Q1 2024 EVgo Inc Earnings Call

Operator: Thank you for standing by, and welcome to the EVgo First Quarter 2024 Earnings Conference Call. All lines have been muted to prevent any background noise.

Thank you for standing by and welcome to the E. V. Go first quarter 2024 earnings conference call all lines have.

Operator: 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 star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one. Thank you. I'd now like to call Heather Davis, Vice President of Veterans Relations. You may begin.

Operator: Mute to prevent any background noise. After the Speakers' remarks, there will be a quite.

Heather Davis: If you'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question I get these star one thank you.

Operator: The call over to Heather Davis, Vice President Investor 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.

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

Heather Davis: 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: Joining me on today's call are Badar Khan Chief.

Heather Davis: Chief Executive Officer, and Olga Sharper in Cola Ebitdas, Chief Financial Officer.

Heather Davis: Today, we will be discussing <unk> first quarter financial results.

Heather Davis: 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 Dot E V go Dot com.

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

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

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.

Heather Davis: 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.

Heather Davis: Also please note that we will be referring to certain non-GAAP financial measures on this call information about these non-GAAP measures, including a reconciliation to the corresponding GAAP measure can be found in the earnings 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. 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: Good morning, everyone and thank you for joining us today.

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 prominent successor is on board.

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

Badar Khan: All of that has been a trusted and valued partner to me since I joined <unk> and has been critical in driving the success of the company. Since you joined D. V 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 Leigh <unk>, our EVP of accounting and finance, who will serve as interim CFO. When the time of August departure until a permanent successor is on board, we are well underway with a search process and 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 to share. Now, 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 over year. 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 Let me also take a moment to address the change in our competitive landscape.

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

Badar Khan: E V go 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: I'm 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 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 US as well as in other countries, that affordability is a key driver of mass adoption. Companies like EVgo are now adding public charging stations at a pace that didn't exist when Tesla began its supercharger business.

Badar Khan: If test this decision to halt further growth of charging stations was designed to allow them to focus on the automotive business and particularly more affordable vehicles and 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 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 E V go to plug the gap left behind and accelerate their charging.

Badar Khan: 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. We're excited to be able to add NAX connectors to our chargers later this year and welcome more tested drivers to our network, as well as help site hosts 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: <unk> growth.

Badar Khan: We added over 900 stores last year, most of which were state of the art Ultra fast 350 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 charges later this year and welcomed more test the drivers to our networks 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.

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 and 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 nearly tripling year over year, and while revenues grew just over twofold, revenues from the old and operational charging network grew faster. 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: 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 old operative charging network grew faster.

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

Badar Khan: <unk> accounts continue 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: 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: 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 its 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. 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.

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

Badar Khan: This past quarter, we saw especially strong sales growth from Ford Vivian 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 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: 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 account for the vast majority of our network throughput today, we expect to start adding next connectors to our charges later this year.

Badar Khan: And given that 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 where EBIT drivers lease to go about their daily lives.

Badar Khan: And our networks increasingly ultra fast $3 50 kilowatt Chargers versus test is $2 50 kilowatt 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 per store 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 he these take energy into the car and utilization is the percentage of time and individual stool is being utilized over.

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. In three to five 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, 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 and daily throughput per store.

Badar Khan: And three to five Years' time, we expect to have around 7000 stalls 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 the 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 expectations.

Badar Khan: As we've described in our prior two calls <unk> 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 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 at. 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.

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 once 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 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 would be generating around $200 million in adjusted EBITDA annually, with very significant continued growth beyond that. Of course, this is prior to the contribution of any extended or ancillary and tech-enabled service.

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: 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 EV Chargers 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 kilowatt, and over 50% are over 90 kilowatt. We conservatively assume battery electric vehicles are sold using the 2023 sales mix with no improvements to either vehicle mix or battery technology.

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 in fact over 80% of all <unk> sold today, a charge rates over 50 kilowatts and over 50.

Badar Khan: Percent are 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 right.

Badar Khan: And that represents roughly 70% of the assumed increase in charge rates from 43 to 80 kilowatts across our network in 3 to 5 years. EVgo continues to add mostly 350-kilowatt chargers to its network. And today, nearly 40% of our network is 350 kilowatts versus 22% a year ago.

Badar Khan: 43% to 80 kilowatts across our network in three to five Years' time.

Badar Khan: E V go continues to add mostly $3 50 kilowatt charters through our network and today nearly 40% of our network is $3 50 kilowatts versus 22% a year ago.

Badar Khan: Therefore, the average mix of our charger network also increases over time and contributes the other 30% of the assumed growth in network charge rates. The combination of the two means charge rates are expected to improve significantly, benefiting the company. 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: Therefore, the average mix of our Charger network also increases over time and contributes the other 30% of the assumed growth 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.

Badar Khan: EV adoption drives up utilization.

Badar Khan: Higher charge rates 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 less concerned with charging at home, therefore, higher charge rates could lead to higher utilization and thus even higher returns per store if.

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 stalls today with 80 kilowatt charge rates, we would double the cash flow per stall to over $75,000 annually. And third, higher charge rates translate into much improved capital efficiency because it allows a smaller number of chargers for the same kilowatt hours dispensed. 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 in three to five years.

Badar Khan: If we had 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 stall to over $75000 annually and.

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've 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: Years time.

Badar Khan: Let's now turn to our four key priorities over the next years. 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 calls. 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. And finally, we will provide a little more detail on progress on securing financing to get to free cash flow breakeven. In terms of customer experience, we know that there are four things that customers value the most.

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 above and 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: 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: First, having lots of stalls at a site so they never have to wait for a charge. 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 automatically.

Badar Khan: Having high power Chargers available so they can fuel up quickly.

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

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% by the end of this year. We're mostly also only deploying 350-kilowatt chargers now, and so the percentage of stalls with 350-kilowatt chargers has nearly doubled year over year.

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

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 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 a key software update. 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 release the key software update.

