Q1 2024 EVgo Inc Earnings Call

Unknown Executive: Thank you for standing by, and welcome to the Evgo first quarter 2024 earnings conference call. All lines have been put on mute to prevent any background noise.

Thank you for standing by and welcome to the E. V go first quarter 2024 earnings Conference call.

Unknown Executive: All lines have been on mute to prevent any background noise. After the speakers' remarks, there will be a question.

Unknown Executive: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star number one.

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Unknown Executive: You.

Unknown Executive: Thank you. I'd now like to call over to Heather Davis, Vice President of Veterans Affairs. You may begin.

Unknown Executive: I'd now turn the call over to Heather Davis Vice President.

Heather Davis: Our relations you may begin.

Heather Davis: Good morning, and welcome to Evgo's first quarter 2024 earnings call. My name is Heather Davis, and I'm the Vice President of Investor Relations at Evgo. Joining me on today's call are Badar Khan, Evgo's Chief Executive Officer, and Olga Shevorenkova, Evgo's Chief Financial Officer. Today, we will be discussing Evgo's first quarter financial results and our outlook for 2024, followed by a Q&A session. Today's call is being webcast and can be accessed in the investor section of our website at investors.evgo.com. The call will be archived and available there along with the company's earnings release and investor presentation after the conclusion of this call.

Heather Davis: Good morning, and welcome to E. D goes first quarter 2024 earnings call. My name is Heather Davis and I'm, The Vice President of Investor Relations at E V go Joe.

Speaker Change: Joining me on today's call are Badar Khan, <unk>, Chief Executive Officer, and Olga Sovereign Cola Ebitdas Chief Financial Officer.

Heather Davis: Today, we will be discussing <unk> first quarter financial results and our outlook for 2024, followed by a Q&A session.

Heather Davis: Today's call is being webcast and can be accessed on the investors section of our website at investors got E V go Dot com.

Heather Davis: The call will be archived and available there along with the Companys earnings release and Investor presentation. After the conclusion of this call.

Heather Davis: During the call, management will be making forward-looking statements that 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 in our SEC filings, including in the risk factor section of our most recent annual report on Form 10-K. The company's SEC filings are available on the investor section of our website.

Heather Davis: During the call management will be making forward looking statements that are subject to risks and uncertainties, including expectations about future performance.

Heather Davis: Factors that could cause actual results to differ materially from our expectations are detailed in our SEC filings, including in the risk factors section of our most recent annual report on Form 10-K.

Heather Davis: The company's SEC filings are available on the investors section of our website.

Heather Davis: These forward-looking statements apply as of 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 measures, can be found in the earnings materials available on the Investors section of our website. With that, I'll turn the call over to Badar Khan, Evgo's CEO. Good morning, everyone, and thank you for joining us today.

Heather Davis: These forward looking statements apply as of today and we undertake no obligation to update these statements after the call.

Badar Khan: Also please note that we will be referring to certain non-GAAP financial measures on this call.

Badar Khan: Information about these non-GAAP measures, including a reconciliation to the corresponding GAAP measure can be found in the earnings materials available on the investors section of our website.

Heather Davis: With that I'll turn the call over to Badar Khan E V go C E O.

Badar Khan: Good morning, everyone and thank you for joining us today.

Badar Khan: Before I begin the call, I'd like to take a moment to congratulate and thank you all. In addition to our first quarter financial results today, we also announced that Olga will be departing the company at the end of the month to pursue a different opportunity with a private company. Olga has been a trusted and valued partner to me since I joined Evgo and has been critical in driving the success of the company since she joined Evgo as a private company six years ago.

Badar Khan: Before I begin the call I'd like to take a moment to congratulate and thank all the guys. In addition to our first quarter financial results. Today, We also announced that all go will be departing the company at the end of the month to pursue a different opportunity with a private company.

Badar Khan: On behalf of the entire Evgo family, we wish her well in her future endeavors. Many of you know Stephanie Lee, our EVP of Accounting and Finance, who will serve as interim CFO from the time of Olga's departure until a permanent successor is on board.

Badar Khan: I'll go has been a trusted and valued partner to me since I joined <unk> and has been critical.

Badar Khan: Driving the success of the company since you joined D to go as a private company six years ago.

Badar Khan: On behalf of the entire <unk> family, we wish her well in her future endeavors.

Badar Khan: Many of you know Stephanie Lee, our EVP of accounting and finance, who will serve as interim CFO from the time of August departure until a permanent successor is on board, we are well underway with the search process I look forward to updating you when we have news to share.

Badar Khan: We are well underway with the search process and look forward to updating you when we have news. I will now turn to our results for the quarter. Evgo posted yet another excellent quarter, more than doubling revenue and nearly tripling throughput year on. Non-Tesla electric vehicle sales grew 29% year over year, demonstrating continued demand for EVs. With the level of utilization we continue to see in our network, we not only have a clear path to EBITDA breakeven in 2025, but with the operating leverage in the business, we expect we could have annual adjusted EBITDA of $200 million in three to five years' time, representing a very compelling. I'm excited to share our results from Q1 with you today, as well as talk about our key priorities over the next year.

Badar Khan: I will now turn to our results for the quarter.

Badar Khan: <unk> posted yet another excellent quarter more than doubling revenue.

Badar Khan: Tripling throughput year on year.

Badar Khan: Non Tesla electric vehicles sales grew 29% year over year, demonstrating continued demand for evs with the level of utilization we continue to see in our network. We not only have a clear path to EBITDA breakeven in 2025, but with the operating leverage in the business. We expect we could have annual adjusted EBITDA.

Badar Khan: $200 million in three to five years' time, representing a very compelling investment.

Badar Khan: Let me also take a moment to address the change in our competitive landscape. If Tesla's decision to halt further growth of charging stations was designed to allow them to focus on their automotive business and particularly more affordable vehicles, then this will be a positive for EV adoption. We know from experience both here in the U.S. as well as in other countries that affordability is a key driver of mass adoption.

Badar Khan: I am excited to share our results from Q1 with you today as well as talk about our key priorities over the next year or so.

Badar Khan: Let me also take a moment to address the change in our competitive landscape.

Badar Khan: If test this decision to halt further growth of charging stations was designed to allow them to focus on their automotive business and particularly more affordable vehicles. Then this will be a positive for EV adoption.

Badar Khan: No from experience both here in the U S as well as in other countries that affordability is a key driver of mass adoption.

Badar Khan: Companies like Evgo are now adding public charging stations at a pace that didn't exist when Tesla began its supercharger business. In fact, I expect Capital will be more interested in participating in this space in this new competitive context, allowing companies like Evgo to plug the gap left behind and accelerate their charging station growth. We added over 900 stalls last year, most of which were state-of-the-art, ultra-fast, 350-kilowatt stations, faster than Tesla's 250-kilowatt supercharger.

Badar Khan: Companies like E. V. Go are now, adding public charging stations at a pace that didn't exist. When Tesla began their supercharger business in fact, I expect capital will be more interested in participating in this space in this new competitive context, allowing companies like igo to plug the gap left behind and accelerate their charging.

Badar Khan: <unk> growth.

Badar Khan: We added over 900 stores last year, most of which were state of the art Ultra fast $3 50 kilowatt stations faster than Tesla's $2 50 kilowatts supercharger network.

Badar Khan: We're excited to be able to add Max connectors to our chargers later this year and welcome more tested drivers to our network, as well as help sites that have been far along in the process of adding new DC fast charging stations and, of course, offer employment to as many talented employees as we can.

Badar Khan: We're excited to be able to add Max connectors to our charters later this year and we welcome more tests the drivers to our network as well as help site hosts have been far along in the process of adding new DC fast charging stations and of course offer employment to as many talented employees as we can.

Badar Khan: As we discussed in our last two calls, we see very strong unit economics in our business and expect to see that continue for the foreseeable future as EV demand exceeds supply of charging stations. Now, turning back to our earnings this past quarter. We had a great first quarter in 2024, with throughput nearly tripling year over year, and while revenues grew just over twofold, revenues from the old and operative charging network grew faster.

Badar Khan: As we've discussed in our last two calls we see very strong unit economics in our business and expect to see that continue for the foreseeable future as EV demand exceeds supply charging stations.

Badar Khan: Now turning back to our earnings this past quarter.

Badar Khan: We had a great first quarter in 2024 with throughput near tripling year over year, while revenues grew just over two fold revenues from the owned and operated charging network grew faster.

Badar Khan: We grew our operational stalls by 38% and are on track to add 800 to 900 new owned and operated stalls this year. Customer accounts continued to grow faster than VIO growth in the first quarter, and we were just under $1 million at the end of the quarter.

Badar Khan: Grew our operational stores by 38% and are on track to add 800 to 900, new owned and operated stores this year.

Badar Khan: Customer accounts continue to grow faster than <unk> growth in the first quarter and we were just under $1 million at the end of the quarter.

Badar Khan: We continue to see clear evidence of operating leverage that we've talked about in detail in our last two calls, with both expanding adjusted gross margins, especially in our owned and operated business, and an adjusted G&A, translating into strong bottom-line improvement year over year. Evgo's model is unique in that we own and operate DC fast charging stations where customers are going about their lives. Our growing network of over 1,000 locations is within a 10-mile drive for over 145 million Americans.

Badar Khan: We continue to see clear evidence of operating leverage that we've talked about in detail in our last two calls with both expanding adjusted gross margins, especially in our owned and operated business and an adjusted G&A translating into strong bottom line improvement year over year.

Badar Khan: If he goes model is unique in that we own and operate DC fast charging stations, where customers are going about their lives.

Badar Khan: Our growing network of over 1000 locations is within a 10 mile drive for over 145 million Americans and we have a network plan and strategic site hosts that allow <unk> to continue our rapid expansion serving more EV drivers.

Badar Khan: And we have a network plan and strategic site hosts that allow Evgo to continue our rapid expansion, serving more EV drivers. Demand for EVs, especially amongst non-tested brands, remained strong this quarter, with new BEV sales up almost 30% year over year.

Badar Khan: Demand for Evs, especially amongst noncash the brands remained strong this quarter with new EV sales up almost 30% year over year.

Badar Khan: This past quarter, we saw especially strong sales growth from Ford, Rivian, Hyundai, and Kia. More affordable EV models are coming, supporting the growth of DC fast charging as these models tend to attract a higher share of customers without access to home charging. It's also worth remembering that the number of BEVs sold this quarter is roughly equal to what was sold in all of 2020. Although non-Tesla vehicles account for the vast majority of our network throughput today, we expect to start adding NAX connectors to our chargers later this year.

Badar Khan: This past quarter, we saw especially strong sales growth from Ford revision, Hyundai and Kia more affordable EV models are coming supporting the growth of DC fast charging as these models tend to attract a higher share of customers without access to home charging.

Badar Khan: It's also worth remembering that the number of be Evs sold this quarter is roughly equal to what was sold in all of 2020.

Badar Khan: Although non Tesla vehicles accounted for the vast majority of our network throughput today, we expect to start adding next connectors to our Chargers later this year.

Badar Khan: And given our locations tend to be closer to where EV drivers live and go about their daily lives, and our network is increasingly equipped with ultra-fast 350 kilowatt chargers versus Tesla's 250 kilowatt superchargers, and we offer convenient customer features like AutoCharge+. We look forward to welcoming more Tesla vehicles onto our network. As we discussed in our financial webinar a few weeks ago, because of our proprietary network planning, resulting in carefully selected site locations and conservative underwriting process, we have very compelling unit economics.

Badar Khan: And given our locations tend to be closer to our easy Drivers' lives to go about their daily lives.

Badar Khan: And our network is increasingly ultra fast 350 kilowatt Chargers versus test this 250 kilowatts Super Chargers.

Badar Khan: And we offer convenient customer features like auto charge, plus we look forward to welcoming more tesla vehicles onto our network.

