by the end of 2023 do you expect to have approximately 30% more stalls per site and 50 per cent higher maximum power precise than we did at the end of 2022.
[noise] station configuration updates, you'll several important customer benefits, including faster charges less likelihood of waiting and higher uptime.
Generally across the developed a cycle, we are beginning to see timetables improving.
Go supply chain is operating efficiently.
Managing our hardware suppliers, well with longterm contracts in place with rolling forecasts through our partners can manage their supply chain can be T V goes needs.
Construction lead times are relatively flat, which is expected given the fact that we are now building larger site.
Local government permitting is generally getting faster as these authorities getting experience and familiarity with fast charging infrastructure deployment.
Utilities remain the longest pulling the 10th.
A combination of long lead times, where switch gear and Transformers, along with internal resource demands for wholesale electric vacation is slowing many utilities.
You'd be goes working closely at the most senior levels with our utility partners. So they understand our project pipeline and how they can support our efforts to improve engergization.
For sharing sites specific load roadmaps that are based on our network plan and that is resolved it in a higher total number of stalls being energized this quarter than last.
One pilot program that will be launched this year has this particularly excited inane.
It enables us to perform more task in parallel with the utility.
In the early results show, a 40% reduction in Engergization lead times.
In addition to building the rapid growth engine for tech enabled infrastructure deployment, where relentlessly focused on enhancing the customer experience.
Last year, we announced to either go renew program of continuous improvement effort, which builds on a regular maintenance program with a robust plan to upgrade <unk>.
[noise] cases retire charging stations.
In 2023, we expect to renew hundreds of salt and are on track to meet our goals.
Building on Kathy's comments about integrating next conductors into our network will use the renewed program listens to evaluate which stalls to retrofit with next.
Mhm technology's advance and the number of D. V models grows we remain committed to the point of your equipment and software that will deliver the optimal customer experience and an efficient use of capital.
Internally, we track an important metric recall, one and done.
Which is the percentage of time, a customer have a successful charging you experienced within a reasonable time window on their first try.
It's a success metrics as opposed to an availability metrics, meaning.
Meaning of the new tracks all off and the customer gets what they came for Ah completed charge.
We're aiming to achieve wanted done success rates of over 95%.
Already improved six percentage points this year.
With literally hundreds of thousands of charging sessions a month charging attempts can be unsuccessful for a variety of reasons associated with the vehicle the charger.
Driver or connections between any of those three.
<unk>, even if the chargers themselves are the culprits of an unsuccessful charge attempt we view it as our responsibility to create a seamless charging experience for our customers.
The good news is that over the past four months <unk>.
He goes one and done Tiger team has made excellent progress in identifying and running to ground. He causes of unsuccessful charge of taps.
The charge your side, we recently identified two software bugs that were causing charging issues for customers and promptly rolled out updates.
And we're collaborating with our partners to ensure that updates.
Making to their E d's and software work with our charges.
<unk> innovation lab and satellite locations <unk> facilities would come in handy on this process.
In terms of driver education, maybe go.
Go recently highlighted a step by step charging tutorial in our online video series charged Hawk.
To help new E V drivers feel confident pulling up to a public charging stations.
It turns out that a sizeable number of first time D. V drivers don't realize that the first step to a recharging Mr plug into connector because this order of operation the opposite of what we all are to do when we went to a gas station.
You'd be go won't rest easy until we identify and solve every technical E V charger or driver education problem that might stand in the way of reaching 100 per cent wanted done success.
I've spent my career reading complex operations efforts across the tech space and I can say unequivocally that it'd be go we have built a growth engine with the process is in place to improve efficiency all delivery value for all of our stakeholders.
With all relentless focus on advancing first move a technology superior operations and customer experience.
Complimentary by a backdrop of arising sectorial ties you could go was poised for strong growth going forward.
With that I'll turn the call over to Stephanie to discuss our quarterly financial results.
Thank you Dennis.
Cathy Dennis mentioned EV go reported record results for the second quarter of 20 twenty-three demonstrating the continued strength of our business and our strategy.
The company, we are leaning into the incredible opportunity ahead of us to meet the demand that we believe is coming.
We grew revenues across our core revenue stream during the second quarter.
Second quarter revenue $50.6 million grew nearly five year over year.
Nearly double from the prior quarter.
On a year to date basis revenue in 2023 has already surpassed the revenue regenerated and the entirety of 2022.