Badar Khan: 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 efficiencies, not just in operating costs but also in the capital costs of the charger. 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%.

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 have begun to turn our attention to identifying and delivering efficiencies not just in operating costs, but also in the capital costs of the charges 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 electrical sites and also to reduce station installation timelines by as much as 50% we expect over a third of stores operationalized in 2025 to benefit from this approach.

Badar Khan: We expect over a third of stalls operationalized in 2025 to benefit from this approach, and we will continue to grow this over time. Our core owned and operated business has very compelling united 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: 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.

Badar Khan: In January of this year, we streamlined and refocus 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 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. Coal center costs are a sizable portion of our sustaining GNA and are expected to decline this year as we complete the offshoring of around 90% of our coal volume, which is anticipated in Q3 this year. 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: In addition over the course of this year will 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 the.

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 the 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 2026.

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: <unk> 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 a step change in customer experienced due to our customer focus design and improve firmware with first deployments expected to the SEC.

Badar Khan: Half of 2026 <unk>.

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. In other words, over half of our throughput comes from higher usage, relatively predictable customer segments that represent stickier kilowatt hours.

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

Badar Khan: Even though has had success in growing our recurring customer base through <unk> 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 use.

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

Badar Khan: 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 higher-value retail customers, as well as increase the value of existing customer relationships. 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.

Badar Khan: We reached almost a million customer accounts at the end of the quarter, a significant milestone with <unk> underscoring the quality of the Igo 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.

Badar Khan: Listing customer relationships too.

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 Mccarry and Philips electronics.

Badar Khan: 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: 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.

Badar Khan: 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 opened per year from the 800 to 900 we are expecting to add this year. We plan to build on the track record already established with successful grant collections in prior years, a successful partnership with GM, and the follow-on offering we completed in May last year.

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 of 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. 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 2025. 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.

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 30 C transaction over the next few months.

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.

Badar Khan: 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 unit 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.

Badar Khan: While we have not disclosed the quantum of loan we are seeking accounted by you said 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.

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

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

Badar Khan: Yes.

Badar Khan: 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, Badar. 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: Thank you Bob.

Olga: Before I dive into <unk> first quarter 294 financial results I wanted to extend gratitude I havent had an opportunity to serve as even though chief financial officer.

Olga Shevorenkova: Part of the team focused on growing the bank over the past six years and working closely with our investors and analysts has been a pleasure and the remarkable journey I am proud of all we have accomplished and excited about the path forward.

Olga Shevorenkova: We have a well planned transition in place as Bahram mentioned and the deep 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 charging gravity.

Olga Shevorenkova: With that said I will now discuss our first quarter results.

Olga Shevorenkova: <unk> started with a sensor for delivering another strong quarter of growth and execution.

Olga Shevorenkova: Revenue in the first quarter was $55 10 therein, which represent.

Olga Shevorenkova: <unk> hundred 18% year over year.

Olga Shevorenkova: This growth was primarily driven by increased charging revenues.

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 rideshare 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 We added 250 new operational stores in Q1, including Xtent.

Olga Shevorenkova: Retail charging revenues of $18 3 million grew from six 6 million in the first quarter of 'twenty Atlantis <unk>.

Olga Shevorenkova: Dividend and 177% year over year increase.

Olga Shevorenkova: Commercial China avenues, which primarily includes revenue from our <unk> partnerships.

Olga Shevorenkova: Five 8 million increased from one 7 million in the first quarter 'twenty one to see.

Olga Shevorenkova: Exhibiting at 240% year over year.

Olga Shevorenkova: And extend revenue.

Olga Shevorenkova: Tim Glenn to Milan.

Olga Shevorenkova: From 10 3 million in the first quarter of 'twenty fantasy increasing 86%.

Olga Shevorenkova: Yes.

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

Olga Shevorenkova: Total stalls in operation were approximately 3,240 at the end of March 2024, including 130 EVgo Xtend stalls, increasing 38% from the end of March 2024. During the first quarter of 2024, EVgo added 109,000 new customer accounts, which is 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. 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 VIO.

Olga Shevorenkova: Total stores in operation were approximately 3240 at the end of March two 1% before including 130, either go extend itself increasing.

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

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

Olga Shevorenkova: The sensing lead versus $6 7000 customer accounts.

Olga Shevorenkova: Ed It in Q1, two and three.

Olga Shevorenkova: <unk> ended the quarter with more than 981000 customer accounts.

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

Olga Shevorenkova: Even though as network throughput 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 aisle.

Olga Shevorenkova: 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. Additionally, EV buyers are shifting from early to mass adopters with a higher portion of multi-unit dwellers. 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.

Speaker Change: I would like to reiterate what can drive this growth.

Olga Shevorenkova: First and foremost.

Olga Shevorenkova: The option.

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

Olga Shevorenkova: Please go under 9% year over year in the first quarter.

Olga Shevorenkova: Second he buyers assistant from early two months adopted within higher portion of multi unit dwellings.

Olga Shevorenkova: Sure.

Olga Shevorenkova: Vehicle miles channel is increasing nearing parity with internal combustion engine vehicles.

Olga Shevorenkova: Pores rapid growth in the rideshare, and finally had a less efficient EV models.

Olga Shevorenkova: As a result, utilization averaged approximately 19% across the network in the first quarter of 2024. 53% of our stalls had utilizations greater than 15%, and over 40% of our stalls had utilizations greater than 20%.

Olga Shevorenkova: As a result utilization averaged approximately 19% across the network in the first quarter of 2024.

Olga Shevorenkova: This 3% allows us, though have utilization greater than 15% over 40% of our staff have utilization greater than 20%.

Olga Shevorenkova: And now with 20% of our staff have utilization greater than 30%.

Olga Shevorenkova: And over 20% of our stores have 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.

Olga Shevorenkova: And I touched on earlier revenue.

Olga Shevorenkova: 118% in the first quarter of 224 to $55 2 million.