Badar Khan: As we discussed in our financial Webinar, a few weeks ago because of our proprietary network planning, resulting in carefully selected site locations and conservative underwriting process, we have very compelling unit economics.

Badar Khan: We reached a level of scale in kilowatt hours per stall that enabled us to generate positive annual cash flows on a per stall basis by the end of last year. And in Q4 2023, the top 15% of our stalls were generating over $30,000 per stall on an annual basis. As a reminder, throughput is the product of charge rate and utilization multiplied by 24 hours; charge rate is the speed with which EVs take energy into the car, and utilization is the percentage of time an individual stall is being utilized.

Badar Khan: We reached a level of scale in kilowatt hours per store that enabled us to generate positive annual cash flows on a per store basis by the end of last year.

Badar Khan: And in Q4 2023, the top 15% of our stores were generating over $30000 personal on an annual basis.

Badar Khan: As a reminder, throughput is the product of charge rate and utilization multiplied by 24 hours charge rate is the speed with which evs take energy into the car and utilization is the percentage of time and individuals stall is being utilized over.

Badar Khan: Over the past two years, we have seen very strong increases in both utilization and charge rates, resulting in a near quadrupling of daily throughput per store. In 3-5 years' time, we expect to have around 7,000 stalls, and at that point, we would expect cash flow per stall across the whole network to be around $37,500 per stall annually, driven mostly by increased charge rates and a conservative utilization assumption and a level of throughput per stall already achieved by the leading edge of our network. The next level of annual cash flow provides a very strong return when considering we're expecting around $96,000 net capex per stall for 2024 vintage stalls.

Badar Khan: Over the past two years, we have seen very strong increases in both utilization and charge rate, resulting in near quadrupling in daily throughput per store.

Badar Khan: And three to five Years' time, we expect to have around 7000 stores and at that point, we would expect cash flow per store across the whole network to be around $37500 per store annually, driven mostly by increased charge rates and a conservative utilization assumption.

Badar Khan: The level of throughput per store already achieved by the leading edge of our network today.

Badar Khan: This level of annual cash flow provides a very strong return when considering we're expecting around $96000 net capex per store for 2024 vintage stores and that's before any capex reductions, we would expect to see over time, some of which I will talk about later on this call.

Badar Khan: And that's before any capex reductions we would expect to see over time, some of which I will talk about later on this call. As we've described in our prior two calls, Evgo has significant operating leverage, where around 40% of our cost of sales in charging network gross margin is fixed per stall, and around 70% of adjusted G&A is fixed across our existing site host partners. We've identified approximately 10,000 stalls that currently pencil to our double-digit return expectation.

Badar Khan: As we've described in our prior two calls igo has significant operating leverage were around 40% of our cost of sales and charging network gross margin is fixed per store and around 70% of adjusted G&A is fixed.

Badar Khan: Across our existing site host partners. We've identified approximately 10000 stores that currently pencil to our double digit return on expectations, but we've assumed here that we will continue store growth at the 800 to 900, new stores per year that we're currently growing at.

Badar Khan: But we've assumed here that we will continue stall growth at the 800 to 900 new stalls per year that we're currently growing. We're making good progress in securing financing that allows us to grow at least at that rate, which I'll cover later. Taking the estimates from the prior slide and assuming 7,000 stalls, our owned and operated network would generate significant contribution dollars that fall straight to the bottom line once fixed G&A costs have been covered, and taking those same estimates, we expect the roughly $70 million of fixed costs to be covered by full year 2025, and therefore at a scale of 7,000 stalls in three to five years' time, the company will be generating around $200 million in adjusted EBITDA annually, with very significant continued growth beyond.

Badar Khan: We're making good progress in securing financing that allows us to grow at least at that rate, which I'll cover later.

Badar Khan: Taking the estimates from the prior slide and assuming 7000 stores are owned and operated network with generate significant contribution dollars that fall straight to the bottom line, what's fixed G&A costs have been covered and taking those same estimates we expect the roughly $70 million of fixed cost to be covered by full year 2020.

Badar Khan: And therefore, the scale of 7000 stores in three to five Years' time, the company will be generating around $200 million and adjusted EBITDA annually with very significant continued growth beyond that of course. This is prior to the contribution of any extend or ancillary and tech enabled services.

Badar Khan: Of course, this is prior to the contribution of any extended or ancillary and tech-enabled services. Not only does our business benefit from such strong operating leverage, but we also benefit from a significant tailwind in the form of rising demand. As we have said before, the charge rate on our network is a function of the speed that batteries can be charged and the average power rating of Evgo chargers on our network. Both are right.

Badar Khan: Not only does our business benefit from such strong operating leverage, but we also benefit from a significant tailwind in the form of rising charge rates.

Badar Khan: As we have said before the charge rate on our network is a function of the speed that batteries can be charged and the average power rating of <unk> charges on our network.

Badar Khan: Both are rising.

Badar Khan: Vehicles sold today have significantly higher charge rates than the average charge rates of all BEVs on the roads, which will include many older vehicles with lower charge rates. In fact, over 80% of all BEVs sold today have charge rates over 50 kilowatts, and over 50% are over 90. We conservatively assume battery electric vehicles are sold using the 2023 sales, and with no improvements to either vehicle mix or battery technology, and that represents roughly 70% of the assumed increase in charge rate from 43 to 80 kilowatts across our network in three to five years.

Badar Khan: Vehicles sold today has significantly higher charge rates than the average charge rates of all be evs on the roads, which will include many older vehicles with lower charge rates.

Badar Khan: In fact over 80% of all <unk> sold today, a charge rates over 50 kilowatts and over 50% or over 90 kilowatts.

Badar Khan: We conservatively assume battery electric vehicles are sold using the 2023 sales mix with no improvements to either vehicle mix or battery technology and that represents roughly 70% of the assumed increase in charge rate from 43% to 80 kilowatts across our network in three to five years' time.

Badar Khan: Evgo continues to add mostly 350 kilowatt chargers to our network, and today, nearly 40% of our network is 350 kilowatts versus 22% a year ago. Therefore, the average mix of our charger network also increases over time and contributes the other 30% of the assumed growth in network charging. The combination of the two means charge rates are expected to improve significantly, benefiting the High charge rates mean the same kilowatt hours can be dispensed over much less time, meaning we realize the same return with lower utilization.

Badar Khan: E V go continues to add mostly $3 50 kilowatt charters, who are network and today nearly 40% of our network is $3 50 kilowatts versus 22% a year ago. Therefore, the average mix of our Charger network also increases over time and contributes to the other 30% of the assumed growth.

Badar Khan: In network charge rate.

Badar Khan: The combination of the two means charge rates are expected to improve significantly benefiting the company.

Badar Khan: Hi charge rates means the same kilowatt hours can be dispensed over much less time, meaning we realize the same return with lower utilization.

Badar Khan: Our charge rates drive three sources of upside that we are not assuming. First, higher charge rates could drive up EV adoption because customers favor faster charging times. Higher EV adoption drives up utilization. Second, higher charge rates could actually drive up the share of DC fast charging because customers are able to charge their cars for the same number of miles much faster, leading customers to become more confident in on-the-go public charging and less concerned with charging at home.

Badar Khan: Our charge rates drive three sources of upside that we are not assuming first higher charge weights could drive up EV adoption, because customers favor faster charging times higher EV adoption drives up utilization.

Badar Khan: Higher charge weights could actually drive up the share of DC fast charging because customers are able to charge their cars with the same number of miles much faster.

Badar Khan: Leading customers to become more confident in on the go public charging and less concerned with charging at home, therefore higher charge rates could lead to higher utilization and thus even higher returns per store if we <unk>.

Badar Khan: Therefore, higher charge rates could lead to higher utilization and thus even higher returns per store. If we had the same utilization in three to five years as the top 15% of our stores today with 80 kilowatt charge rates, we would double the cashflow per store to over $75,000. And third, higher charge rates translate into much improved capital efficiency because it allows a smaller number of chargers for the same kilowatt hours.

Badar Khan: The same utilization in three to five years' time, as the top 15% of our stores today with 80 kilowatt charge rates, we would double the cash flow per store to over $75000 annually.

Badar Khan: And third higher charge rates translate into much improved capex efficiency because it allows a smaller number of charges for the same kilowatt hours dispensed again, we have not assumed any of these upsides will any improvements in battery technology, nor improvements of the mix of new vehicle sales in our expected economics in three to five.

Badar Khan: Again, we have not assumed any of these upsides, nor any improvements in battery technology, nor improvements to the mix of new vehicle sales in our expected economics for three to five years. Let's now turn to our four key priorities over the next year. First, and as you've heard a lot on prior earnings calls, we remain focused on improving the customer experience. Second, an area we will discuss further in future calls are the steps we are taking to improve efficiency in the business above and beyond the operating leverage we've talked about in the past two.

Badar Khan: Years' time.

Badar Khan: Third, another area we will discuss more in future calls are the initiatives we are now putting in place to ensure we are attracting and retaining a greater number of higher-value customers. And finally, we will provide a little more detail on progress on securing financing to get to free cash flow breaking. On customer experience, we know that there are four things that customers value the most. First, having lots of stalls at a site so they never have to wait for a charge.

Badar Khan: Let's now turn to our four key priorities over the next year or so.

Badar Khan: First and as you've heard a lot on prior earnings calls, we remain focused on improving the customer experience.

Badar Khan: Second an area, we will discuss further in future calls are the steps we are taking to improve efficiency in the business.

Badar Khan: Beyond the operating leverage we've talked about on the past two calls.

Badar Khan: Third another area, we will discuss more in future calls are the initiatives. We are now putting in place to ensure we are attracting and retaining a greater number of higher value customers on our network.

Badar Khan: And finally, we will provide a little more detail on progress on securing financing to get to free cash flow breakeven.

Badar Khan: Second, having high-power chargers available so they can fuel up quickly. Third, having a reliable solution that works right on the first try, and fourth, a hassle-free payment process, where customers just plug the connector in, and the payment is processed.

Badar Khan: Our customer experience, we know that there are four things that customers value. The most first having lots of stores at a site. So they never have to wait for a charge.

Badar Khan: Second having high power Chargers available so they can fill up quickly.

Badar Khan: Third having a reliable solution that works right on the first try and fourth a hassle free payment process with customers just plug the connector in under payment is processed automatically over.

Badar Khan: Over the past quarter, we made progress on each of these key metrics. We continue to deploy mostly six stalls per site, and so the percentage of sites with six stalls or more continues to rise. And we're aiming for around 20 percent by the end of this year. We're also mostly only deploying 350 kilowatt chargers now.

Badar Khan: Over the past quarter, we made progress on each of these key metrics.

Badar Khan: We continue to deploy mostly six stores per site and so the percentage of sites with six stores or more continues to rise and we were aiming for around 20% by the end of this year.

Badar Khan: We're mostly also only deploying $3 50 kilowatt charges now and so the percentage of stores with $3 50 kilowatt Chargers have nearly doubled year over year, and we expect that to be close to 50% by the end of this year.

Badar Khan: And so the percentage of stores with 350 kilowatt chargers has nearly doubled year over year, and we expect that to be close to 50% by the end of this year. One and done also continues to rise, and we expect another step-up in performance in Q4 when we release the key software updates. And finally, the percentage of sessions initiated with AutoCharge Plus has also increased significantly. And now that more than 50 models are part of this program, we expect to see continued growth in this metric during 2024.

Badar Khan: One on gun also continues to rise and we expect another step up in performance in Q4, when we released a key software update.

Badar Khan: And finally, the percentage of sessions initiated with auto charge plus has also increased significantly and now more than 50 models are part of this program. We expect to see continued growth in this metric during 2024.