The significant increase in revenue was driven by or equal extend contracts with pilot flying J in partnership with G M as well as our growing retail commercial and OEM charging revenue.
Extend revenue with $33.3 million in the second quarter with a vast majority of this exceptional revenue increase tied to hardware sales P. S J and to a lesser extent the construction of P. J sites.
Revenue recognized for P. F. J hardware sales is expected to be minimal and two three and potentially to for us as we await the availability of file a complaint charters.
As a reminder, there are no Bob are compliant 350 kilowatt charters currently being manufactured in the U S and our suppliers are working hard to complete construction of the U S facilities.
How 'bout compliant charters.
Be fully certified and tested before products can begin shipping.
Adjusted gross margin with 25.4% in the second quarter of 2023, which was consistent with the prior quarter.
When compared to 37.3 per cent in the second quarter of 2022 <unk>.
A year over year change was attributable to a lower mix of high margin regulatory credit revenues and two two of 2023.
Just a G N E as a percentage of revenue improved from 256 per cent and Q2 of 2022 46 per cent and through two of 2023 it.
Illustrating the leverage E. D go continues to realize from its existing network and ongoing investments in infrastructure people and processes.
Adjusted EBITDA with negative $10.6 million, and two 220 twenty-three versus negative $19.8 million into 220 twenty-two reflecting the flow through the revenue growth.
During the second quarter cash cash equivalent and restricted cash grew to $257.4 million as of June 30th.
This includes $5.7 million of net proceeds raised under our a T. M program, followed by an additional $123.4 million net proceeds under our equity offering completed during the second quarter of 2023.
We added approximately 210, you start off to our network during the second quarter installed in operation or under construction for approximately 3200 as of June 30th.
As expected, we reduced our capex spending by nearly half from the previous quarter with net capex a $32.6 million.
We purchased most of our equipment needed for 2023 spelled appointments in the first quarter of this year.
In Capex for the third quarter of 2023 is expected to remain lower as a result.
Capex will begin to ramp backups in the fourth quarter of 2023 as we begin mobilization for style is expected to be operationalized in the early part of 2024.
Her all Capex for 2023 is expected to be lower than capex for the prior year.
We will continue to remain agile and our supply chain and capacity planning to ensure that we can put that appropriately in response to the ever changing regulatory landscape, including Papa that'd be opportunities and that while continuing to capitalize on our position of strength and girl R spell base in a financially disciplined way to meet the ever growing.
<unk> <unk>.
Moving onto our full year 2023 guidance.
He'd be go with updating our full year revenue guidance to a range of $120 million to $159.
Charging revenue accounted for 25 per cent of total consolidated revenue for the second quarter of 2023, we.
We anticipate sequential quarterly growth and are charging revenue in the third and fourth quarters as we continue to expect quarter over quarter and year over year throughput growth and increases in our total customer accounts.
Extend revenue accounted for 66 per cent of total consolidated revenue for the second quarter of 2023.
The vast majority of the extent revenues generated in the first half of 2023 four related to equipment sales to P. F. J and we expect that extend revenue for the second half of 2023 will be predominantly comprised of construction related revenues.
Clinton sales to P. F J for Bob a complaint charters may not materialize to any significant degree until 2024, although our suppliers continue to make good progress on the build out cause the U S manufacturing facilities.
Our guidance as in Sam Barbour equipment sales to P. F J and the second half of 2023.
T V go with updating our full year adjusted EBITDA guidance to arrange a negative $78 million to negative $68 million each.
<unk> will be making additional investments and the growth engine, we've created including dedicated fleet hubs.
<unk>, <unk> and <unk> and the second half of 2023.
We continue to expect to have a total of 3400 to 4000 D C fast charging spelled in operation or under construction by the end of 2023.
A reminder, this metric includes P F J sauce.
With this I will turn the call over to the operator for questions.
The floor is now open for your questions to ask a question. This time. Please press star one on your telephone keypad at any point you would like to withdraw from the queue. Please press star one again, we ask that you. Please limit yourself to one question.
And if you would like to reach you afterwards for another questions you may well.
Will now take a moment to compile a roster.
Our first question comes from the line of James West from Evercore ISI. Please go ahead.
Hey, good for everybody.
Hi, James.
Mmm, congratulations on a great run to either.
And all the things you've done for the company you'll be sorely missed.
But it sounds like you feel pretty good about but I'll take it over so.
<unk> to him as well congrats do you want an owner very successful <unk>.
Thank you so much it's yeah, it's been a joy.
I guess.