Olga Shevorenkova: Adjusted gross profit was 17 3 million in the first quarter of transatlantic for up from six 4 million in the first quarter Transit fantasy.

Speaker Change: Hey, Jonathan gross margin was 31, 3% in the third quarter of 2024.

Olga Shevorenkova: Q1 revenue usually caused the break or two related to our near term context. In Q1, 2024 breakage revenue was roughly $2 5 million.

Olga Shevorenkova: In Q1 2024, breakage revenue was roughly $2.5 million. 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 2024. 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 sale.

Olga Shevorenkova: 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 transatlantic.

Olga Shevorenkova: When you compare this adjusted number so similar adjusted number from Q1 2003, we still see an increase of 11 percentage points from 16, 8% in the first quarter.

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

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 2023.

Olga Shevorenkova: Adjusted G&A as a percentage of revenue improved significantly.

Olga Shevorenkova: <unk> hundred four 6% in the first quarter a trend that went to see the 44, 4% in Q1 of this year.

Olga Shevorenkova: <unk> savings the leverage effects from our G&A.

Olga Shevorenkova: Adjusted G&A went from 12 to $6 5 million in Q1, two and three.

Olga Shevorenkova: This was a $4 5 million in Q1, some of that went before clearly illustrating our focus on lean operations and path to profitability.

Olga Shevorenkova: Adjusted EBITDA was negative $7 2 million in the first quarter of 'twenty 'twenty four.

Olga Shevorenkova: $12 9 million improvement versus negative 21 million in the first quarter of transatlantic.

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, narrowing from the first quarter of 2023. Capital expenditures were $21.1 million in the first quarter.

Olga Shevorenkova: Cash cash.

Olga Shevorenkova: Evelyn and restricted cash was $175 5 million as of March 31st two lenses plentiful.

Olga Shevorenkova: Cash used in operations was $14 1 million in the first quarter.

Olga Shevorenkova: From the first quarter of 'twenty fantasy.

Olga Shevorenkova: Capital expenditures were $21 1 million in the first quarter capital.

Olga Shevorenkova: And it does not have capital offset with $13 6 million in Q1 of 2024.

Olga Shevorenkova: Capital expenditures net of capital offsets were $13.6 million in Q1 of 2024. Now, turning to re-confirming our 2024 guidance. 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 cap hacks to add 800 to 900 new EVgo owned stalls this year.

Olga Shevorenkova: Now turning to reconciling our transatlantic for guidance.

Olga Shevorenkova: Even though continues to expect full year 200000, Florida Avenue to be in the range of 220 million to 270, <unk>, 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 capsule offset to be in the 95 to 110 million range, whereas the main use of Scott pack.

Olga Shevorenkova: 800 to 900 and you if you go on this year.

Olga Shevorenkova: We're as confident as ever that EVgo is on a clear path to an important inflection point in our business, hitting adjusted EBITDA break-even. EVgo expects to be adjusted if it breaks 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.

Olga Shevorenkova: We're as confident as ever that is.

Olga Shevorenkova: Even though is on a clear path.

Olga Shevorenkova: Important inflection point in our business hitting adjusted EBITDA breakeven.

Olga Shevorenkova: Even though expect to be adjusted EBITDA breakeven for the full year of 295.

Olga Shevorenkova: This is based on the expectation that electric vehicles in operation, We will continue to grow and let it go we'll continue to expand its network and realize operational efficiencies.

Olga Shevorenkova: We 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.

Operator: Thank you. We will now begin the question and answer session. 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. Your first question comes from the line of Gabe Dove from TD Cowan. Your line is open.

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.

Operator: We'd like to withdraw your question simply press Star One again, if you are called upon to ask your question and our listening via loudspeaker on your device. Please pick up your handset and ensure that your phone is not on mute when asking your question.

Gabriel J. Daoud: Our first question comes from the line of Gabe Daoud TD Cowen Your line is open.

Gabriel J. Daoud: Thanks and good morning. Hey, Badar. Morning, everyone. And congratulations, Olga, on the new opportunity. Badar, we're hoping we could just maybe get some general thoughts on the piece of news that hit recently about 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,

Gabriel J. Daoud: Hi, Thanks.

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

Gabriel J. Daoud: On the new opportunity.

Badar Khan: Yeah, thanks, Gabe. 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 it allows Tesla to focus on cars and more affordable cars, as they've been talking about recently with the Model 2. 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.

Gabriel J. Daoud: But I was hoping we could just maybe get some general thoughts.

Badar Khan: 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 D. V go and book, maybe the near and long term from a market share perspective.

Gabe: Yes, Thanks Keith.

Badar Khan: But 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 tax law to focus on cars and more affordable cars as <unk> been talking about recently with the model to I think that's great for EV adoption I think we all see that affordability.

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

Badar Khan: 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 a positive. I think it's a very positive for EVgo.

Badar Khan: We see that from.

Badar Khan: Almost all of the other Oems on their earnings calls in terms of brewing up more affordable vehicles. So I think thats a positive.

Badar Khan: It's very positive for <unk> I think that.

Badar Khan:

Badar Khan: You know, we have talked about very strong economics on this call, and I expect to see that continue for, frankly, or improve in the foreseeable future. I expect to see that demand exceeds supply of charging stations for some time. Companies like EVgo just really didn't exist 12 years ago when Testa began its supercharger business, but they do exist today. We added over 900 stalls, as we said last year, which are state-of-the-art, ultra-fast 350 kilowatt chargers.

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

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

Badar Khan: Companies like E Z go.

Badar Khan: Really didn't exist 12 years ago.

Badar Khan: When it has to be honest supercharger business, but they exist today, we've added over.

Badar Khan: Over 900 stores as we said last year, which was 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 to pick up some of the slack.

Badar Khan: 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 Testa may be leaving behind.

Badar Khan: In terms of charging station growth that testing would be leaving behind.

Gabriel J. Daoud: Perfect. That's helpful. That's a great color, too.

Badar Khan: Perfect.

