Q1 2025 ChargePoint Holdings Inc Earnings Call

Krista: Ladies and gentlemen, good afternoon. My name is Krista, and I'll be your conference operator for today's call. At this time, I would like to welcome everyone to the ChargePoint First Quarter Fiscal 2025 Earnings Conference Call-In Webcast. All participants' lines have been placed in a listen-only mode to prevent any background noise.

Ladies and gentlemen, good afternoon. My name is Krista and I'll be your conference operator for today's call at this time I would like to welcome everyone to the charge 0.1st quarter fiscal 2025 earnings conference call and webcast. All participants lines have been placed in a listen only mode.

Good to prevent any background noise. After the Speakers' remarks, there'll be a question and answer session.

Krista: After the speaker's remarks, there will be a question-and-answer session. I would now like to turn the call over to Patrick Hamer, ChargePoint's Vice President of Capital Markets and Investor Relations. Patrick, please go ahead.

Patrick: I would now like to turn the call over to Patrick Hammer charged points, Vice President of capital markets and Investor Relations. Patrick. Please go ahead.

Patrick Hamer: Good afternoon, and thank you for joining us on today's conference call to discuss ChargePoint's first quarter fiscal 2025 earnings results. This call is being webcast and can be accessed on the investors section of our website at investors.chargepoint.com. With me on today's call are Rick Wilmer, our Chief Executive Officer, and Mansi Khetani, our Interim Chief Financial Officer.

Patrick Hamer: Good afternoon, and thank you for joining us on today's conference call to discuss charge points first quarter fiscal 2025 earnings results. This call is being webcast and can be accessed on the investors section of our website at investors Dot chart Dot com.

Speaker Change: With me on today's call are Rick Wilmar, our Chief Executive Officer, and Marcy Kutani, our interim Chief Financial Officer. This afternoon, we issued our press release announcing results for the quarter ended April 32024, which can also be found on our website.

Patrick Hamer: This afternoon, we issued our press release announcing results for the quarter ended April 30th, 2024, which can also be found on our website. We'd like to remind you that during the conference call, management will be making forward-looking statements, including our outlook for our second quarter of fiscal 2025. These forward-looking statements involve risks and uncertainties, many of which are beyond our control and could cause actual results to differ materially from our expectations.

Speaker Change: We'd like to remind you that during the conference call management will be making forward looking statements, including our outlook for our second quarter of fiscal 2025.

Speaker Change: These forward looking statements involve risks and uncertainties many of which are beyond our control and could cause actual results to differ materially from our expectations.

Patrick Hamer: These forward-looking statements apply as of today, and we undertake no obligation to update these statements after the call. For a more detailed description of certain factors that could cause actual results to differ, please refer to our Form 10-K filed with the SEC on April 1st, 2024, and our earnings release posted today on our website and filed with the SEC on Form 8-K. Also, please note that we use certain non-GAAP financial measures on this call, which we reconciled to GAAP in our earnings release and for certain historical periods in the investor presentation posted on And finally, we'll be posting the transcript of this call on our investor relations website under the quarterly results section. And with that, I'll turn it over to Rick.

Speaker Change: These forward looking statements apply as of today and we undertake no obligation to update these statements. After the call for a more detailed description of certain factors that could cause actual results to differ please refer to our Form 10-K filed with the SEC on April one 2024, and our earnings release posted today on our website and <unk>.

Filled with the SEC on form 8-K.

Speaker Change: Also please note that we use certain non-GAAP financial measures on this call, which we've reconciled to GAAP in our earnings release and for certain historical periods and the investor presentation posted on the investors section of our website.

Speaker Change: And finally, we will be posting the transcript of this call to our Investor Relations website under the quarterly results section and with that I'll turn it over to Rick.

Richard Wilmer: Good afternoon, everyone, and thank you for taking the time to learn more about ChargePoint's first quarter fiscal 2025 results. Today we are going to recap the first quarter's financials, some recent highlights, and discuss the state of the market. We will update you on our four areas of strategic focus, key accomplishments, and new partnerships we have formed. Additionally, our interim CFO, Mansi Khetani, will give Q2 guidance in her portion of the call. I want to start by emphasizing that when we say we will do something, we fully intend to do it. My approach as CEO is to lead by example through clarity and accountability, provide regular updates, and drive the organization to deliver on our commitments, not our intentions.

Richard Wilmer: Good afternoon, everyone and thank you for taking the time to learn more about charge points first quarter fiscal 2025 results.

Richard Wilmer: Today, we are going to recap the first quarter's financials. Some recent highlights and discuss the state of the market.