Badar Khan: We believe the benefit of these improvements will ultimately result in customers gaining further confidence in public charging, driving up utilization and throughput on our network. As Evgo continues to scale rapidly, we've begun to turn our attention to identifying and delivering efficiency, not just in operating costs but also in capital costs. In November last year, we began prefabrication of stations, which is expected to result in an average of 15% of the construction costs of a station at eligible sites and also to reduce station installation timelines by as much as 50 percent.

Badar Khan: We believe the benefit of these improvements will ultimately result in customers, gaining further confidence and public charging driving up utilization and throughput on our network.

Badar Khan: As you can go continues to scale rapidly we've begun to turn our attention to identifying and delivering efficiencies.

Badar Khan: Just on operating costs, but also in the capital costs of the Chargers in.

Badar Khan: In November last year, we began pre fabrication of stations, which is expected to result in an average of 15% of the construction costs of a station at eligible sites and also to reduce station installation timelines by as much as 50%.

Badar Khan: We expect over a third of stalls operationalized in 2025 to benefit from this approach, and we continue to grow this. Our core owned and operated business has very compelling unit economics and enormous growth potential. In January of this year, we streamlined and refocused certain teams to support near-term growth efforts in this core area.

Badar Khan: We expect over a third of stores operationalized in 2025 to benefit from this approach and we continue to grow this over time.

Badar Khan: Our core owned and operated business has very compelling unit economics and enormous growth potential and.

Badar Khan: In January of this year, we streamlined and refocused certain teams to support near term growth efforts in this core area. This strategy is already beginning to show in our financial results.

Badar Khan: This strategy is already beginning to show in our financial results. In addition, over the course of this year, we've been implementing multiple upgrades to our charge point management, including releases that allow for predictive maintenance and automated diagnostics capabilities that will directly lead to fewer truck rolls, fewer customer calls, and faster customer issue resolution. Core-centric costs are a sizable portion of our sustaining DNA and are expected to decline this year as we complete the offshoring of around 90% of our core volume, which is anticipated in Q3 this year. The combination of all these efforts is expected to lower our sustaining GNA per store run rate by around 15% by the end of this.

Badar Khan: In addition over the course of this year would be on implementing multiple upgrades to our charge point management system, including releases that allow for predictive maintenance and automated diagnostics capabilities that will directly lead to fewer truck rolls fewer customer calls and faster customer issue resolution.

Badar Khan: Call Center costs are a sizable portion of our sustaining G&A and are expected to decline. This year as we complete the offshoring of around 90% of our core volume, which is anticipated in Q3 this year.

Badar Khan: The combination of all these efforts is expected to lower our sustaining G&A per store run rate by around 15% by the end of this year.

Badar Khan: On the CapEx side, in addition to the prefab aluminum skids for station construction we began last year, we're implementing a series of incremental improvements, including a transition from copper to aluminum conductors, multi-sourcing switchgear, and various other EPC improvements that collectively aim to deliver around a 10% reduction in operationalized charger cost per stall for 2025 vintage stalls. We're also engaged in exploring joint development of next-generation charging architecture with an industry leading partner that aims to lower capex per stall by as much as 30% and bring a step change in customer experience due to a customer-focused design and improved firmware, with first deployments expected in the second half of 2020.

Badar Khan: On the Capex side. In addition to the prefab aluminum skids for station construction, we began last year, we're implementing a series of incremental improvements, including a transition from copper to aluminum conductors multi sourcing switch gear and various other EPC improvements that collectively aim to deliver around 10.

Badar Khan: Percent reduction and operationalized charter cost per store for 2025 vintage stores.

Badar Khan: We're also engaged with exploring joint development of next generation charging architecture with an industry, leading partner that aims to lower capex per store by as much as 30% and step change in customer experienced due to a customer focus design and improve firmware with first deployments expected to the SEC.

Badar Khan: Half of 2026.

Badar Khan: This level of improvement in CapEx per stool could improve our IRR by at least 7 percentage points. Evgo has had success in growing our recurring customer base through B2B relationships, like our OEM charging credit programs, as well as our rideshare programs. And together with our subscription plans, these programs account for over half of our throughput today.

Badar Khan: This level of improvement in Capex per store could improve our irr's by at least seven percentage points.

Badar Khan: <unk> has had success in growing our recurring customer base through BW relationships like our OEM charging credit programs as well as our rideshare programs and together with our subscription plans. These programs account for over half of our throughput today in other words over half of our throughput comes from higher <unk>.

Badar Khan: In other words, over half of our throughput comes from higher usage, relatively predictable customer segments that represent stickier kilowatt hours. We reached almost a million customer counts at the end of the quarter, a significant milestone for Evgo, underscoring the quality of the Evgo network. We believe our scale and position among customers is a competitive advantage that allows us to target and attract more high-value retail customers, as well as increase the value of existing customer relationships.

Badar Khan: <unk> relatively predictable customer segments that represent stickier kilowatt hours.

Badar Khan: We reached almost a million customer accounts at the end of the quarter a significant milestone with the Vigo underscoring the quality of the <unk> network, we believe our scale and position among customers is a competitive advantage that allows us to target and attract more higher value retail customers as well as increase the value of <unk>.

Badar Khan: Listing customer relationships.

Badar Khan: To that end, we hired a new EVP of growth, Scott Levitan, earlier this year, who brings a wealth of experience and track record in exactly these activities from companies like Google, Mercari, and Philips Electronics. We've started executing segment-specific marketing campaigns using low-cost methods to identify, attract, and retain customers who are most likely to be attracted by our convenient charging network close to where they live, work, and go about their lives.

Badar Khan: To that end, we hired a new EVP of growth Scott Lebanon earlier, this year, who brings a wealth of experience and track record in exactly these activities from companies like Google recovery and Philips electronics.

Badar Khan: We started executing segment specific marketing campaigns using low cost methods to identify attract and retain customers who are most likely to be attracted by a convenient charging network close to where they live work and go about their lives.

Badar Khan: We've also begun piloting new automated demand-based dynamic pricing that is now live across a portion of the network, with a phased expansion planned during the course of this year. And in Q2 this year, these efforts will be significantly enhanced when we expect to go live with a modernized customer data plan. All of these efforts are expected to not just ensure that we continue to grow our customer base at a faster pace than VIO growth but also increase throughput and average unit margins per customer.

Badar Khan: We've also begun piloting new automated demand based dynamic pricing that it's now live across a portion of the network with a phased expansion plan. During the course of this year and in Q2. This year. These efforts will be significantly enhanced when we expect to go live with a modernized customer data platform.

Badar Khan: All of these efforts are expected to not just ensure we continue to grow our customer base at a faster pace than vio growth, but also increase the throughput and average unit margins per customer.

Badar Khan: Our remaining key priority in the near term is to secure additional funding that allows us to reach a level of scale where we are self-financing but also accelerates the rate of new stores operationalized per year from the 800 to 900 we are expecting to add. We plan to build on the track record already established with successful grant collections in prior years and a successful partnership with GM. And the follow-on offering was completed in May last. We continue to have substantial additional capacity under the ATM program we launched in November 2022. And we believe we're also making progress in pursuing non-diluted financing options.

Badar Khan: Our remaining key priority in the near term is to secure additional funding that allows us to reach a level of scale, where we are self financing, but also accelerates the rate of new stores operationalized per year from the 800 to 900, we are expecting to add this year.

Badar Khan: We plan to build on the track record already established with successful Grand collections in prior years, our successful partnership with GM and the follow on offering we completed in May last year.

Badar Khan: We continue to have substantial additional capacity under the ATM program. We launched in November 2022, and we believe we're also making progress in pursuing non dilutive financing options.

Badar Khan: As we've discussed, we expect around 40% of 2024 Vintage CapEx to be offset from grants, OEM payments, and incentives, including executing on our first 30C transaction over the next few months. That provides us with sufficient capital to continue our CapEx plans well into 2020. We continue to be pleased with the dialogue. We're engaged with the DOE Loan Program Office for a loan under Title 17 Clean Energy Finance.

Badar Khan: As we've discussed we expect around 40% of 2024 vintage capex to be offset from grants OEM payments and incentives, including executing on our first 30 C transaction over the next few months that.

Badar Khan: That provides us with sufficient capital to continue our capex plans well into 2025.

Badar Khan: We continue to be pleased with the dialogue we're engaged in with the Doe loan program office for a loan under the title 17 clean energy financing program. We believe we have a high quality loan application that addresses the need for more public charging infrastructure built out at scale across the U S.

Olga Shevorenkova: We believe we have a high-quality loan application that addresses the need for more public charging infrastructure built out at scale across the U.S. While we have not disclosed the quantum of the loan we are seeking, I can advise that if we are successful, we believe it will be sufficient to not only expedite our journey to self-financing but also meaningfully accelerate the annual rate of store growth. Given the year in economics we've disclosed, we are now also concurrently engaged in multiple potential options for further commercial non-dilutive financing that could be contemplated alongside the DOE loan.

Olga Shevorenkova: While we have not disclosed the quantum of loan we are seeking I can advise that if we are successful we believe it will be sufficient to not only expedite our jewelry to self financing, but also meaningfully accelerate the annual rate of store growth.

Olga Shevorenkova: Given the unit economics, we have disclosed we are now also concurrently engaged in multiple potential options for further commercial non dilutive financing that could be contemplated alongside the Doe loan Indeed spring commercial bank financing for new asset classes is an intended goal of the <unk> loan program office.

Olga Shevorenkova: Indeed, spurring commercial bank financing for new asset classes is an intended goal of the DOE loan program offering. I'll now hand over the call to Olga, who will run through our strong financial performance for the first quarter of this year. Thank you, Badar.

Olga Shevorenkova: Yeah.

Olga Shevorenkova: I'll now hand over the call to Olga Who'll run through our strong financial performance for the first quarter of this year.

Olga Shevorenkova: Thank you <unk>.

Olga Shevorenkova: Before I dive into Evgo's first quarter 2024 financial results, I wanted to express gratitude for having had an opportunity to serve as Evgo's chief financial officer. Being part of the team focused on growing Evgo over the past six years and working closely with our investors and analysts has been a pleasure and a remarkable journey. I am proud of all we have accomplished and excited about the path forward. We have a well-planned transition in place, as Badar mentioned, and a deep bench of talent in the finance organization that will ensure a smooth handoff.

Olga Shevorenkova: Before I dive into <unk> first quarter, two and Atlanta as well financial results I wanted to to expand got it it hasn't had an opportunity to serve as.

Olga Shevorenkova: Chief Financial Officer.

Olga Shevorenkova: Linda part of the team focused on growing it and go over the past six years and working closely with our investors and analysts has been Atlanta and there are a lot of Cologne, Germany.

Olga Shevorenkova: I am proud of all we have accomplished and excited about the path forward.

Olga Shevorenkova: We have a well planned transition in place and by the mansion and the named bench of talent and the finance organization that will ensure smooth handoff.

Olga Shevorenkova: With that said, I will now discuss our first quarter results. Evgo started 2024 delivering another strong quarter of growth and execution. Revenue in the first quarter was $55.2 million, which represents an 118% year over year increase. This growth was primarily driven by increased charge and gravity.

Speaker Change: Or is that said I will now discuss our first quarter results.

Olga Shevorenkova: If it goes well it depends it for delivering another strong quarter of growth and execution.

Olga Shevorenkova: Revenue in the first quarter was $55 2 million, which represent.

Olga Shevorenkova: 118% year over year increase there.

Olga Shevorenkova: This growth was primarily driven by increased charge I'm grabbing it.

Olga Shevorenkova: Retail charging revenues of $18.3 million grew from $6.6 million in the first quarter of 2023, exhibiting a 177% year-over-year increase. Commercial Charging Revenues, which primarily include revenue from our ride-share partnerships, of $5.8 million increased from $1.7 million in the first quarter of 2023, exhibiting a 240% year-over-year increase. And extend revenue of $19.2 million grew from $10.3 million in the first quarter of 2023, increasing 86% year over year. We added 250 new operational stores in Q1, including Xtent.