Speaker Change: Thats helpful. Thats, Great color and then I guess, just as a follow up maybe switching gears to financing you noted about our in the in.

Gabriel J. Daoud: 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 of months. Is there any additional color you can provide on expectations and maybe remind us if the 800 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.

Gabriel J. Daoud: In your prepared remarks, 30, <unk> may be 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 qualify for the 30% reimbursement and then the second part of that question is Jeff <unk>.

Gabriel J. Daoud: Process.

Gabriel J. Daoud: If you can maybe just dial in.

Gabriel J. Daoud: More.

Gabriel J. Daoud: Detail around that and maybe specifically just timing around when do you think we can get good answer thanks guys.

Badar Khan: Sure, sure, sure. So maybe I'll ask Olga just to comment on the 30C transaction during the course of this year. But in fact, start with the DOE loan. 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, and we know it's a very important part of President Biden's agenda.

Badar Khan: Sure sure. So maybe I'll ask I'll give just a comment on the 30 transactions over the course of this year, but it <unk> start with the Doe loan.

Badar Khan: Look we we think we have a very high quality application in front of the daily 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.

Olga Shevorenkova: No. It's a very important part of present items with gender.

Badar Khan: And, you know, given again, I think the economics that we've shared with you on this call and previous calls would suggest that 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 us to be, if we're successful, to be over the course of this year. We have not shared a quantification.

Badar Khan: And.

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

Badar Khan: 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 could be over the course of this year, we have not shared a quantum but what I can share with you is that we would expect.

Badar Khan: But what I can share with you is that we'd expect the quantum here to accelerate our rate of growth from the eight to nine hundred stalls that we're doing this year, the nine hundred plus that we did last year. And at the same time, accelerate our point, our journey to free cash flow break, even at a higher rate. That's what we're looking at for the DOE loan. But, of course, it's not our only source of non-dilutive financing.

Badar Khan: Tim here to accelerate our rate of growth from the eight to 900 stores that we're doing this year. The 900 plus that we did last year 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: That's what we're looking at for the daily loan of course, it's not our only source of non dilutive financing.

Badar Khan: 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 just talked about last week. And we are engaged in a conversation with counterparties around similar sorts of financing, non-recourse project financing. And so those are things that can be done in combination with the DOE Loan Program Office. And then, Olga, do you want to just provide a little insight into the 30C?

Badar Khan: Again, as I said before.

Badar Khan: I think that the economics here are very attractive and will attract.

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

Olga Shevorenkova: And we are engaged in conversations with Counterparties.

Badar Khan: Around.

Badar Khan: Similar sorts of financing nonrecourse project financing and so those are things that can be done in combination with the direct loan program office loan.

Badar Khan: And then I'll go to you wanted to provide insights into Iot and maybe like a little add on about the daily alone to we're applying under title 17 that LPL program and Gabriel <unk> to just do it as urgency what kind of other companies did that in what quantity. They obtained I think it will give you a good feel for what we're looking for.

Olga Shevorenkova: Yeah, and maybe a little add-on about the DOE loan. 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.

Olga Shevorenkova: 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. 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.

Olga Shevorenkova: Well and on 30, roughly 35% to 40% of our portfolio last year and they see a qualifies we're working on.

Olga Shevorenkova: To aid in the <unk> transaction and sell our 'twenty to 'twenty three portfolio will be the first one of the first transactions. None of this math of this nature in the industry and suddenly we'll be the first one for you as 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 these types of portfolios. Then it is clear to us that the very robust market is emerging to be able to trade. This credits in the future on regular basis.

Gabriel J. Daoud: Okay. Okay. That's great. Very helpful, Badar and Olga. Thanks so much again.

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

Speaker Change: Thanks Keith.

Christopher J. Dendrinos: Your next question comes from the line of Chris Dendrinos from RBC Capital Markets. Your line is open.

Gabriel J. Daoud: Your next question comes from the line of Christian <unk> from RBC capital markets. Your line is open.

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

Christopher J. Dendrinos: Yes. Good morning, Thank you hi.

Christopher J. Dendrinos: I guess I wanted to kind of dial in a little bit into the operation side of things and maybe to start here.

Christopher J. Dendrinos: 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.

Christopher J. Dendrinos: I guess throughput growth going forward.

Christopher J. Dendrinos: I guess I wanted to kind of dial in a little bit into 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, you know, on the quarter was a bit lower on the kilowatt hours per day. Can you just kind of talk about the dynamics there? Is there any sort of seasonality going on? Or how should we kind of think about, I guess, throughput growth going forward?

Christopher J. Dendrinos: Yes, Chris that's exactly and it's seasonality where.

Christopher J. Dendrinos: 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.

Christopher J. Dendrinos: That's really at 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.

Badar Khan: Yeah, Chris, that's exactly it. It's seasonality where we've been growing so fast over the last couple of years, we haven't even seen it in our numbers, but we're finally seeing it. That's really it. 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.

Christopher J. Dendrinos: Got it. Thank you and then I guess I would say I think you mentioned some 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.

Christopher J. Dendrinos: Got it. Thank you. And then, I guess, you mentioned 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?

Speaker Change: Yes look we.

Christopher J. Dendrinos: As a company Chris we've been so focused on building a growth engine.

Badar Khan: Yeah, it's look, we, you know, as a company, Chris, we have been so focused on building a growth engine that can add, you know, very carefully selected stalls that generate we expect to generate very strong returns. That's the proprietary network plan and site selection process.

Christopher J. Dendrinos: That can add.

Badar Khan: 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 a point, where it's I think it's just humming super nicely, we shared I think.

Badar Khan: We've really refined that to a point where it's I think it's just humming super nicely. 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 conservative.

Badar Khan: 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.

Badar Khan:

Badar Khan: One that's.

Badar Khan: Conservative.

Badar Khan: 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. 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.

Badar Khan: We're really shifting our focus from not just building the growth engine, but to making it more efficient.