Richard Wilmer: We will update you on our four areas of strategic focus key accomplishments and new partnerships, we have farmer.

Speaker Change: Our interim CFO Mazzuca, Tony will give Q2 guidance in her portion of the call.

Speaker Change: I wanted to start by emphasizing that when we say we will do something we fully intend to do it.

Richard Wilmer: That said, here are the top line financial results for the first quarter. In Q1, we delivered what we targeted in our last earnings call. ChargePoint's revenue for the first quarter was $107 million, which is above the midpoint of our guidance rank. Non-GAAP gross margin was up to 24%, and I am pleased that our non-GAAP operating expenses came in at $66 million, which is down $8.4 million from last quarter and a proof point of the financial prudence I discussed in the last earnings call.

Speaker Change: The approach as CEO is to lead by example through clarity and accountability provide regular updates and drive the organization to deliver on our commitments not our intentions that said here are the top line financial results for the first quarter.

Speaker Change: In Q1, we delivered what we targeted in our last earnings call Charles points revenue for the first quarter was $107 million, which is above the midpoint of our guidance range.

Speaker Change: non-GAAP gross margin was up to 24% and I am pleased that our non-GAAP operating expenses came in at $66 million, which is down $8 4 million from last quarter and a proof point of the financial Prudence I discussed in the last earnings call.

Richard Wilmer: Our cash management is a priority, and for the second quarter in a row, we used significantly less cash than forecast. Our non-GAAP-adjusted EBITDA loss for the quarter was down to $36 million, which is ahead of plan.

Speaker Change: Our cash management is a priority and for the second quarter in a row, we use significantly less cash than forecasted our non-GAAP adjusted EBIT loss for the quarter was down to $36 million, which is ahead of plan.

Richard Wilmer: While these results were positive, they could have been better. There were two areas where we saw opportunity. First, we had eight figures worth of deals postponed to later quarters, primarily because of construction and infrastructure delays.

Speaker Change: While these results were positive they could have been better.

Speaker Change: Were two areas, where we saw opportunity for.

First we have eight figures worth of deals postponed to later quarters, primarily because of construction and infrastructure delays.

Richard Wilmer: Second, our inventory was up 13% as we stand behind our valuable manufacturing partners and continue to support our commitment. We chose to take the inventory and be a reliable partner over working down the inventory balance. Our inventory continues to gradually normalize, which we expect will take the rest of the year. Regarding our goal of becoming adjusted EBITDA positive in Q4, as I said at the beginning of this call, we will drive the organization to deliver on this and our other goals. We have a clear plan to get there, and we exceeded our internal goal for Q1 EBITDA. Some key drivers are as follows.

Speaker Change: Second our inventory was up 13% as we stand behind our valuable manufacturing partners and continuing to support our commitments.

Speaker Change: Chose to take the inventory and be a reliable partner over working down the inventory balance our inventory continues to gradually normalize, which we expect will take the rest of the year.

Speaker Change: Regarding our goal of becoming adjusted EBITDA positive in Q4.

Speaker Change: As I said at the beginning of this call we will drive the organization to deliver on this and our other goals we have a clear plan to get there and we exceeded our internal goal for Q1 EBITDA. Some key drivers are as follows.

Richard Wilmer: Large deals that have been booked and will ship later this year. The deals will be announced by our customers at the time they find best for their respective businesses. There are multiple initiatives underway that will have a positive impact on COGS, OPEX, and margin-rich top-line contributions. These initiatives are specific and actionable and are embedded in our quarterly objectives. I will touch upon some of them in this call.

Speaker Change: Large deals that have been booked and will ship later this year.

Speaker Change: The deals will be announced by our customers at the time, they find best for their respective businesses.

Speaker Change: There are multiple initiatives underway that will have a positive impact on Cogs, opex and margin rich topline contribution.

Speaker Change: These initiatives are specific and actionable and are embedded in our quarterly objectives I will touch upon some of them in this call.

Richard Wilmer: As demonstrated in Q1, we will continue to reduce OpEx through operational rigor. We know you rely heavily on our past performance as an indicator of our future results, but I must remind you that we are a new leadership team with a new strategy and a serious commitment to operational excellence. As our Q1 results demonstrate, we are implementing positive changes that could not have been extrapolated based on our past results. Moving to the state of the market, it may feel like there is a lot to discuss this quarter. And there has been a lot of media coverage in the sector, but the story remains the same.

Speaker Change: As demonstrated in Q1, we will continue to reduce opex through operational rigor.