Olga Shevorenkova: Retail charging revenues of $18 3 million from 6.6 million in the first quarter of 'twenty, one to see exhibit in our 176, 7%.

Olga Shevorenkova: Year over year and Chris.

Olga Shevorenkova: Commercial charge an elegant.

Olga Shevorenkova: Primarily includes revenue from all Rideshare partnership.

Olga Shevorenkova: 058 million increased from 117 11 in the first quarter 'twenty one to see.

Olga Shevorenkova: Exhibiting at 240% year over year and grit.

Olga Shevorenkova: And extend Avenue on the Nile in Guam to Milan go from 10 points in email and in the first quarter of two ends of fantasy increasing 86% year over year.

Olga Shevorenkova: We added 250, new operational installed in Q1, including the extent.

Olga Shevorenkova: Total stalls in operation were approximately 3,240 at the end of March 2024, including 130 Evgo Extend stalls, increasing 38% from the end of March 2024. During the first quarter of 2024, Evgo added 109,000 new customer accounts, which shows a 63% increase versus 67,000 customer accounts added in Q1 2023. Evgo ended the quarter with more than 981,000 customer accounts, a 60% increase over the end of Q1 2023.

Olga Shevorenkova: Total stores in operation were approximately 3240 at the end of March two 1% before including 130, even though they're all increasing.

Olga Shevorenkova: 8% from the end of March two and the fantasy.

Olga Shevorenkova: During the third quarter of 201, or even though added 9000, new customer accounts, which shows.

Olga Shevorenkova: Ascending played versus six to 7000 customer accounts.

Ed: Ed It in Q1 to answer that this way.

Olga Shevorenkova: Even though ended the quarter with more than 981000 customer accounts.

Olga Shevorenkova: 60% increase over the end of Q1.

Olga Shevorenkova: Hey.

Olga Shevorenkova: Evgo's network throughput continues to grow, reaching over 53 GWh and nearly tripled year-over-year, and again grew over four times faster than the growth in VIR. I would like to reiterate what drives this growth. First and foremost, EV adoption continues. And as Badar has just mentioned, non-Tesla EV sales, which is the market Evgo primarily addresses today, increased 29% year over year in the first quarter. Second, EV buyers are shifting from early to mass adopters with a higher portion of multi-unit developers. Third, EV vehicle miles traveled are increasing, nearing parity with internal combustion engine vehicles. Fourth, the rapid growth in rideshare. And finally, heavier, less efficient EV models.

Olga Shevorenkova: Even those networks continues to grow reaching over 53 gigawatt hours and nearly tripled year over year.

Olga Shevorenkova: And again the old.

Olga Shevorenkova: Over four times faster than the growth in the IL.

Olga Shevorenkova: I would like to reiterate what drive this growth.

Olga Shevorenkova: First and foremost.

Olga Shevorenkova: Adoption and tears and then Bartow has just mentioned non Tesla EV sales, which is the market illegal Brian and then I'll address today.

Olga Shevorenkova: Please go ahead.

Olga Shevorenkova: 1% year over year in the first quarter.

Olga Shevorenkova: Second he buyers assistant from early two months adopted with a higher portion of multi unions dwellers.

Olga Shevorenkova: The vehicle mile channel isn't creating nearing parity with internal combustion engine vehicles.

Olga Shevorenkova: Or rather.

Olga Shevorenkova: And growth in the rideshare, and finally had a less efficient EV mild.

Olga Shevorenkova: As a result, utilization averaged approximately 19% across the network in the first quarter of 2024. Additionally, 53% of our stores had utilization greater than 15%. Over 40% of our stores have utilizations greater than 20%, and over 20% of our stores had utilizations greater than 30%. As I touched on earlier, revenue grew 118% in the first quarter of 2024 to $55.2 million. Adjusted gross profit was $17.3 million in the first quarter of 2024, up from $6.4 million in the first quarter of 2023. Adjusted growth margin was 31.3% in the first quarter of 2024. Q1 revenue usually includes breakage related to our Nissan contract. In Q1 2024, breakage revenue was roughly $2.5 million.

Olga Shevorenkova: And there is all utilization averaged approximately 9% occurs in that book in the first quarter transatlantic bought.

Olga Shevorenkova: This does surface and about <unk> <unk>.

Olga Shevorenkova: These elevations greater than 16% over 40% of all stores have utilization greater than 20%.

Olga Shevorenkova: But 20% of all of this though have utilization greater than 30%.

Olga Shevorenkova: And I touched on earlier revenue grew 118% in the first quarter of 224 to 50 512 million.

Olga Shevorenkova: Jonathan gross profit was $17 three.

Olga Shevorenkova: Train, Maryland in the first quarter Trans Atlantic or up from six 4 million in the first quarter Transit fantasy.

Speaker Change: And Jonathan gross margin was 30, 113% in the third quarter of two independent Corp.

Olga Shevorenkova: Q1 revenue usually caused the break or two related to our Nissan context in Q1, 2020 or breakage Avenue was rockwood.

Speaker Change: Nail it.

Olga Shevorenkova: When removing it, adjusted gross margin was 28% in Q1, which is more in line with our expectations of mid to high 20s for the rest of 2020. When you compare this adjusted number to a similarly adjusted number from Q1 2023, we still see an increase of 11 percentage points from 16.8% in the first quarter of 2023, demonstrating the leverage effects of throughput and corresponding revenue growth on the sole dependent components of cost of sales.

Olga Shevorenkova: When removing that and Jonathan gross margin was 28% in Q1, which is more in line with our expectations of mid to high <unk> for the rest of the plentiful.

Speaker Change: When you compare this adjusted number so similar adjusted number from Q1, two and three we still see an increase of 11 percentage points from 16, 8% in the first quarter. Thanks C J.

Olga Shevorenkova: I think the leverage effect of throughput and corresponding revenue growth on the stall dependent components of cost of sales.

Olga Shevorenkova: Adjusted G&A as a percentage of revenue improved significantly from 104, 6% in the first quarter Trans Atlantic City.

Olga Shevorenkova: 44% in Q1 of this year, demonstrating the leverage effect from a G&A adjusted G&A went from 12 to $6 5 million in Q1, two and three.

Olga Shevorenkova: Adjusted GNA as a percentage of revenue improved significantly from 104.6% in the first quarter of 2023 to 44.4% in Q1 of this year, demonstrating the leverage effect from our GNA. Adjusted GNA went from 26.5 million in Q1 2023 to 24.5 million in Q1 2024, clearly illustrating our focus on lean operations and path to profitability. Adjusted EBITDA was negative $7.2 million in the first quarter of 2024, a $12.9 million improvement versus negative $20.1 million in the first quarter of 2026.

Olga Shevorenkova: One of the $4 5 million in Q1, 201, before clearly illustrating our focus on lean the duration and path to profitability.

Olga Shevorenkova: Adjusted EBITDA was negative seven going to Maryland in the first quarter of 'twenty four.

Olga Shevorenkova: 12 9 million in Poland.

Olga Shevorenkova: Negative two and deploying one in Milan, and the third quarter of two and three.

Olga Shevorenkova: Cash, Cash Equivalents, and Restricted Cash was $175.5 million as of March 31, 2024. Cash used in operations was $14.1 million in the first quarter, a decrease from the first quarter of 2020. Capital expenditures were $21.1 million in the first quarter.

Olga Shevorenkova: Cash cash equivalents and restricted cash was 175 5 million as of March.

Olga Shevorenkova: Large soda third to understand default.

Olga Shevorenkova: Cash used in operations was $14 1 million in the first quarter from the first quarter of 'twenty fantasy.

Olga Shevorenkova: Capital expenditures were $21 1 million in the first quarter capital expenditures net of capital offset was $13 6 million in Q1 of two and defensive.

Olga Shevorenkova: Capital expenditures net of capital offsets were $13.6 million in Q1 of 2024. Now, turning to reconfirming our 2024 guide. Evgo continues to expect full-year 2024 revenue to be in the range of $220 million to $270 million and adjusted EBITDA to be in the range of negative $48 million to negative $30 million. We continue to expect capital expenditures net of capital offsets to be in the 95 to 110 million range, with the main use of CapEx to add 800 to 900 new Evgo-owned stalls this year. We're as confident as ever that Evgo is on a clear path to an important inflection point in our business. Hitting, Adjusted, Even, Down, Break, Even.

Olga Shevorenkova: Now turning to reconciling our trans Atlantic full guidance.

Olga Shevorenkova: Even though continues to expect full year 200000, Florida Avenue.

Olga Shevorenkova: The range of 220 million to 207 to Maryland, and adjusted EBITDA to be in the range of negative 48 million to negative $30 million.

Olga Shevorenkova: We continue to expect capital expenditures net of capital offset to be in the nine to 510 million range, whereas the main use of Scott pack.

Olga Shevorenkova: 800 to 900 and you even go all those this year.

Olga Shevorenkova: We're as confident as ever that even though is on a clear path to an important inflection point in our business hitting adjusted EBITDA breakeven.

Unknown Executive: Evgo expects to be adjusted if it does break even for the full year of 2025. This is based on the expectation that electric vehicle and operations will continue to grow and that Evgo will continue to expand its network and realize operational efficiency. We look forward to sharing our progress in 2024 with you throughout the year. Operator, we can turn the call over to questions. Thank you. We will now begin the question and answer session.

Olga Shevorenkova: Even though expect to be adjusted EBITDA breakeven for the full year of two other quantified this.

Speaker Change: This is based on the expectation that electric vehicles in operation. We will continue to grow and then even go we'll continue to expand its network and realize operational efficiencies.

Unknown Executive: Well look forward to sharing our progress in 2000, if always he used throughout the year.

Speaker Change: Operator, we can turn the call over to questions.

Speaker Change: Thank you we will now begin the question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad to raise your hand and joined the queue. If you would like to withdraw your question simply press Star one again.

Unknown Executive: If you would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.

Unknown Executive: You are called upon to ask your question and our listening via loud speaker on your device. Please pickup your handset and ensure that your phone is not on mute when asking your question.

Unknown Executive: Your first question comes from a line of Gabe Daoud from TD Cowan. Your line is open. Hi Gabe, on the piece of news that hit recently around Tesla and laying off the supercharger team, and that may be impacting the pace at which they grow the supercharger network. Can you maybe just give a little bit of context or thoughts around how this could impact Evgo in both the near and long term from a market share perspective? Yeah, thanks, Gabe.

Unknown Executive: Your first question comes from the line of Gabe Daoud from TD Cowen Your line is open.

Gabriel J. Daoud: Hey, Thanks, Good morning, Hey, Bob Good morning, everyone and congrats Olga.

Speaker Change: On the new opportunity.

Speaker Change: But I was hoping we could just maybe get some general thoughts.

Unknown Executive: On the AR.

Gabriel J. Daoud: Piece of news that hit recently or around Tesla and playing off the supercharger team and that may be impacting the pace at which they grow the supercharger network can you, maybe just give a little bit of context or thoughts around how this could impact D. V go and book, maybe the near and long term from a market share perspective.

Badar Khan: But this is a fairly significant change in the competitive dynamic in the charging space. I think it's positive for the sector and for Evgo, positive in my mind, because if it allows Tesla to focus on cars and more affordable cars, as they've been talking about recently with the Model Two, I think that's great for EV adoption. I think we all see that affordability is a key driver of shifting from early adopters to mass adoption. We see that from almost all the other OEMs on the earnings calls in terms of bringing out more affordable vehicles. So I think that's positive. I think it's very positive for Evgo.

Gabriel J. Daoud: Yes, Thanks Keith.

Speaker Change: Look this is a fairly significant change in the competitive dynamic in.

Badar Khan: In the charging space I think it's positive for the sector and for <unk> is positive in my mind because.

Badar Khan: How's Tesla to focus on cars and more affordable cars as they've been talking about recently.