Badar Khan: 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.

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

Badar Khan: 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.

Badar Khan: We're just deploying the technology today, and those are things that allow us to have a better sense of sort of predictive maintenance and diagnostics around our equipment when 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. We're just bringing what exists in other sectors to our own sector.

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

Badar Khan: Things that allow us to have a better sense of the predictive maintenance diagnostics around our equipment, where theyre not performing as we would expect it'll be software in terms of handling customer calls.

Badar Khan: 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 in terms of expectations. We shared with you our sustaining G&A cost per store.

Badar Khan: In terms of expectations, we shared with you our sustaining G&A costs per stall in our webinar. And in fact, I showed that on one of the slides here, a fairly significant reduction over 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.

Badar Khan: We are on the webinar in fact, I'm sure that one of the slides here with 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 by around 20% run rate for Q4 versus Q4 last year.

Christopher J. Dendrinos: Got it. Okay. Thank you very much.

Speaker Change: Got it okay. Thank you very much.

Christopher J. Dendrinos: Yes.

Stephen Gengaro: Your next question comes from the line of Stephen Gengaro from Stiefel. Your line is open.

Christopher J. Dendrinos: Your next question comes from the line of Stephen <unk> from Stifel. Your line is open.

Stephen Gengaro: Thanks. Good morning, everybody.

Stephen Gengaro: Thank you and good morning, everybody.

Stephen Gengaro: I think two for me, the first: you had a 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. And it feels almost a little conservative versus kind of the path you're on right now. 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.

Stephen Gengaro: Yes.

Stephen Gengaro: I think Q2 from me.

Stephen Gengaro: The first.

Stephen Gengaro: You had a you had a good a good first quarter and you kind of reaffirmed your guidance for the year.

Stephen Gengaro: When we think about your 2025, you talked about EBITDA breakeven.

Stephen Gengaro: And it feels almost a little conservative versus kind of where the path you're on right. Now. 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.

Badar Khan: 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.

Stephen Gengaro: Okay.

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

Badar Khan: And so we just came out with our guidance for this year and also for EBITDA breakeven just to sort of seven or eight weeks ago. So we thought it was too early to make any changes to that I can tell you that with the change the competitive dynamic that we've just been talking about.

Badar Khan: As a for instance, we're in a conversation with many site hosts across the United States that were well along the path towards.

Badar Khan: I can tell you that with the change, the competitive dynamic that we've just been talking about, you know, we're in, 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.

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

Badar Khan: <unk> 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.

Badar Khan: 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 on the Q2 and Q3 calls.

Badar Khan: As I talked about before we've got a significant set of tailwind in terms of charge rates charged.

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

Badar Khan: Charter rates actually improved EV adoption, we hired all the 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.

Badar Khan: 2025 on this call, but perhaps we'll talk about 2025.

Badar Khan: Q2, and Q3 calls.

Stephen Gengaro: Great Now, thanks. Thanks. That's good, Keller. 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 800 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 even if you grew the stall count at a Is that is that fair?

Speaker Change: Great no. Thanks, Thanks, that's good color.

Stephen Gengaro: The other question I have and you sort of just answered it but.

Stephen Gengaro: When you were talking about the different financing options and you mentioned the ability to potentially accelerate growth beyond the eight to 900 stores per year.

Stephen Gengaro: That suggests to me that if you could do that.

Stephen Gengaro: There is plenty of room for.

Stephen Gengaro: 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.

Stephen Gengaro: At a higher rate is that is that fair.

Badar Khan: 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 that we've 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.

Keller: Thats exactly right Stephen we find that Theres about well first of all we've got about 50.

Badar Khan: 50 over 50 strategic relationships with site hosts across the country and.

Badar Khan: There are there's over 100000 sites that we've identified that we could potentially get after 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.

Badar Khan: Those are likely to be very attractive locations for us to get after and so yes, we I.

Badar Khan: And so, yeah, we, you know, I think when we, when it comes to capital allocation, we will, once we cover our costs, And we're Janet, which will be will do 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? UN economics would clearly suggest it's in everyone's interests to for the company to grow 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. Great.

Badar Khan: 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.

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

Badar Khan: 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.

Stephen Gengaro: Great, that's a great color. Thank you.

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

Stephen Gengaro: Yes.

Christopher Alan Pierce: Your next question comes from the line of Chris Pierce from Needham. Your line is open.

Stephen Gengaro: Your next question comes from the line of Chris <unk> from Needham Your line is open.

Christopher Alan Pierce: Hi Chris. Hey, good morning. Morning, everyone.

Badar Khan: 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 towards Level 3 because of customers demanding higher speed? 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 2 was sort of dominating the conversation, but it seems like over the past year or so, Level 3 has started to dominate the conversation, so I just want to kind of get your thoughts around that.

Christopher Alan Pierce: Hi, Chris Hey, good morning, good morning, everyone.

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

Badar Khan: Are there I know you guys identified tight and you want to drop your level three equipment in that side, but are you seeing an industry shift at all were people that had maybe considered level to say, it's a level two charging equivalent are now moving towards level three because the customers demanding higher speeds I'm just trying to get a sense of if you look at how people have thought about this industry is growing through.

Badar Khan: <unk> thousand 30 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.

Christopher Alan Pierce: 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 3 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 a little longer, maybe, but I did that because there's a tremendous tailwind here that benefits DC, so public DC fast charging.

Speaker Change: Yes, so good question, Chris and I think that.

Christopher Alan Pierce: Look I think the.

Christopher Alan Pierce: The sort of lag.

Christopher Alan Pierce: Landscape is kind of waking up to the potential for level three in a way that maybe didn't exist a few years ago.

Christopher Alan Pierce: 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.

Christopher Alan Pierce: The vision there is a tremendous tailwind here.

Christopher Alan Pierce: Benefits DC to public DC fast charging if charge rates improve and you can charge your vehicle at significantly faster times may be half the time, I think youre going to be more comfortable with public charging less reliant on charging at home and for site hosts to be able to have an offer.