Speaker Change: We know you rely heavily on our past performance is an indicator of our future results, but I must remind you that we are a new leadership team with a new strategy and a serious commitment to operational excellence.

Speaker Change: As our Q1 results demonstrate we are implementing positive changes that could not have been extrapolated based on our past results.

Richard Wilmer: EVs are selling, and people need the infrastructure to charge them. Various factors cause micro-movements within this macro-trendline, but the trendline continues upward. According to Bloomberg, non-Tesla ED sales were up 13% compared to the first quarter of last year. In fact, EV sales at six of the 10 best selling OEMs increased 50% or more in Q1. As a reminder, while some OEMs are reducing projections for EV sales volumes, R&D continues at major global OEMs, including Honda's recent announcement to spend $65 billion electrifying its lineup over the next 10 years.

Speaker Change: Moving to the state of the market. It may feel like there is a lot to discuss this quarter and there has been a lot of media coverage in this sector, but the story remains the same evs are selling and people need the infrastructure to charge them.

Speaker Change: Various factors cause micro movements within this macro trend line, but the trend line continues upward.

Speaker Change: According to Bloomberg non Tesla EDI sales were up 13% compared to the first quarter of last year and.

Speaker Change: In fact, EV sales at six of the 10, best selling Oems increased 50% or more in Q1.

Speaker Change: As a reminder, also Oems are reducing projections for EV sales volumes R&D continues at major global Oems, including partners recent announcements to spend 65 billion electrifying their lineup over the next 10 years.

Richard Wilmer: Per a report from the International Energy Agency titled Global EV Outlook 2024, From 2022 to 2023, investment announcements in EV and battery manufacturing totaled almost $500 billion, of which 40% has been committed. Finally, to give commentary about plug-in hybrids scaling faster than pure EVs, we view this as beneficial for ChargePoint because a plug-in hybrid is a natural stepping stone toward full EV, and plug-in hybrids

Speaker Change: Per our report from the International Energy agency titled Global EV outlook 2024.

Speaker Change: From 2022 to 2023 investment announcements in EV and battery manufacturing totaled almost $500 billion of which 40% has been committed.

Speaker Change: Finally to give commentary about plug in hybrid scaling faster than pure Evs, we view this as beneficial for charge points.

Speaker Change: Plug in hybrid is a natural stepping stone towards full EV and plug in hybrids required charging.

Richard Wilmer: Plug-in hybrid buyers are prospective home charger buyers, and their adoption is putting utilization pressure on commercial and public chargers. We delivered nearly 4 million PHEV charging sessions at workplaces in 2023. If it has a plug, it is supporting our business.

Speaker Change: Plug in hybrid buyers, our perspective home charger buyers and their adoption is putting utilization pressure on commercial and public Chargers.

Speaker Change: We delivered nearly $4 million ph EV charging sessions at workplaces in 2023.

Speaker Change: If it has a plug in is supporting our business.

Richard Wilmer: The bulk of what customers and investors are reading summarizes the demand curve for electric vehicles, not demand for chargers. Against Q1's micro-movements on the macro trend line, utilization pressure on the ChargePoint network, which we believe is a key indicator of charger demand, not vehicle demand, has never been higher. In Q1, we saw commercial utilization outpace new charger installation by more than 20%. This has been building for several quarters in a row, which indicates the need for incremental infrastructure to follow. To communicate this pressure in terms of vehicle adoption, in 2016, there were seven electric cars for each public charging point.

Speaker Change: The bulk of what customers and investors are reading summarizes the demand curve for electric vehicles not demand for Chargers.

Speaker Change: <unk> Q1's micro movements on the macro trend line utilization pressure on the charge point network, which we believe is a key indicator of charger demand not vehicle demand has never been higher.

Speaker Change: In Q1, we saw commercial utilization outpaced new charger installation by more than 20%.

Speaker Change: This has been building several quarters in a row, which indicates the need for incremental infrastructure to follow.

Speaker Change: To communicate this pressure in terms of vehicle adoption in 2016, there were seven electric cars for each public charging points.

Richard Wilmer: Today there are more than 20 EVs per public charging point. A new trend we are keeping an eye on is quite intriguing: growing site host sentiment that EV adoption has reached critical mass, and they are putting in charging stations regardless of current or future EV sales pace. In other words, we believe the correlation between passenger EV sales and charger demand is dissipating.

Speaker Change: Today, there are more than 20 evs per public charging points.

Speaker Change: A new trend we are keeping an eye on is quite intriguing.