Badar Khan: With the model to I think that's great for EV adoption I think we all see is that affordability.

Badar Khan: Is it is a key driver of shifting from early adopters to mass adoption, we see that from.

Badar Khan: Almost all the other Oems on their earnings calls in terms of brewing up more affordable vehicles. So I think that's a positive I think it's very positive for <unk> I think that.

Badar Khan: I think that, You know, we have talked about very strong economics on this call, and I expect that to continue for, frankly, or improve in the foreseeable future. I expect that demand will exceed supply of charging stations for some time. Companies like Evgo just really didn't exist 12 years ago when Tesla began its supercharger business, but they exist today.

Badar Khan: We have talked about very strong economics here on this call and I expect to see that continue for frankly, the or improve in the foreseeable future I expect to see that demand.

Badar Khan: Seed supply all of charging stations for some time.

Badar Khan: Companies like E Z go.

Badar Khan: Just really didn't exist 12 years ago, and when tested began up supercharger business, but they they exist today. We've added over 900 stores as we said last year, which was state of the art Ultrafast III 50 kilowatt Chargers.

Badar Khan: We added over 900 stores, as we said last year, which are state-of-the-art, ultra-fast 350-kilowatt chargers. I expect that Capital will be more interested in participating in this space, in this new competitive dynamic, allowing companies like ourselves and others to pick up some of the slack in terms of charging station growth that Tesla may be leaving behind. Perfect. That's helpful. That's a great color.

Badar Khan: The capital will be more interested in participating in this space in this new competitive dynamic, allowing companies like ourselves and others to to pick up some of the slack.

Badar Khan: In terms of charging station growth that test in the beauty behind.

Badar Khan: Yeah.

Badar Khan: And then, I guess, just as a follow-up, maybe switching gears to financing. As you noted, Badar, in your prepared remarks, 30C may be set to kick off over the next couple months. Is there any additional color you can provide on expectations or maybe remind us that the 8 to 900 new stalls this year fully qualify for that 30% reimbursement? And then the second part of that question is just the DOE loan process; if you can maybe just dial in a bit more detail around that and maybe specifically just timing around when you think we can get an answer. Thanks.

Badar Khan: Perfect.

Badar Khan: That's helpful. That's great color and then I guess, just as a follow up maybe switching gears to financing you noted about <unk> in.

Badar Khan: In your prepared remarks, 30 C. Maybe set to kick off over the next couple of months is there any additional color you can provide on just expectations and maybe remind us of the eight to 900 new stores. This year fully qualified for the 30% reimbursement and then the second part of that question is just the deal process.

Badar Khan: Yes.

Badar Khan: If you can maybe just dial in.

Badar Khan: More deep.

Badar Khan: A detailed around that and maybe specifically just timing around when do you think we can get an answer.

Badar Khan: Sure, sure. So, maybe I'll ask Olga just to comment on the 30C transaction over the course of this year. In fact, start with the DOE loan.

Speaker Change: Sure sure. So maybe I'll ask I'll get you to comment on the 30 <unk> transactions over the course of this year.

Olga Shevorenkova: Start with the Doe loan.

Badar Khan: Look, we think we have a very high-quality application in front of the DOE loan program office, and we've been in dialogue with them for quite some time at this point. We're pleased with our progress. We know it's a very important part of President Biden's agenda.

Olga Shevorenkova: Look we we think we have a very high quality application in front of the deal we loan program office, which and we've been in dialogue with them for quite some time at this point, we're pleased with our progress we know it's a very important part of present items agenda.

Badar Khan: And, you know, given the economics that we've shared with you on this call and previous calls, I think anyone would look at this and think this is a pretty good investment. In terms of timing, you know, this is not a 2025 thing. We're expecting this to be, if we're successful, over the course of this year. We have not shared a quantum, but what I can share with you is that we'd expect the quantum here to accelerate our rate of growth from the 8 to 900 stalls that we do this year to the 900 plus that we did last year. And at the same time, accelerate our journey to free cash flow breakeven at a higher rate of stall growth. That's what we're looking at for the DOE loan.

Badar Khan:

Badar Khan: And.

Badar Khan: Given again I think the unit economics that we've shared with you on this call and previous calls I think which would suggest that.

Badar Khan: I think anyone would look at this and think this is a pretty good a pretty good investment.

Badar Khan: In terms of timing.

Badar Khan: This is not a 2025 thing we're expecting us to be if we're successful to be to be over the course of this year.

Badar Khan: We have not shared a quantum but what I can share with you is that we would expect the quantum here to accelerate our rate of growth from the eight to 900 stores that we're doing this year the 900 plus than we did last year.

Badar Khan: And at the same time accelerate out point in our journey to free cash flow breakeven at a higher rate of store growth.

Badar Khan: Of course, it's not our only source of non-dilutive financing. Again, as I said before, I think that the economics here are very attractive and will attract capital to this business. And I think that will increase with this new landscape that we talked about last week. And we are engaged in a conversation with counterparties around similar sorts of financing, non-recourse project financing. So those are things that can be done in combination with the DOE loan program office loan. And then, Olga, do you want to just provide a little insight into the 30C? Yeah. And maybe we could add a little add-on about the DOE loan.

Badar Khan: That's what we're looking at for the daily loan of course, it's not our only source of non dilutive financing.

Olga Shevorenkova: Again, as I said before.

Olga Shevorenkova: I think that the economics here are very attractive and will attract.

Olga Shevorenkova: Capital to this business and I think that will increase with the <unk> landscape that we just talked about last week.

Badar Khan: And we are engaged in conversations with Counterparties.

Badar Khan: Around.

Olga Shevorenkova: Similar sorts of financing nonrecourse project financing and so those are things that can be done in combination with the <unk> program office loan.

Badar Khan: And then I'll go if you wanted to provide them with insights from authorities and maybe like a little add on about the daily alone to work line entitled 17 O L. P O program and Gabe, you'll see two dozen new desserts and see what kind of other companies did that and what quantum they obtained I think it will give you a good feel for what we're looking for.

Olga Shevorenkova: So we're applying under Title 17 of that LPO program and gave you free to just do research and see what kind of other companies did that and what quantum they obtained. I think it will give you a good feel for what we're looking for as well. And on 30C, roughly 35 to 40% of our portfolio last year and this year qualify. We're working on effectuating the first transaction and selling our 2023 portfolio.

Olga Shevorenkova: As well and on 30, roughly 35% to 40% of our portfolio last year and this year qualifies we're working on it fluctuate in the first transaction and sale of our Trans Atlantic City portfolio will be the first one of the first transactions done this math of this nature in the industry and suddenly a little bit.

Olga Shevorenkova: It will be one of the first transactions done of this nature in the industry and certainly will be the first one for Evgo. So it takes a little bit of time to put the transaction documents in place, but we see a very strong interest in these types of portfolios. And it is clear to us that a very robust market is emerging to be able to trade this credit in the future on a regular basis. Okay, okay, that's great. Very helpful, Badar and Olga. Thanks so much again.

Olga Shevorenkova: The first one is it goes so it takes a little bit of time to put the.

Olga Shevorenkova: To put them in the transaction documents in place, but we see a very strong interest for those types of portfolios and it is clear to us that Nevada robust market is emerging to be able to trade. This credits in the future on regular basis.

Speaker Change: Okay. Okay. That's great very helpful about are all good. Thanks. Thanks, so much again thanks, Dave.

Unknown Executive: Thanks, Gabe. Your next question comes from the line of Chris Dendrinos from RBC Capital Markets. Your line is open.

Olga Shevorenkova: Your next question comes from the line of Christian <unk> from RBC capital markets. Your line is open.

Unknown Executive: Good morning, thank you. I guess I wanted to kind of dial in a little bit on the operations side of things, and maybe to start here, on the throughput, it looked like, you know, maybe December, I want to say, was around 201. And so the implied throughput for the quarter was a bit lower on the kilowatt hours per day. Can you just kind of talk about the dynamics there?

Christopher J. Dendrinos: Hi, good morning, Thank you.

Unknown Executive: Okay.

Unknown Executive: I guess I wanted to kind of dial in a little bit into the operation side of things and maybe just start here.

Unknown Executive: On the throughput it looks like maybe December I want to say it was around 201 in so the implied on the quarter was a bit lower on the kilowatt hours per day can you just kind of talk about the dynamics there or is there any sort of seasonality going on or how should we kind of think about I.

Unknown Executive: Is there any sort of seasonality going on? Or how should we kind of think about, I guess, throughput growth going forward? Yeah, Chris. That's exactly it. It's seasonality where we've been growing so fast over the last couple of years that we haven't even seen it in our numbers, but we're finally seeing it. That's really it.

Unknown Executive: I guess throughput growth going forward, Yes, Christmas exactly and it's seasonality where.

Unknown Executive: April's throughput per stall per day is well over 210 kilowatt hours per stall per day, so that's in line with what we were expecting. Got it.

Unknown Executive: We've been growing so fast over the last couple of years, we havent even seen it in our numbers, but we're finally seeing it.

Unknown Executive: That's really it april's throughput per store per day is well over 210 kilowatt hours per store per day. So that's in line with what we were expecting.

Unknown Executive: Yeah.

Unknown Executive: And then, um, I guess I think you mentioned some, some software updates that might be going out later this year. Can you kind of just update us on sort of what's going on there and the expectations for that? Yeah, it looks like we, you know, as a company, Chris, have been so focused on building a growth engine that can add, you know, very carefully selected stalls that we expect to generate very strong returns. That's the proprietary network plan and site selection process. We've really refined that to a point where it's, I think it's just humming super nicely.

Speaker Change: Got it thank you and then.

Unknown Executive: I think you mentioned some software updates that might've been going out later this year can you kind of just update us on sort of what's going on there and the expectations for that thanks.

Unknown Executive: Yes, it's look we there was.

Unknown Executive: The company, Chris we have been so focused on building a growth engine.

Unknown Executive: That can add.

Unknown Executive: Uh huh.

Unknown Executive: Very carefully selected stores that generate that we expect to generate very strong returns. That's the proprietary network plan and site selection process, we've really refined that to the point where it's.

Unknown Executive: We shared, I think, on the Q4 call, that we're actually exceeding our throughput expectations versus the modeling that we've done. So we think that it's a great process, but it's also, you know, one that's, that's conservative. But really, we're really shifting our focus from not just building the growth engine but to making it more efficient. That is something that we can do today as a result of the scale of the business.

Unknown Executive: I think it's just humming super nicely, we shared I think on the Q4 call that we are actually exceeding our throughput expectations versus the modeling that we've done. So we think that where it's a great process, but it's also.

Unknown Executive: One that's that's conservative.

Unknown Executive: Really we're really shifting our focus from not just building the growth engine, but to making it more efficient.

Unknown Executive: That is something that we can do today as a result of the scale of the business and we see that showing up in multiple areas one of which is the inefficiencies in.

Unknown Executive: And we see that showing up in multiple areas, one of which is inefficiencies in the operating cost of the business. There are multiple software and process improvements, none of which are, frankly, you know, they're not, they're not things that aren't things that haven't been seen elsewhere in pretty much every other industry in the world.

Unknown Executive: In the in the operating cost of the business there are multiple software and process improvements none of which are frankly.

Unknown Executive: They're not they're not things that are things that haven't been seen elsewhere in pretty much every other industry in the world.

Unknown Executive: We're just deploying the technology today, and those are things that allow us to have a better sense of predictive maintenance, diagnostics around our equipment where they're not performing as we'd expect. It'll be software in terms of handling customer calls in a way that allows us to expedite resolution faster. Again, these are not game-changing technological improvements.

Unknown Executive: We're just deploying the technology today and those are <unk>.

Unknown Executive: Things that allow us to have a better sense of all the predictive maintenance diagnose.