Christopher Alan Pierce: If charge rates improve, and you can charge your vehicle at significantly faster times, maybe half the time, 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 have and offer that feature for their customers, which we know is something that customers value, I think 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.

Christopher Alan Pierce: That that feature for their customers, which we know is something that customers value I think it's I think it's only.

Christopher Alan Pierce: It's the 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.

Christopher Alan Pierce: 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 will likely prefer fast.

Christopher Alan Pierce: Customers without access to private driveways are more likely to be buying more affordable vehicles, and therefore more reliant on charging and likely will be will prefer faster charging.

Badar Khan: Okay. Okay.

Christopher Alan Pierce: Okay. Okay. Andy can you talk about demand based pricing is something kind of you guys make experiment with down the road can you talk about pricing in general is that something where there.

Christopher Alan Pierce: And you talk about demand-based pricing as something you guys might experiment with down the road. Can you talk about pricing in general? Is that something where, you know, 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 certain times of the day where there is pricing pressure on your network, or is this not something that you're seeing right now?

Christopher Alan Pierce: Is there really.

Christopher Alan Pierce: No price pressure that you're seeing given the rate of growth of evs, the lower rate of growth in charging equipment out there or is there are there certain times of the day were.

Christopher Alan Pierce: There is pricing pressure on your network or is this not something that youre seeing right now.

Badar Khan: Now, we have very different customer segments that are charging on our network. We have rideshare segments, so high-frequency, high-usage customers, and that's... And when you 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.

Christopher Alan Pierce: No.

Christopher Alan Pierce: We have very different customer segments.

Badar Khan: There are charging on our network.

Badar Khan: Rideshare segments of high frequency customers high usage customers and that's.

Badar Khan: 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 reliable and love to have more and we're expecting to target and have more.

Badar Khan: But as we think about pricing, there are 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 where there's less utilization on our network at earlier times; we call them early bird or off-peak rates. They tend to be lower rates, which frees up the locations for customers that are less frequent users and potentially less sensitive to price.

Badar Khan: But as we think about pricing theirs.

Badar Khan: Different different.

Badar Khan: Times of the day <unk> pricing will appeal to different customers. So we are shifting some of our <unk>.

Badar Khan: 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 locations for customers that are less frequent users and perhaps potentially less sensitive towards price.

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

Badar Khan: So that's the kind of work we're doing it's time based pricing location based pricing dynamic pricing is not.

Badar Khan: Genomic demand based pricing is not a new concept.

Badar Khan: And it's not something that we're considering we are now deploying it.

Badar Khan: 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'll deliver some fairly solid improvements to 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 partly or significantly driven by the leverage that exists in our cost of sale.

Badar Khan: So.

Badar Khan: Les ramp 5% of our network today has dynamic demand based pricing and we expect to roll that out over the course of this year.

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

Badar Khan: Margins from our charging business have gone.

Badar Khan: 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.

Christopher Alan Pierce: Okay. And if I could just ask one last question for Olga,

Christopher Alan Pierce: Okay.

Speaker Change: Okay, and if I could just ask one last question for AGA.

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

Christopher Alan Pierce: Pretty dramatically.

Olga Shevorenkova: We're talking about smaller numbers, but what is the margin profile of this business is that.

Speaker Change: 10-K talks about a big software deal revenues are we talking 70, 580% gross margin that type of business and that is providing a gross margin uplift as well or am I not thinking about that the right way.

Olga Shevorenkova: I'll give you want to take that question, yeah, some even lesser so.

Olga Shevorenkova: Most of that revenue is coming from block set.

Christopher Alan Pierce: Yelp of Chardan company, which we bought roughly three years ago, but it also has all behind defence fleet contracts, which is a couple of them.

Christopher Alan Pierce: 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, 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?

Christopher Alan Pierce: Which we've talked about on Brian on prior earnings calls so the margin profile is a mixture of the two and of course any software driven revenue, including <unk> will be very high margin. So we'll look at any size 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 Nick Thank you.

Christopher Alan Pierce: Which is behind the fence has a it has a more extended like margin profile, which will be in the low double digit territory.

Christopher Alan Pierce: There was a bit of a game of a revenue mix happening here.

Christopher Alan Pierce: Considering that it's a very small it's still relatively small revenue contribution.

Christopher Alan Pierce: Margin trends have been played by into play or expand in the court charging business rather than answer that.

Speaker Change: Okay perfect. Thank you.

Speaker Change: Thanks, Chris.

Olga Shevorenkova: Olga, do you want to take that question? Yeah, sorry, I'm using my cell.

Christopher Alan Pierce: Your next question comes from the line of Andrew Shepherd from Cantor Fitzgerald. Your line is open.

Olga Shevorenkova: Yeah, so most of that revenue is coming from PlugShare. It's the Yelp of Georgian companies, which we bought roughly three years ago.

Olga Shevorenkova: Hi, Andrew Hey, everyone. Good morning, and congratulations on the quarter and thanks for taking our questions.

Olga Shevorenkova: 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. And of course, any software-driven revenue, including PlugShare, will be very high-margin. So look at any SaaS type company, and you'll get an idea what kind of growth 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 the low double digit territory.

Olga Shevorenkova: Yes. Thanks, I just wanted to maybe come back to the the utilization rates.

Olga Shevorenkova: That seems to be growing again at a very rapid pace, which is great.

Speaker Change: I'm just wondering.

Speaker Change: 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.

Olga Shevorenkova: So there is a bit of a game of revenue mix happening here, 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

Olga Shevorenkova: Your next question comes from the line of Andres Sheppard from Kent or Fitzgerald. Your line is open.

Andres Juan Sheppard: At this rate.

Andres Juan Sheppard: Should we be thinking of that.

Andres Juan Sheppard: Gigawatt hour to be north of.

Andres Juan Sheppard: 200, or 215 for the year.