My question.
Really interested in this inflection point, that's happening with respect to throughput versus stole gross cause it seems like if you just wrap it up really nicely here, which will be.
With no it's kind of unfolding.
No. It was probably a function to a lot of factors but.
Is it does it is it mostly new D V models that are coming to the mortgage bitter Tesla.
Tesla is it you're the customer experience is improving and so you have more repeat customers you what do you think's. The main thing that's driving this or is it just <unk>.
Well I think we should hire you James that is actually all of those things.
Well I mean, we we we look at this with delight as well so yes, absolutely what we're seeing is more <unk>. The compounding effect as we talked about before is all those <unk> that are coming to EV go are more powerful they've got bigger batteries in and sat in the ability to charge even faster. So throughput goes up for every sort of 15 minutes.
Getting your pumping through more electricity and we've got we've got increased utilization because they've got high mileage drivers coming onto the network and I think that's one of the things that were kind of I'm excited about is a possibility that we're seeing even folks with garages. It looks like they're coming to charge at our fast charging stations. So all of this is for US it's just like.
It's like our our thesis is great, but even better than we might have thought.
Great got it thanks Kathy.
Thank you.
Our next question comes from one of <unk> Tears for me. Please go ahead.
Alright.
<unk> I was wondering if you could just kind of give me some guidance on where could the upper bound of utilization go in the near term in the medium term I know you guys been sharing more of the past couple of quarters and I'm, just trying to get a sense of.
I mean, I really have no idea I don't even think about it.
No Chris is a great question. So so there's.
We model it with what we call an equilibrium utilization so when we when we sort of do our math on is it is a station going to pencil to our double digit returns, we basically sort of.
Tap tap it and like kind of a 20th between 20 and 25 per cent just because we feel like if it's that good there's there's going to be other stations it'll come into the market. So we we model conservatively with that said [laughter]. We regularly have utilization that stations that is way higher than that I mean, we've got we've got some stations on the network right.
That are over 50 per cent mutation we've had.
At a different time periods, where I've had intense rideshare usage on certain locations, we were up in the sixties and fifties so what.
What we're doing to actually give us even more runway for that is adding bells and whistles like being able to make reservations right special like Super off peak rates for rideshare all of those like sort of tools software tools that you add onto the basic infrastructure will give us an ability to to actually achieve.
<unk> utilization levels far greater than what we actually model when we do our underwriting so in the short I don't know how to answer it to you to to model realistically. What we do is we model conservatively and then we we surpassed expectations of when we see it on the network.
Okay, and then are you I mean isn't it.
Miles away from competitor experts energy Fucus Charger and you see lower utilization, you're <unk> I just wanted to get a sense of how much runway at charter cars coming up that I worked for some charges go on on the network is that something that you build into your model as well.
We built rebuilding the best we can the pace at which needs new charges are going to come on you know with the intelligence that we've got so we're constantly sort of we have a very cool detailed network plan National network plan that goes down to the census block. That's what we're doing is we're overlaying at any given time and we update it continuously at any given time, how many charges.
What are the easy penetration there what are the sales forecast, we thank for those metropolitan areas and down to the census block level. What's the density of multi unit housing and it's kind of this big mash up to forecast, what's what's the need for the next incremental marginal fast charging station in that location and it turns out historically, we've been pretty darn good at at four cast and what's gonna work out.
Okay I appreciate the detail <unk>. Thank you.
Chris.
Our next question comes from a line of Alex Spray Bowl from Bank of America. Please go ahead.
Hey, guys. Thanks for taking my question Mccririck drugs to you, Kathy and and I guess, Olga as well, giving her recent announcements.
<unk> <unk>.
Yep. Thank you so much I I I.
<unk> some of the comments are you talking about there Cathy relative to somebody snacks movement. Just curious we saw the other day right. This sort of consortium of automakers talking about you know investing rather directly you know what I thought about it it actually sounded a little bit like a large extend partnership I'm just curious as far as like.
Your position to your thoughts around this standardization or or sort of being more of a partner. If you will to the <unk>, giving these <unk> and have a quick follow up after that.
Yeah, Hello allies, when will we might need to hire you and Jane who actually [laughter] no. It it's exactly right look you know the the macro backdrop as it works. If we're gonna go to hundreds of thousands of charges by 2030, and the Oems have an imperative to sell the E V that they're investing trillions of dollars in manufacturing and we need more fast charges more quickly so they're coming together and putting at least a billion dollars.