Unknown Executive: Diagnostics around our equipment, where theyre not performing as we would expect it'll be software in terms of handling customer calls in a way that allows us to expedite resolution faster again. These are not these are not game changing technology improvements, we're just bringing what exists in other in other sectors to our own sector and in terms of expectations we share.

Unknown Executive: We're just bringing what exists in other sectors to our own sector. In terms of expectations, we shared with you our sustaining G&A costs per stall in our webinar. In fact, I showed that on one of the slides here, a fairly significant reduction in the next three to five years. We're expecting the software updates just for this year to lower sustaining G&A by around 20% run rate. So Q4 versus Q4. Got it. Okay. Thank you very much.

Unknown Executive: With you are sustaining G&A cost per store.

Unknown Executive: We are on the webinar in fact, I show that one of the slides here, we're fairly significant reductions in the next three to five years, we're expecting the software updates just for this year to lower sustaining G&A by a by around 20% run rate for Q4 versus Q4 last year.

Unknown Executive: Got it okay. Thank you very much.

Unknown Executive: Your next question comes from the line of Stephen Gengaro from Stiefel. Your line is open. Thanks. Good morning, everybody.

Unknown Executive: Your next question comes from the line of Stephen <unk> from Stifel. Your line is open.

Unknown Executive: Morning. I think, too, for me, the first... You know, you had a good, good first quarter, and you kind of reaffirmed your guidance for the year. When we think about your 2025, you talked about EBITDA break even, and it feels almost a little conservative versus kind of the path you're on right now.

Stephen David Gengaro: Thanks, Good morning, everybody good morning.

Unknown Executive: I think Q2 from me.

Unknown Executive: The first.

Unknown Executive: So I was just kind of curious if you could, if you could, comment on those expectations and what drives you there. So we're very pleased with our quarter this year. We have three more quarters to go. And so, you know, we just came out with our guidance for this year and also for EBITDA break even just sort of seven or eight weeks ago. So we thought it was too early to, you know, make any changes to that.

Unknown Executive: You had a.

Unknown Executive: Good a good first quarter and you kind of reaffirmed your guidance for the year. When we think about your 2025, you talked about EBITDA breakeven.

Unknown Executive: And it feels almost a little conservative versus kind of where the path you're on right now.

Unknown Executive: So I was just kind of curious if you could if you could if you could comment on those expectations and what drives you there.

Unknown Executive: I can tell you that with the change, the competitive dynamic that we've just been talking about, you know, we're in a, you know, as an example, we're in a conversation with many site hosts across the United States that were well along the path towards putting in DC fast charging stations in their locations for the first time but are stuck. And we're, of course, happy to be able to pick up potentially some of those locations if they meet our return expectations. That would allow us to accelerate our store growth, potentially faster and cheaper.

Unknown Executive: Okay.

Unknown Executive: We're very pleased with that quarter. This year, we have three more quarters to go.

Unknown Executive: And so we just came out with our guidance for this year and also for EBITDA breakeven just sort of seven or eight weeks ago. So we thought it was too early to.

Unknown Executive: Make any changes to that I can tell you that with the change the competitive dynamic that we've just been talking about.

Unknown Executive: No we're not as a for instance, we're in a conversation with many site hosts across the United States that were well along the path towards.

Unknown Executive: Putting in DC fast charging stations and their locations for the first time that our stock and we're of course.

Unknown Executive: Happy to be able to pick up potentially some of those locations. If they meet our return expectations that would allow us to accelerate our store growth potentially faster and cheaper.

Unknown Executive: As I've talked about before, we've got a significant set of tailwinds in terms of charge rates. Charge rates improving allows customers to be more confident in on the go DC fast charging. Charge rates actually improve EV adoption; we hear all the OEMs talking about more affordable vehicles later this year and into next year. So there's a set of factors here that actually would suggest we could be doing a lot better. It's too early for us to talk about, you know, 2025 on this call, but perhaps we'll talk about 2025 in Q2 and Q3 calls. Great. Thanks. Thanks. That's a good color.

Unknown Executive: As I've talked about before we've got a.

Unknown Executive: A significant set of tailwind in terms of charge rates.

Unknown Executive: Charge rates improving allows customers to be more confident in on the go DC fast charging.

Unknown Executive: Charter rates actually improve EV adoption, we hire will be Oems talking about more affordable vehicles. Later this year and into next year. So there's a set of factors here that that actually would suggest we could be doing a lot better. It's too early for us to talk about 2025 on this call, but perhaps we'll talk about 2010.

Unknown Executive: Five.

Unknown Executive: Q2, and Q3 calls.

Unknown Executive: And the other question I had, and you sort of just answered it, but when you were talking about the different financing options, and you mentioned the ability to potentially accelerate growth beyond the eight to 900 stalls per year, that suggests to me that if you could do that, there is plenty of room for, and sites that you've identified that would be profitable and meet your IR hurdles, even if you grew the stall count at a much higher Is that fair?

Speaker Change: Great. Thanks, Thanks, that's good color.

Unknown Executive: The other question I have and you you sort of just answered it but.

Unknown Executive: When you were talking about the different financing options.

Unknown Executive: You mentioned the ability to potentially accelerate growth beyond the eight to 900 stores per year.

Unknown Executive: That suggests to me that if you could do that.

Unknown Executive: There is plenty of room for us.

Unknown Executive: And sites that you've identified that would be profitable and meet your IRR hurdles. Even if you. Even if you grew the store count at a much.

Unknown Executive: At a higher rate is that is that fair. This exactly right, Steve and we find that Theres about well first of all we've got about 50.

Unknown Executive: That's exactly right, Stephen. We find that there are about, well, first of all, we've got about 50, or over 50 strategic relationships with site hosts across the country. And there are, well, there are over 100,000 sites we've actually identified that we could potentially get after, but in that, there's a subset of over 10,000 that actually meet our return expectations. And again, I think with the competitive dynamic shift from last week, those are likely to be very attractive locations for us to get after.

Unknown Executive: 50 over 50 strategic relationship with the site hosts across the country.

Unknown Executive: And.

Unknown Executive: There are there's over 100000 sites that we've identified that we could protect to get after it but in that there's a subset of over 10000 that actually meet our return expectations and again I think with the competitive dynamic shift from last week.

Unknown Executive: Those are likely to be very attractive locations for us to get after and so yes, we.

Unknown Executive: And so, yeah, we, you know, I think when it comes to capital allocation, once we cover our costs, and we're Janet, which will happen next year, and we're generating EBITDA, positive EBITDA. The question for us is, do we return capital to shareholders, or do we keep deploying capital to build out locations?

Unknown Executive: I think when we when it comes to capital allocation, we will once we cover our costs and where Janet which will be will do next year and we're generating EBITDA.

Unknown Executive: With positive EBITDA. The question process do we return capital to shareholders or do we keep deploying capital to build out locations. The unit economics would clearly suggest it's in everyone's interest to for the company to grow.

Unknown Executive: The UN economics would clearly suggest it's in everyone's interest for the company to grow our store base faster than the 8 to 900, just given the returns that we're expecting. And so that's what we'll be looking to do. Great. That's a great color.

Unknown Executive: Our store base faster than the eight to 900, just given the returns that we're expecting and so that's what we'll be looking to do.

Speaker Change: Great that's great color. Thank you.

Unknown Executive: Okay.

Unknown Executive: Thank you. Your next question comes from the line of Chris Pierce from Needham. Your line is open. Hey, good morning, everyone. Good morning, everyone.

Unknown Executive: Your next question comes from the line of Chris <unk> from Needham. Your line is open hi.

Christopher Pierce: Hi, Chris Hey, good.

Unknown Executive: Can you just talk about what you've seen broadly over the past year or so? Are there, I know you guys identify sites and you want to drop your Level 3 equipment at that site, but are you seeing an industry shift at all where people that had maybe considered Level 2 sites or Level 2 charging equipment are now moving toward Level 3 because of customers demanding higher fees? I'm just trying to get a sense of how, if you look at how people have thought about this industry growing through 2030, level two was sort of dominating the conversation. But it seems like, over the past year or so, level three is starting to dominate the conversation.

Christopher Pierce: Good morning, everyone. Good morning, everyone can.

Unknown Executive: Can you just talk about what you're seeing broadly over the past year or so.

Unknown Executive: Are there I know you guys identified.

Unknown Executive: Wanted to drop your level three equipment in that but are you seeing an industry shift at all where people that had maybe considered level to say well level two charging equipment are now moving towards level three because the customers demanding higher speeds.

Unknown Executive: I'm just trying to get a sense that if you look at how people have thought about this industry is growing through 2030 level two with sort of dominated the conversation, but it seems like over the past year or so level. Three is there a dominate the conversation. So I just wanted to kind of get your thoughts around that.

Unknown Executive: So I just want to kind of get your thoughts around, Yeah, it's a good question, Chris. I think that Look, I think the landscape is kind of waking up to the potential for level three in a way that maybe didn't exist a few years ago. And again, I talked about charge rates in my script that kind of went on for a little longer, maybe, but I did that because there's a tremendous tailwind here that benefits DC to public DC fast charging if charge rates improve. And you can charge your vehicle at, you know, significantly faster times, maybe half the time.

Speaker Change: Yeah. So good question, Chris and I think that.

Unknown Executive: <unk>.

Unknown Executive: Look I think the I think the sort of <unk>.

Unknown Executive: Land scape is kind of waking up to the potential for level three in a way that maybe didn't exist a few years ago.

Unknown Executive: And again I talked about charge rates in my script I kind of went onto our went on a little longer maybe but I did that because I.

Unknown Executive: There's a there's a tremendous tailwind here that benefits DC public DC fast charging and charge rates improve and you can charge your vehicle at significantly faster times, maybe half. The time I think you are going to be more comfortable with public charging less reliant on.

Unknown Executive: I think you're going to be more comfortable with public charging, less reliant on charging at home. And for site hosts to be able to offer that feature for their customers, which we know is something that customers value. I think it's, I think it's only, you know, it's only one direction of travel.

Unknown Executive: Charging at home and for site hosts to be able to have an offer that that feature for their customers, which we know is something that customers value I think it's I think it's only.

Unknown Executive: It's only one direction of travel and the question is how much share does DC fast charging take of overall charging over the course of the next several years. We believe it's going to continue to grow not just because of charge rates, but also because as these vehicles become more affordable.

Unknown Executive: And the question is how much Share Does DC Fast Charging Take of overall charging over the course of the next several years? We believe it's going to continue to grow, not just because of charge rates but also because as these vehicles become more affordable, customers without access to private driveways are more likely to be buying more affordable vehicles and therefore more reliant on charging and likely will prefer faster. Okay, okay.

Unknown Executive: Our customers without access to private driveways are more likely to be buying more affordable vehicles, and therefore more reliant on charging.

Unknown Executive: And likely will be will prefer faster charging.

Unknown Executive: And you talked about demand-based pricing, which is something you guys might experiment with down the road. Yeah, can you talk about pricing in general? Is that something where they're, Is there really no price pressure that you're seeing now, given the rate of growth of EVs and the lower rate of growth in charging equipment out there, or are there other times of the day where there is pricing pressure on your network, or is this not something that you're seeing right now?

Unknown Executive: Okay, Okay, and you talk about demand based pricing.

Unknown Executive: Experiment with down the road can you talk about pricing in general is that something where there.

Unknown Executive: Is there.

Unknown Executive: Really no price pressure that you're seeing given the rate of growth even with the lower rate of growth in charging equipment out there or is there are there certain times of the day were.

Unknown Executive: There is pricing pressure on your network or is this not something that you're seeing right now.

Unknown Executive: No, there's this. We have very different customer segments that are charging on our network. We have ride share segments or high frequency customers with high usage customers, and that's, And when you put them all together, put all the sort of higher usage customers together, it's over half of our kilowatt hours, which I consider to be quite sticky and more predictable and reliable, and I'd love to have more. And we're expecting to target and have more.