Andres Juan Sheppard: In other words, how should we think about the network throughput throughout the rest of this year. Thank you.

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

Andres Juan Sheppard: But as you can see in the <unk>.

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

Andres Juan Sheppard: Andres. Hey everyone, good morning and congratulations on the quarter and thanks for taking our questions. I just wanted to maybe come back to the utilization rate, you know, that seems to be growing again at a very rapid pace, which is great. I'm just wondering, you know.

Andres Juan Sheppard: Utilization of the top 15% of our network is already at 41%.

Andres Juan Sheppard: 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 and so.

Andres Juan Sheppard: That's.

Andres Juan Sheppard: 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 the Q.

Andres Juan Sheppard: Q in our revenue formula.

Andres Juan Sheppard: But maybe I'll go you want to just.

Andres Juan Sheppard: I'll provide some thoughts for 2024 specific yes.

Andres Juan Sheppard: 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, you know, 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.

Speaker Change: As you correctly mentioned, we do not guide to two gigawatt hours, but maybe I can give you a little bit of a.

Andres Juan Sheppard: Has to get to there yourself. So we gave color during our last call, we expect extended revenue to be roughly 35%.

Badar Khan: Yeah, I mean, look, I'll let me just, I'll ask, I'll just give you some thoughts about 2024 specifically, but as you can see in the Compalegate Economics slide, and we talked a bit 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.

Badar Khan: Our revenue this year.

Badar Khan: At the point of the range and the range of Qs planted 17. So if you subtract that then the rest of the variability comes from steel.

Badar Khan: Let's prevailing uncertain sales EV sales this year.

Badar Khan: The ways it come from uncertainty around the final number.

Badar Khan: 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.

Badar Khan: We don't expect anything more than that to get double-digit returns. And so, you know, 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.

Badar Khan: 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 70. So if you subtract that, right, then the rest of the variability comes from.

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

Badar Khan: Safe to assume maybe a higher.

Badar Khan: Some more seasonality in Q4 since thats, usually the strongest quarter.

Badar Khan: Im just trying to figure out like should we.

Badar Khan: Should it be a smooth gradual number quarter over quarter or should we account for some seasonality throughout the year.

Olga Shevorenkova: A prevailing uncertainty of EV sales this year, said as a waste; it comes from uncertainty on a final number or this throughput number. 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.

Badar Khan: Yes.

Badar Khan: That smooth.

Olga Shevorenkova: Again. It is sales is something we don't have control and.

Andres Juan Sheppard: Okay, I guess that's helpful. But then it's safe to assume maybe a higher level of seasonality in Q4, since that's usually the strongest EV quarter. I'm just trying to figure out, like, should we just have a smooth, gradual number, quarter over quarter, or should we account for some seasonality throughout the year?

Olga Shevorenkova: They're all kind of understand exactly how it will play out for the rest of the year would have an expectation that it will be slow, but if you think about seasonality in the Jive N patents, then thereof transportation statistics actually publishes.

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

Olga Shevorenkova: Publicly available data and you could see how they're driving patterns play out between the quarters by using that information I think it will be up to a quite helpful.

Andres Juan Sheppard: Okay, thanks. We'll take a look at that. Oh, yeah, go ahead.

Olga Shevorenkova: Okay.

Speaker Change: Let's take a look at that.

Speaker Change: Go ahead, Andrew just as a reminder.

Badar Khan: Yeah, 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 quarters at this point. So it's new sales, but it's also share of DC fast charging, ride share growth, more affordable vehicles, leading to customers who don't have private driveways charging on public infrastructure. So our revenue is a function of all of these things combined, and we expect to see it grow sequentially over the year.

Badar Khan: EV sales, obviously is a driver of revenue.

Badar Khan: But our throughput grew four times faster than the growth of EV vio quarter over quarter, which we've talked about for a for a couple of several quarters at this point so.

Badar Khan: New sales, but it's also.

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

Badar Khan: 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 it grow sequentially over the quarter over the year.

Andres Juan Sheppard: Yeah, and I think it's also a result of the utilization rates of the average utilization rates per charge continuing to increase, as you mentioned earlier. Okay, maybe just one last question. And by the way, Olga, sorry; I wish you all the best in your future endeavors. Thank you. We'll certainly miss you. Maybe one last question for you, I guess, is just on the liquidity. Can you 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.

Speaker Change: Yeah, and I think it's also a result of the utilization rates of the average utilization rates per charger, which is continuing to increase right, which you mentioned earlier.

Andres Juan Sheppard: Yes.

Speaker Change: Okay, maybe just one last question and by the way I'll again, sorry, I wish you all the best in Europe.

Speaker Change: Future endeavors.

Speaker Change: We'll certainly Miss you.

Andres Juan Sheppard: Maybe one last question for you I guess is just on the liquidity.

Andres Juan Sheppard: Can you just remind us with the let's call it a $176 million in liquidity as of Q1.

Andres Juan Sheppard: Excluding any navy funding or any external funding what is the expected run rate with that liquidity.

Andres Juan Sheppard: The liquidity on hand is that still into well into 2025 or what what's the message there. Thank you.

Andres Juan Sheppard: Correct.

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

Speaker Change: However, I'm not excluding any grants, which we will be collecting it's not necessarily NAV is a big driver with Elizabeth 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 about <unk>.

Andres Juan Sheppard: And in Thailand, So that is baked into all of our central planning and budgets and whatnot. So when we talk about.

Speaker Change: About cash that it certainly included because that is part of the business model.

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

Speaker Change: Thanks, Amit.

Andres Juan Sheppard: Your next question comes from the line of Bill Peterson from Jpmorgan. Your line is open.

Speaker Change: Yeah, Hi, good morning, Hi, good morning, Thanks for taking the questions.

Andres Juan Sheppard: Wanted to ask about reliability and uptime, how are the how are the trends I guess proceeding on their network.

Andres Juan Sheppard: No way to quantify the operational benefits from our renewed program that you have.

Andres Juan Sheppard: And sort of employee last year, but.