On the table to accelerate that deployment and we we are excited about helping them do that I mean, we are as you point out where ideally suited we got it what to.
To do it either as a sort of a joint owner and B b in the consortium with them or to do it as an extent partner or anything anything. So we're we're excited about it and we're having conversations with them to keep them excited about it but we see this as an opportunity to accelerate transportation electrification and get more people in Dvds more quickly I think well you know it's it's all good for us.
Yeah. It makes it makes perfect sense, just a little bit more maybe have a mechanical question uhm. Okay. You don't want congrats on the extend revenue big jump there I guess, a little unfortunate with the the bomber requirements that it'll get choppy here uhm, but just I'm looking in the queue I see that the the carbs and extend it seemed to be kind of a line at the revenue I'm just curious as far as the <unk>.
You guys expecting that business how're, you sort of see that dry reading around between equipment sales more construction. If you can elaborate on that a little bit through the rest of the year.
Yeah. So I think I think you know doing the last call over might've broke down the sort of the different buckets of of of revenue that we get from extending we don't talk explicitly about the margin from each but we can give you some directional indications that I'll turn it over to Stephanie to talk a little bit about why it's how it's gonna bounce around for the remainder of the year, perhaps yep and you know <unk>.
Mentioned in my prepared remarks, you know currently the vast majority of the P. O J sales is really the hardware portion and we expect the second half will really be more of the construction part of the P O J call.
Contract and so you know overall you know in terms of our extend contract it's going to be profitable and you know, it's it's really just timing basin and it's really dependent on when the Barber charters are gonna be available.
You're out of safeguards put like a real software.
Thanks.
Our next question comes from a line of Bill Peterson from J P. Morgan Chase. Please go ahead.
Yeah, I'm, just taking the questions congrats to.
Kathy and Olga.
Sure if you're milestones so good good luck with the next endeavors Uhm. My first question is on the four year of you. So.
A big chocolate extend and you're trying to give some guidance on on what's gonna happen with extend more construction related but I guess, George obviously would appear to have come down, but how should we think about the.
The mix between the third and fourth quarter.
<unk> in fact on margins as well, but then if you think about the charge you started a business you know we're seeing some indications that there's inventory broken up on <unk>, it's hard to predict what kind of growth, we should seize really easy grove, but obviously, you've been driving better utilization in certain networks report. So I'm trying to get a feel for hours just we should think about seasonality in a business.
Big step up with three two followed by somewhat frightening report here is that the right way to think about it if you could just contact for your that'd be helpful.
Sure in terms of the core charging revenue as I mentioned, you know, we're expecting sequential growth, even though you know I think we've got some questions previously about seasonality and the business because we are such gross business, we haven't seen the impact of seasonality because of the quarter over quarter growth in our throughput <unk> hit the road and for all of the various.
Reasons, we just talked about so the core charging businesses should sequentially grow that's how I'd model that and then as it relates to the extent you know part of the business as I mentioned you know, we we will see a step down in that revenue in the second half I'm really going to be informed by you know how much of the the charges are gonna be available in how much hardware sales we're gonna see.
Okay, great. Thanks for that for a second question <unk> a good last four of the Chevron Texaco gas station, but we're gonna try to get a feel for the time, we ramp for this for these for these retailers and can I get for Ya.
Sort of related Chevron were aware of them actually look into that for my battery buffer charges from a company called freeware. So I'm assuming that if he goes redoing suffered from the range with a short run but could I <unk> I guess, how does <unk> view battery buffered as a potential option for service stations or maybe just rural sites in general we're at the power.
May be harder to come by especially take into account your temperature around transformers.
And make ready in the past.
Yeah <unk> <unk>.
I think we've said this before we're quite open to putting batteries on site.
Done at 14 at 14 different locations in California, actually at Chevron stations and over history.
We did it in the past here because there was a California like funding program to experiment with it and be basically it was a it was a <unk>.
A pilot program.
<unk> extra funding it doesn't pencil yet so and there's no sort of there's no commercial imperative for us to do it but we remain excited about the possibility. If there becomes a financial reason to actually do put on site storage. So we're open to it but right now it actually doesn't seem to make financial sense in most places and and again we.
Haven't had chevron actively asking us to do that yet as we sort of figure out what are the contours of that agreement. So you know, but we're open to it you know we've got we've got teams of people that have experience with it here here on the team so.
Yeah, and then on the first part.
<unk> timing and rapid that those opportunities.
<unk> <unk>.