Speaker Change: No it does.

Unknown Executive: We have very different customer segments.

Unknown Executive: On our network.

Unknown Executive: We have rideshare segments of high frequency customer high high usage customers and that's.

Unknown Executive: But as we think about pricing, there's different times of the day and different prices will appeal to different customers. So we are shifting some of our higher usage customers to times of the day when there's less utilization in our network. Earlier times, we call them early bird or off-peak rates; they tend to be lower rates, that frees up the locations for customers that are less frequent users and potentially less sensitive to price.

Unknown Executive: And when you put them all that will put all the sort of higher usage customers together, it's over half of our kilowatt hours, which I consider to be quite sticky and more predictable and reliable and I'd love to have more we're expecting to target and have more.

Unknown Executive: But as we think about pricing theirs.

Unknown Executive: Different different.

Unknown Executive: Times of the day <unk> pricing will appeal to different customers. So we are shifting some of our higher usage customers to two times of the day, where it's where there's less utilization of our network earlier times, we call them early bird or off peak rates they tend to be lower rates that frees up the the.

Unknown Executive: So that's the kind of work we're doing. It's time-based pricing, location-based pricing. Dynamic pricing is not a new concept, and it's not something that we're considering. We are now deploying it.

Unknown Executive: Locations for customers that are less frequent users and perhaps potentially less sensitive towards price. So that's the kind of work, we're doing and it's time based pricing location based pricing dynamic pricing is not a <unk>.

Unknown Executive: Dynamic demand based pricing is not a new concept.

Unknown Executive: So, you know, less around 5% of our network today has dynamic demand based pricing, and we expect to roll that out over the course of this year. And I expect that will deliver some fairly solid improvements to, to actually our margins, which have already improved over the course of the last year, as you see in our results. Margins from our charging business have gone, have doubled over the course of the last year. And that's, that's partly or significantly driven through the leverage that exists in our cost of sales. Okay, and if I could just ask one last question for Olga.

Unknown Executive: And it's not something that we're considering we are now deploying it.

Unknown Executive: So.

Unknown Executive: Less around 5% of our network today has dynamic demand based pricing and we expect to roll that out over the course of this year.

Unknown Executive: I expect that will deliver some fairly solid improvements to to actually our margins, which are already improved over the course of last year as you see in our results.

Unknown Executive: Margins from our charging business have gone.

Unknown Executive: Have doubled over the course of the last year and that's that's partly or significantly driven through the leverage that exists in our cost of sales.

Olga Shevorenkova: On ancillary revenue, you know, we've seen that grow pretty dramatically. I know we're talking about smaller numbers, but what is the margin profile of this business? And is that since, you know, the 10k talks about software and digital revenues, are we talking 75, 80% gross margins, that type of business, and that is providing a gross margin uplift as well? Or am I not thinking about that the right way?

Speaker Change: Okay, and if I could just ask.

Speaker Change: One last question for AGA.

Olga Shevorenkova: On ancillary revenue, we've seen that grow.

Olga Shevorenkova: Pretty dramatically and I know, we're talking about smaller numbers, but what is the margin profile of this business is that you know the <unk>.

Olga Shevorenkova: K talks about against awkward, but your revenues are we talking 70, 580% gross margin, okay that type of business and that is providing a gross margin uplift as well or am I not thinking about the right way.

Olga Shevorenkova: Yeah.

Olga Shevorenkova: Olga, do you want to take that question? Yeah, sorry, I'm using my cell. So, um, so yeah, so most of that revenue is coming from PlugShare. It's the Yelp of Georgian companies, which we bought roughly three years ago. But it also has our behind the fence fleet contracts, which are a couple of them, which we talked about on prior earnings calls. So the margin profile is a mixture of the two.

Speaker Change: I'll get you want to take that question, Yeah, sorry, I'm, losing my thought so.

Olga Shevorenkova: And of course, any software-driven revenue, including PlugShare, will be very high-margin. So look at any SaaS SaaS type company, and you'll get an idea of what kind of gross margins we're talking about. The other business which gets mixed in here, which is behind the fence, has a more extended margin profile, which will be more like in a low double digit territory. So there is a bit of a game of revenue mix happening here.

Olga Shevorenkova: Yes, most of that revenue is coming from block set the yelp of charging company, which were bought three years ago, but it also has all behind defence fleet contracts, which is a couple of them, which we've talked about on Brian on prior earnings calls so the margins.

Olga Shevorenkova: Profile is a mixture of the two and of course any software driven revenue, including blocks there will be a very high margins. They will look at any SaaS, Scott SaaS type of a company and you'll get an idea of what kind of gross margins. We're talking about the other business, which gets mixed in here, which is behind the fence and that has a more extended like margin profile.

Olga Shevorenkova: We'll be looking at in the low double digit territory. So the there was a bit of a game of a revenue mix happening here, but considering that it's a very small it's still relatively small revenue contribution lost margin trends have been played by into play or expand in our core charging business rather than <unk>.

Olga Shevorenkova: Olivier.

Speaker Change: Okay perfect. Thank you.

Speaker Change: Thanks, Chris.

Olga Shevorenkova: But considering that it's a very small, it's still relatively small revenue contribution, most margin trends are being driven by the interplay of expand and the core charging business rather than, Okay, perfect. Thank you. Thanks, Chris. Your next question comes from the line of Andres Sheppard from Kent or Fitzgerald. Your line is open. Hey, everyone. Good morning.

Olga Shevorenkova: Your next question comes from the line of Andrew Shepherd from Cantor Fitzgerald. Your line is open.

Andres Juan Sheppard: My address.

Unknown Executive: And congratulations on the quarter. And thanks for taking our questions. Yeah, thank you. I just wanted to maybe come back to the utilization rate, which seems to be growing again at a very rapid pace, which is great. I'm just wondering, you know.

Andres Juan Sheppard: Everyone. Good morning, and congratulations on the quarter and thanks for taking our questions. Thank.

Andres Juan Sheppard: Thank you.

Andres Juan Sheppard: Wanted to maybe come back to the utilization rate that seems to be growing again at a very rapid pace, which is great.

Andres Juan Sheppard: I'm just wondering.

Unknown Executive: I realize you don't guide this, but just maybe some direction here would be helpful. You know, how should we think about network throughput throughout the year? I know you touched on seasonality a little bit, but at this rate, should we be thinking of that gigawatt hour to be, you know, north of 200 or 215 for the year? In other words, how should we think about the network throughput throughout the rest of this year? Thank you. Yeah, I mean, look, I'll let me just, I'll ask Olga to give you some thoughts about 2024 specifically.

Andres Juan Sheppard: I realize you don't guide, but just maybe some direction here will be helpful. How should we think about that network throughput throughout the year I know you touched on seasonality a little bit but you know.

Olga Shevorenkova: At this rate.

Olga Shevorenkova: Should we be thinking of that.

Olga Shevorenkova: Gigawatt hour to be north of two.

Olga Shevorenkova: 200, or 215 for the year in other words, how should we think about the network throughput throughout the rest of this year. Thank you.

Olga Shevorenkova: But as you can see on the Compelligated Economics slide, and we talked a bit about it in our webinar a few weeks ago, the utilization of the top 15% of our network is already at 41%. Now, we're not expecting 41% utilization across our entire network. In fact, we've said that we expect to see utilization in three to five years in the low 20s. We don't expect anything more than that to get double-digit returns.

Olga Shevorenkova: Yes, I mean look I'll, let me just I'll ask I'll give this to give you some thoughts about 2024 specifically.

Olga Shevorenkova: But as you can see in the <unk>.

Olga Shevorenkova: [noise] compelling unit economics, slide and we've talked about in our webinar a few weeks ago.

Olga Shevorenkova: Utilization of the top 15% of our network is already at 41%.

Olga Shevorenkova: Now, we're not expecting 41% utilization across our entire network. In fact, we've said that we expect to see utilization in three to five years in the low twenties, we don't expect anything more than that to get to double digit returns.

Olga Shevorenkova: And so that's a way of thinking about utilization in the medium term. It's obviously a combination of utilization and charge rate that delivers throughput per store, which is the quantity, the Q, in a revenue formula. But maybe, Olga, you want to just provide some thoughts on 2024 specifically? Yeah. So, as you correctly mentioned, we do not guide to gigawatt hours, but maybe I can give you a little bit of a path to get there yourself.

Olga Shevorenkova: And so.

Olga Shevorenkova: That's.

Olga Shevorenkova: Maybe that's a way of thinking about utilization in the medium term. It's obviously a combination of utilization and charge rate that delivers throughput per store, which is the quantity of the Q and a revenue formula.

Olga Shevorenkova: But maybe I'll go you wanted to provide.

Olga Shevorenkova: Provide some thoughts for 2024 specific yeah. So so.

Olga Shevorenkova: So as you correctly mentioned, we do not guide to two gigawatt hours, but maybe I can give you a little bit of a paths to get to there yourself. So we gave the color during our last call. We expect extended revenue to be roughly 35% of our revenue this year.

Olga Shevorenkova: So we gave color during our last call that we expect extended revenue to be roughly 35% of our revenues this year at the midpoint of the range, and the range is between 20 to 270. So if you subtract that, right, then the rest of the variability comes from, still, a prevailing uncertainty of EV sales this year. Said another way, it comes from uncertainty on the final number or the throughput number.

Olga Shevorenkova: Mid point of the range and the range is due to anchor to <unk> 17.

Olga Shevorenkova: If you subtract that rate than the rest of it the liability comes from still.

Olga Shevorenkova: The prevailing uncertainty of EV sales this year.

Olga Shevorenkova: Other ways. It comes from uncertainty around the final number Oh, they're stupid number. So if you take our average pricing with chicken derived from our financial statements you can very easily get to a range of gigawatt hours, which we're thinking about for this year.

Olga Shevorenkova: So if you take our average pricing, which you can derive from our financial statements, you can very easily get to a range of gigawatt hours which we're thinking about for this. Okay, I guess that's helpful. But then, it's safe to assume maybe a higher, some more seasonality in Q4, since that's usually the strongest EV quarter. I'm just trying to figure out like, should we, should it be a smooth, gradual number, quarter over quarter? Or should we account for some seasonality throughout the year?

Olga Shevorenkova: Yeah.

Olga Shevorenkova: Okay, I guess that's helpful, but so but then.

Olga Shevorenkova: Safe to assume maybe a higher.

Olga Shevorenkova: Some more seasonality in Q4 since that's usually the strongest EV quarter.

Olga Shevorenkova: Im just trying to figure out like should we.

Olga Shevorenkova: Should it be a smooth gradual number quarter over quarter or should we account for some seasonality throughout the year. Yeah. So it is stacked smooth however.

Olga Shevorenkova: Yeah, so we do expect smooth sailing. However, again, EV sales are something we don't have control over and do not kind of understand exactly how they will play out for the rest of the year. We have an expectation that they will be smooth. But if you think about specific seasonality and driving patterns, then the Bureau of Transportation Statistics actually publishes the publicly available data.

Olga Shevorenkova: However, again, if your sales are something we don't have control on and have a.

Olga Shevorenkova: Have a did it all kind of understand exactly how it will play out for the rest of the year would have an expectation that it will be small, but if you think about specifics as an island in a jive N partners than thereof transportation statistics actually publishes that's publicly available data and you could see how theyre driving patterns play out.

Olga Shevorenkova: And you could see how the driving patterns play out between the quarters by using that information. I think it will actually be quite helpful. Okay, thanks. We'll take a look at that. Just as a reminder, EV sales obviously are a driver of revenue, but our throughput grew four times faster than the growth of EV VIO, quarter over quarter, which we've talked about for a couple of several quarters at this point. New sales, but it's also the share of DC fast charging, ride share growth, and more affordable vehicles, leading to customers who don't have private driveways charging on public infrastructure.