Andres Juan Sheppard: Can you quantify what you've seen thus far.

Speaker Change: Yes, we see great improvement and again bill.

Andres Juan Sheppard: As we think about the customer experience uptime is the component of the experience we have.

Andres Juan Sheppard: He led many asset based businesses in my career uptime as a component of the.

Andres Juan Sheppard: The customer experience, which continues to improve.

Andres Juan Sheppard: But so does.

Andres Juan Sheppard: Shoring up 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 <unk>.

Andres Juan Sheppard: Enormous much feedback with customer favorite faster sites.

Andres Juan Sheppard: We're prioritizing this week that the kilowatt charges.

Andres Juan Sheppard: Prime is certainly improving.

Andres Juan Sheppard: Some of the software update that I talked about earlier in terms of predictive maintenance and.

Andres Juan Sheppard: So the diagnostic.

Andres Juan Sheppard: Diagnostic support are all designed towards <unk>.

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

Andres Juan Sheppard: <unk> costs in the business.

Speaker Change: Feel pretty good about it.

Andres Juan Sheppard: Okay. Thanks for that and then wanted to talk about gross margin trajectory I guess taken into kind of your expectations around utilization network throughput how should we think about the gross margin sectary based off of what you talked about earlier time of gaining charging price increases, but I guess I was potential.

Andres Juan Sheppard: I guess energy right.

Andres Juan Sheppard: Increases or new someday charges.

Andres Juan Sheppard: And then remind us is there any seasonality for that in terms of how that would flow through on the gross margin line.

Andres Juan Sheppard: Yeah.

Andres Juan Sheppard: Yeah, so the gross margin.

Andres Juan Sheppard: We reported over 30% for the Q1, however in my prepared remarks, I mentioned that we had it two and a half nieland of Nissan breakage recognition, which is typical for Q1 and it does inflate inflate the margin.

Andres Juan Sheppard: Adjusted the adjusted gross margin is in the high planted and the expectation for the rest of the year is mid to high <unk>. So there is this is analysis does that number because were CNI customer of <unk> and utilities tend to have sunland, Windsor Terrace, and Sandler and summer is defined in a variety of different ways presence on Youtube.

Andres Juan Sheppard: But it tends to be around the real Sandler Brownsville winter and summer tenants are a little higher than Windsor in some cases actually there are quite a bit higher than winter. So you should expect to see a little lower margin over the summer period, taking back by Q4 to the winter time.

Andres Juan Sheppard: And maybe bill if I could just make sure that we when you talk about gross margin we are talking with.

Andres Juan Sheppard: August talking about the entire business, both are charging business as well as our the non charging revenue we have.

Andres Juan Sheppard: Provided disclosure for you to see for yourself margins in our charging business specifically.

Andres Juan Sheppard: And they were 15 roughly 15 <unk>.

Andres Juan Sheppard: <unk>.

Andres Juan Sheppard: Last year and.

Andres Juan Sheppard: 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.

Andres Juan Sheppard: The charging business itself.

Speaker Change: And so it wasn't Amanda clarify my answer as well.

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

Speaker Change: Okay. Thanks Holger. Thanks.

Andres Juan Sheppard: <unk>.

Andres Juan Sheppard: Yes.

Olga Shevorenkova: Correct. We're confirming that still the message.

Andres Juan Sheppard: 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.

Olga Shevorenkova: However, I'm not excluding any grants, which we will be collecting. It's not necessarily Navy 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. And 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 model.

Andres Juan Sheppard: Okay, got it. Very helpful. Thanks again. Congratulations on the quarter. I'll pass it on.

Speaker Change: Well look thank you everyone for the call we had a great another great and record quarter. 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.

William Chapman Peterson: Your next question comes from the line of Bill Peterson from J.P. Morgan. Your line is open.

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

William Chapman Peterson: The change in the competitive landscape that we've that we've talked about presents even greater opportunities for <unk> to accelerate growth and deliver even stronger returns.

William Chapman Peterson: The advantage of the multiple sources of competitive advantage that we now have and I look forward to providing updates.

William Chapman Peterson: On these competitive advantages in our priorities and progress on subsequent calls thanks very much everyone.

Badar Khan: 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?

Badar Khan: Yeah, we see great improvement. And again, Bill, 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 that were prioritized in a 350 kilowatt charger.

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

Badar Khan: 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 towards improving uptime even more over the course of this year, which leads to a reduction in truckloads, customer calls, and costs in the business. So we're pretty good about that.

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

William Chapman Peterson: Okay, thanks for that. And then we're gonna try to talk about gross margin trajectory, I guess taking into account your expectations around utilization, you know, network throughput. How should we think about the gross margin trajectory based on 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?

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 adjusted growth margin is in the high 20s, and the expectation for the rest of the year is mid to high 20s.

Olga Shevorenkova: 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. And summer and winter are 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. So you should expect to see a little lower margin over the summer period, but it should stick back up by Q4 for the wintertime.

Olga Shevorenkova: And maybe Bill, if I could just make sure that we, when you talk about gross margin, we are talking, we're all just talking about the entire business, both our 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 specifically, and they were 15%, roughly 15% last year, and it's right in 2022, up to, up to about 28% in 2023, and this, this first quarter of 2024, they were in the mid to high 30s. The Charging Business Itself.

Badar Khan: Yeah, and so let me maybe clarify my answer as well. When I quoted the absolute numbers, when I talked about the dynamics, it's related to the charging business. When we talk about the dynamics and expanding 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.

William Chapman Peterson: Okay, thanks, Olga, and thanks, Badar.

Olga Shevorenkova: [music].

Operator: 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.

Badar Khan: Great. Well, look, thank you, everyone, for the call.

Badar Khan: We had another great and record quarter. As you heard, we have very compelling new economics and operating leverage that will drive very strongly EBITDA in the near term and a growth engine that is generating strong returns for our investors. 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 subsidies. Thanks very much, everyone.