Chevron, we have a master's side agreement with Chevron and it's just fill in the very very early planning stages. So nothing nothing specific to report on that yet.
Okay, Thanks, and congrats again.
Thank you.
Our next question comes from a line of Craig Irwin.
From rock M. K M. Please go ahead.
Alright, good evening and thank thank you for taking my question.
For Cassie over the last few months, there's been some controversy out there in the market and you guys have had a direct response with a couple of your press releases <unk>. There's some analysts out there, saying that that one company one certain company Uhm is gonna take the lion's share of the available subsidies and that you'd be charging market.
It doesn't strike me that that's the way it's been working you know can you can you may be talked about your ability to procure subsidies in the markets that you're serving to work with your partners like pilots flying J to make sure that they have access to.
All the all the funding that's available.
Craig I'm I'm Ah maybe.
Maybe you restate the question I'm, a little confused about the.
Uhm Oh.
<unk> nature of the question.
Spell out cause I I'm <unk> I'm happy to answer whenever it is if I understand with a question is.
So there was an assertion made the tests will we get the lion's share of the available even subsidies are supposed to be charging infrastructure subsidies uhm.
Uhm.
By a couple of different analysts and you know.
And press releases where to start.
75 per cent share in different markets.
Can you can you please respond directly to <unk>.
Competitive procurement of subsidies and how how easy though was tracking across the country.
Oh, Yeah, Yeah, I got it thank you so <unk>.
As you know fit their fifties and different state programs for <unk> and each one has its own application process. So we were we happened to be delight and we're delighted we were very very successful in Ohio, I think we know what we're doing a rewrite good grant applications, because we got a lot of experience with that we've been doing grant applications and successfully procuring all kinds of state and local.
Funding supports to help offset capex for 10 years, so that but again, Ohio is the first big announcement on Nervy, We've got we're waiting to hear from Pennsylvania in Colorado and then we're in the process of applying for a bunch of other states and you know every week view every single application.
Right because the program designs are quite different so there there is not as it's not like the common App for college [laughter]. I mean, you know every single application has to be done with great sort of Karen scrutiny.
And they have different different criteria for selection. So obviously, Ohio liked what they saw with easy go and look for hope we're hoping his work carefully selecting where we want to apply with a pen where the where the project will pencil well for our shareholders that we're hoping that we can make that same case and other places.
Okay excellent well, thank you for that update I appreciate it.
Thank you.
Our next question comes from the line of Andres Shepherd.
Centre. Please go ahead.
Hey, good afternoon, everyone. Congrats on the quarter. Thanks for taking our question and Cathy area code everyone's thoughts you know congrats on.
Run and you you will shortly be missed some big shoot <unk> [laughter]. Thank god.
You know a little more questions have been addressed maybe just to piggyback off the last one you know.
There's been a lot of conversations lately about <unk> fortifying their own charging networks. You know we saw Tesla opening up their network, I think Rabin and Ford or a.
Amongst some of those as well.
I I realize you know your charges have always been compatible with all vehicles and had always been able to connect with with test those vehicles.
I'm just curious your what are your thoughts on this competition from from Oems <unk> is that something could be.
Be mindful of <unk> you know is this new Williams continue to introduce vehicles. So I'm just curious kind of your thoughts on on is that additional competition is something that we should be focusing on closely and maybe just to add to that is.
Maybe additional commentary on on the Navy Fundings you know we saw you got the Ohio branch, which is great. Just curious you know what are the potential next dates or states that that you think might makes sense in the short term. Thank you yeah, yeah. So I'm I'm a competition front looks at the at the end of the day the Oems core business.
Is selling cars, so they need to do what they need to do to sell cars, sometimes they need to open dealerships, sometimes they needed the superbowl ads and then sometimes they need to figure out that they need to make investments and charging so that they can sell those cars. This most recent announcement is that third category and we are really well positioned as as you know an operator that offers both of <unk>.
Operated services and operate for other services <unk> to help them do that it's a different business I mean, I think if you ask G. M about it our collaboration with G. M has been just that where they are where we are working really closely together, where they're making the cars and <unk> figure out how to do the charges that are gonna work with those cars. We work together in our lab to make sure that it's a seamless.
And we're gonna continue to do that we expect that our <unk>, our experience of being able to charge all levy's and to basically you know work on this one and done metric that you heard Dennis talk about and and the prepared remarks were gonna be continued to be at the cutting edge of creating that seamless charging experience for ease of all types and that will.