Olga Shevorenkova: When the quarters by using that information I think it will be up to a quite helpful.

Olga Shevorenkova: Yeah.

Speaker Change: Okay, great. Thanks, well, we'll take a look at that.

Olga Shevorenkova: Yes.

Olga Shevorenkova: Just as a reminder.

Olga Shevorenkova: E V sales, obviously is the driver of revenue, but but but our throughput grew four times faster than the growth of E V V I O.

Olga Shevorenkova: We're over quarter, which we've talked about for a for a couple of sort of several quarters at this point so it's.

Olga Shevorenkova: New sales, but it's also.

Olga Shevorenkova: The share of DC fast charging it's rideshare growth, it's more affordable vehicles.

Olga Shevorenkova: Leading to customers, who don't have private driveways charging on public infrastructure. So it's a revenue is a function of all of these things combined and we expect to see a growth sequentially over the course over the year.

Unknown Executive: So our revenue is a function of all of these things combined, and we expect to see it grow sequentially over the year. Yeah, and I think it's also a result of the utilization rates, the average utilization rates per charge, which is continuing to increase, right, which you mentioned earlier. Yeah. Okay. I'll just ask one last question. And by the way, Olga, sorry; I wish you all the best in your future. Thank you. We'll certainly miss you.

Unknown Executive: Yeah.

Unknown Executive: Yeah, and I think it's also a result of the utilization rates of the the average utilization rates per charger, which is continuing to increase right with you yes. The earlier.

Unknown Executive:

Speaker Change: Maybe just one last question and by the way all of US sorry, I wish you all the best in Europe.

Olga Shevorenkova: Maybe one last question for you, I guess, is just on the liquidity. You can just remind us of the, let's call it 176 million in liquidity as of Q1. Excluding any maybe funding or any external funding, what is the expected run rate with that liquidity on hand? Is that still well into 2025, or what's the message there? Thank you. Correct. We're confirming that's still the message. However, I'm not excluding any grants, which we will be collecting.

Olga Shevorenkova: We'll certainly Miss you.

Olga Shevorenkova: Maybe one last question for you I guess is just on the liquidity.

Olga Shevorenkova: Can you just remind us with the let's call it 176 million in liquidity as of Q1.

Olga Shevorenkova: Excluding any maybe funding or any external funding what is the expected run rate with that illiquid.

Olga Shevorenkova: Liquidity on hand is that still into well into 2025 or what what's the message there. Thank you.

Olga Shevorenkova: Correct.

Speaker Change: We will confirm if that's still the message.

Olga Shevorenkova: However, I'm not excluding any grants, which were a little bit galactan, it's not necessarily NAV is a big driver, though as we discussed at length. In this call. We are have applied and have been awarded a variety of different graph grants across the country from a variety of different programs that are awarded to us and the collection is just a question of execution.

Olga Shevorenkova: It's not necessarily NAVI that is a big driver, but as we discussed at length on a previous call, we are, have applied for, and have been awarded a variety of different grants across the country from a variety of different programs that are awarded to us.

Olga Shevorenkova: And the collection is just a question of execution and time. And so that is baked into all of our central planning and budgets and whatnot. So when we talk about cash, that is certainly included because that is part of the business. Okay. Very helpful. Thanks again. Congratulations on the quarter. I'll pass it on.

Speaker Change: And in time, and so that is baked into all of our central planning and budgets and whatnot. So when we talk about about cost that is certainly included because that is part of the business model.

Olga Shevorenkova: Yeah.

Speaker Change: Okay got it very helpful. Thanks, again, congratulations on the quarter I'll I'll pass it on.

Speaker Change: Thanks Andrea.

Unknown Executive: Thanks, Andres. Your next question comes from the line of Bill Peterson from J.P. Morgan. Your line is open. Hi, Bill. Yeah, hi, good morning.

Olga Shevorenkova: Your next question comes from the line of Bill Peterson from Jpmorgan. Your line is open.

Unknown Executive: Thanks for taking the questions. I wanted to ask about reliability and uptime. How are the trends, I guess, proceeding on your network? And are there any ways to quantify the operational benefits from the renewed program that you started employing last year? But can you quantify what you've seen thus far?

William Chapman Peterson: Hi, Bill, Yes, hi, good morning.

Speaker Change: Thanks for taking the questions.

Unknown Executive: Wanted to ask about reliability and uptime.

Unknown Executive: How are the trends I guess proceeding on their network.

Unknown Executive: No way to quantify the operational benefits from our renewed program that you've seen.

Unknown Executive: Instead of employee last year, but can.

Unknown Executive: Can you quantify what you're seeing thus far.

Unknown Executive: Yeah, we see great improvement. And again, Bill, it's it's a what? As we think about the customer experience, uptime is a component of the experience. So having led many asset-based businesses in my career, uptime is a component of the customer experience, which continues to improve. But so does ensuring that the payment process is as fast and quick as possible, making sure that there's a charger available when a customer goes to a site, which is why we're targeting more, more chargers per site, as well as a lot, enormous amounts of feedback that customers favor faster sites, so we're prioritizing a 350 kilowatt charger.

Speaker Change: Yes, we see great improvement and again bill its a as we think about the customer experience uptime is a component of the experience we have.

Unknown Executive: He led many asset based businesses in my career uptime is a component all.

Unknown Executive: The customer experience, which continues to improve.

Unknown Executive: But so does ensuring that the payment process is as fast as quick as possible, making sure that there is a charger available when a customer goes to a site, which is why we're targeting more more charges per site as well as a lot enormous much feedback with customer favorite faster sites.

Unknown Executive: <unk> kilowatt charges.

Unknown Executive: Optima is certainly improving.

Unknown Executive: But uptime is certainly improving. Some of the software updates that I talked about earlier, in terms of predictive maintenance and sort of diagnostic support, are all designed to improve uptime even more over the course of this year, which leads to a reduction in truck rolls, customer calls, and costs in the business. So we're pretty good about that. Okay, thanks for that.

Unknown Executive: Some of the software updates that I talked about earlier in terms of predictive maintenance and intuitive.

Unknown Executive: Diagnostic support are all designed towards <unk>.

Unknown Executive: Improving uptime, even more over the course of this year, which leads to a reduction in truck rolls customer calls and.

Unknown Executive: <unk> costs in the business.

Unknown Executive: Feel pretty good about it.

Unknown Executive: And then we're going to try to talk about gross margin trajectory, I guess, taking into account your expectations around utilization, you know, network throughput, I was going to think about the gross margin trajectory based off of what you talked about earlier, time of day, charging, price increases, but I guess also potential, I guess, energy rate, either increases or at least time of day charges. And then to remind us, is there any seasonality for that? And in terms of how that would flow through on the gross margin line? Yeah.

Speaker Change: Okay. Thanks for that and then we're trying to talk about gross margin trajectory I guess taken into kind of your expectations around utilization no network throughput.

Unknown Executive: Do you think about the gross margin sector and based off of what you talked about earlier time again charging price increases, but I guess the potential I guess energy right.

Unknown Executive: Either increases or 10 day charges, and then remind us is there any seasonality for that in terms of how that would flow through on the gross margin line.

Olga Shevorenkova: So, gross margin, we reported over 30% for Q1. However, in my prepared remarks, I mentioned that we had two and a half million of Nissan breakage recognition, which is typical for Q1, that inflates the margin. So like adjusted gross margin is in the high 20s, and the expectation for the rest of the year is mid to high 20s. So there is a seasonality to that number because we're a C&I customer of various utilities, and utilities tend to have summer and winter tariffs.

Unknown Executive: Yeah.

Unknown Executive: Yes, so gross margin we reported over 30% for Q1. However in my prepared remarks, I mentioned that we had a two and a half kneeling of Nissan breakage to cognition, which is typical for Q1 and it does inflate inflate the margin so like our adjusted adjusted gross margin this isn't the high <unk>.

Olga Shevorenkova: Lenses and the expectation for the rest of the year is it needs to high plant that says it is a seasonality to that number because with CNI customer of various utilities and utility tend to have some land Windsor status and Sandler and summer is defined in a variety of different ways. Because that's when you feel it is but it tends to be around the real summer.

Olga Shevorenkova: And summer, and summer is defined in a variety of different ways across different utilities, but it tends to be around the real summer versus around the real winter. And summer tariffs are a little higher than winter, in some cases, actually, they're quite a bit higher than winter.

Olga Shevorenkova: Moving on to the winter and some of that is a little higher than Windsor in some cases actually they're quite a bit higher than winter. So you should expect to see a little lower margin over the summer theater thinking back by Q4 to the winter time.

Badar Khan: So you should expect to see a little lower margin over the summer period, picking back up by Q4 for the wintertime. And maybe Bill, if I could just make sure that we are talking about the entire business, both our charging business, as well as our non-charging revenue. We have provided disclosure for you to see for yourself, margins in our charging business specifically, and they were 15%, roughly 15% last year.

Speaker Change: And maybe bill if I could just make sure that we when you're talking about gross margin. We are talking with August walking you about the entire business both are charging business as well as our the non charging revenue. We have provided disclosure for you to see for yourself margins in our charging business.

Badar Khan: Specifically.

Olga Shevorenkova: And it's right in 2022 up to about 28% in 2023, and for this first quarter of 2024, they were in the mid to high 30s. And so let me maybe clarify my answer as well, business, when I quoted the absolute numbers when I talked about the dynamics, it's related to charging business when we talk about the dynamics and extend business, just to add to what Badar said, that you probably will see a stable gross margin profile throughout the year versus Q1 and Q4. Okay, thanks, Olga. Thanks, Badar. Yep.

Badar Khan: And they were 15 roughly 15%.

Olga Shevorenkova: Last year and it.

Olga Shevorenkova: It's really in 2022 up to up to about 28% in 2023 and this for this first quarter of 2024, they were in the mid to high Thirty's.

Olga Shevorenkova: The charging business itself.

Olga Shevorenkova: And so it wasn't Amanda clarify my answer as well.

Olga Shevorenkova: The business when I quoted the absolute numbers when I talk about the dynamics, it's related to charging business. When we talk about the dynamics and extend business just to add to what BARDA is that that you'll probably see a stable gross margin profile throughout the year versus Q1 and Q4.

Olga Shevorenkova: Yeah.

Speaker Change: Okay, Thanks, Olga and I think sputter yep.

Unknown Executive: And this concludes our question and answer session. I will now turn the call back over to CEO Badar Khan for some final closing remarks. Great. Well, look, thank you, everyone, for the call. We had another great and record quarter. As you heard, we have very compelling new economics and operating leverage that will drive very strong EBITDA in the near term and a growth engine that is generating strong returns for our investors.

Olga Shevorenkova: And this concludes our question and answer session I will now turn the call back over to CEO Badar Khan for some final closing remarks, great well look thank you everyone for the call we had a great another great and record quarter as.

Unknown Executive: As you heard we have very compelling unit economics, and operating leverage that drives very strong EBITDA in the near term and a growth engine that is generating strong returns for our investors.

Unknown Executive: The change in the competitive landscape that we've talked about presents even greater opportunities for Evgo to accelerate growth and deliver even stronger returns, taking advantage of the multiple sources of competitive advantage that we now have. And I look forward to providing updates on these competitive advantages in our priorities and progress on subsequent calls. Thanks very much, everyone. This concludes today's conference call. Thank you for your participation. You may now disconnect.

Badar Khan: The change in the competitive landscape that we've that we've talked about presents even greater opportunities for E. V go to accelerate growth and deliver even stronger returns taking advantage of the multiple sources of competitive advantage that we now have and I look forward to providing updates.

Unknown Executive: On these competitive advantages in our priorities and progress on subsequent calls thanks very much everyone.

Unknown Executive: This concludes today's conference call. Thank you for your participation you may now disconnect.

Unknown Executive: This concludes today's conference call. Thank you for your participation you may now disconnect.

Unknown Executive: Okay.