Help all the OEM so.
I'd say, we are excited about the opportunity for more folks getting excited about making investments and charging infrastructure and will be will be part of that equation for sure.
Got it and and so are you interested in the Navy funding.
Yeah, Yeah. So it looks like we've got we were waiting like we kind of expect Colorado in Pennsylvania announcements to happen sometime this summer roughly and then the other announcements might follow later in the year of the of the next sorta swath of applications and again remember what follows then at this contracting process that can take some months I mean people.
Just think Oh once the award is announced then people start digging. Unfortunately is not the case, we're really actually practically talking about nervy projects are gonna really get moving in problems. Some are gonna get moving maybe this year, but the bulk of them are gonna get moving in 2024 with some of them getting energized by the end of 2024, but some of them going into 2025, so well we are <unk>.
Applications were being you know, it's Craig asked about you know how you do it we do it with great care. So we're hopeful that we get we get our piece of the action because we're identifying locations, where we think we're gonna be able to achieve and realized great returns for our shareholders.
Got it that's wonderful it very very very thankful. Thank you so much I'll pass it on.
Thank you <unk>.
Our final question comes from Doug Becker from Reef capital. Please go ahead.
Thanks, just curious about the expected timing for the Bible of compliance Chargers. It looked like cigarette opened up its Plano, Texas plant back in June so it looks like a positive development.
Hi, Doug This is Dennis the the.
Production is is right on track, it's a big job to ramp up the supply chain and opened the facilities here in the U S. And we are we're looking to see our first production units start to 2323 or early Q4 after that they'll need to go through.
Certification cycle as well, but the relationships with the the charging vendors or are going very well and they are pushing on those days as hard as they can.
Yeah that sounds good and then <unk>.
Was raised EBITDA guns was lowered just a little bit and I know there was sounded like some increasing your best <unk>.
Be a little more reconciliation between the higher revenue guard. So <unk>, it's just a little bit lower.
Yes, Great question, you know and it's true Uhm. So we we pulled forward you know revenue as you saw on two two in terms of the 50 million that was generated in the quarter, we talked about the extent of revenue for the second half you know expect it to be down as a result of of more or less of the hardware sales kind of coming through.
And so our our revenue guidance for the year.
The higher end of the range, we we kept it the 150 million and you're right on the adjusted EBITDA, we adjusted it differently because of the the additional investments we are expecting to make in the second half you know as we've seen with the growth of our business and and.
Well you know all of us have been talking about.
We have determined that we do need to make some additional investments in areas like the renewed program. We talked about the next cable's right in the connection does that have to get swapped out so maintenance costs associated with that we're also gonna be making additional investments you know in in our puncture App, we've seen continue to bring value to our our our partner.
So in a number of areas just thinking about the growth trajectory of the business. We felt it was prudent to continue to make some additional investments and a lot of those areas in both of our networks as well as you know the people processes and tools that we have across the company.
Okay that makes sense Cathy congratulations.
Thank you.
And it appears we do have one more question from the line of Audrey Shepherd from Centre. Please go ahead.
Thanks for taking one more question just quick one with the the new gross proceeds of the roughly 130 million for the equity program and now 257 in total cash and liquidity.
Just remind me what is the run rate, but what does he expect it run rate with their liquidity the does that push it into 2025.
Trying to get my head around that thank you.
It is andreas Thank you for that question Uhm. So the additional equity that we raised prior to that we had indicated that we had run right through most of 2024. This additional capital Reyes is gonna take us well into 2025.
Kathy mentioned about all of the different financing opportunities that are out there that are ahead of US you know certainly our hope is that from a financing perspective, you'll have additional opportunities to monetize like some of these giant Grant awards that we just talked about and these other opportunities with you know multi millions you know ahead of us so.
The equity raise was gonna take us well into 2025.
Wonderful. Thank you so much and congrats again on the court.
Thanks.
I would now like to turn the call over to Cassie.
Closing remarks.
He did go had a phenomenal quarter with accelerated growth in all key areas as you've seen the engine. We've created a D V go and our first mover advantage is delivering substantial revenue with increasing easy adoption, our financial model is poised to generate excess returns for shareholders.
<unk> E D O team are key partners and our suppliers for their efforts and enabling fast charging across the U S.
Thank you to everyone for joining us and I look forward to speaking to you again during our queue three call.
Thank you ladies and gentlemen, this does conclude today's call. Thank you for your participation you may now disconnect.
[music].