Growing site host sentiment that EV adoption has reached critical mass.

Speaker Change: And they are putting in charging regardless of current or future EV sales pace in other words, we believe the correlation between passenger EV sales and charger demand is disconnecting we.

Richard Wilmer: We will continue to monitor this with interest. What has moved from a trend to the norm is hardware and software disaggregation among our largest existing and prospective customers. It is becoming clear that the industry's leaders will supply world-class software to support an entire hardware plus software solution, regardless of who supplies the hardware. In North America and Europe, we see continued government support for infrastructure build-out.

Speaker Change: We will continue to monitor this with interest.

Speaker Change: It's moved from a trend to the norm is hardware and software disaggregation, among our largest existing and prospective customers.

Speaker Change: <unk> clear that the industry's leaders will supply world class software to support an entire hardware plus software solution, regardless of who supplies the hardware.

Speaker Change: In North America, and Europe, we see continued government support for infrastructure build out.

Richard Wilmer: Starting with the U.S. National Electric Vehicle Infrastructure Program, results are going well for ChargePoint. As of today, and inclusive of the proposed awards in California announced earlier this week, ChargePoint's customers have been successful in winning more than 120 individual Nevisite awards, totaling roughly $71 million in grant opportunities. As the enabler of EV charging for entities who deploy NEBI funding, we support NEBI grant applications but aren't necessarily named as the awardee by the state agency.

Speaker Change: Starting with the U S National Electric vehicle infrastructure program reserves are going well for charge point as of today and inclusive of the proposed award in California announced earlier this week charge points customers have been successful in winning more than 120 individuals let me say towards <unk>.

Speaker Change: Totally roughly $71 million in grant opportunities.

Speaker Change: As the enabler of EV charging for entities, who deploy levy funding, we support and heavy grid applications, but arent necessarily named as the awardee by the state agency.

Richard Wilmer: To date, about 30 state DOTs have issued competitive NEBI RFPs, and around 20 states have announced awards. We continue to support our customers in pursuit of NEBI grants that haven't opened their programs yet, as well as those that are on their second or third round of funding. In the EU, a fear, the government's alternative fuel infrastructure regulation went into effect on April 13.

Speaker Change: To date about 30 state Dot's have issued competitive Navy Rfps and around 20 States have announced awards, we continue to support our customers in pursuit of Navy grants that haven't opened their programs yet as well as those that are on their second or third round of funding.

Speaker Change: In the EU, our fear the government's alternative fuel infrastructure regulation went into effect on April 13.

Richard Wilmer: While not an incentive program, FEAR sets targets for EV charging deployment and will encourage wider EV adoption. It will do so by setting standard requirements for charger hardware and software functions across the entire European Union. Not only was ChargePoint prepared to ensure our chargers are AFEAR compliant, but we helped establish some of the parameters directly with the European Union. Next, I would like to give you an update on our strategic priorities.

Speaker Change: While not an incentive program a fear sets targets for EV charging deployment and we will encourage wider EV adoption.

Speaker Change: It will do so by setting standard requirements for <unk> hardware and software functions across the entire European Union.

Speaker Change: Not only was charged point prepared to ensure our charters are a pure compliant we hope to establish some of the parameters directly with the European Union.

Next I would like to give you an update on our strategic priorities.

Richard Wilmer: As a reminder, last quarter I introduced our new corporate strategy to you, which is summarized by the four cornerstones of prioritizing our open modular software platform, revamping our approach to hardware development, delivering world-class driver experience, and Operational Excellence. For each cornerstone, I will now relay the demonstrable progress I promised last quarter. In terms of software, it has been a busy quarter. We announced the latest enhancements to our fleet software platform, which include home charging reimbursement for company car drivers, commonly referred to as take-home fleets. Transit Vehicle Preconditioning and the substantially enhanced UI that is currently in its pilot phase.

Speaker Change: As a reminder, last quarter I introduced our new corporate strategy to you.

Speaker Change: Which is summarized by the four cornerstones of prioritizing our open modular software platform.

Speaker Change: Revamping our approach to hardware development.

Speaker Change: Delivering world class driver experience.

Speaker Change: And operational excellence.

Richard Wilmer: Most importantly, we made great progress opening our software up to third-party hardware in the USA. We had a good head start on this thanks to our existing work in Europe. ChargePoint's BeEnergized software, which we sell in Europe to manage entire charging networks, has provided industry-leading experience managing mixed hardware. Look for our first hardware OEM announcement in the coming week. In Q4 of fiscal 2024, we received FedRAMP certification of our software, which, as mentioned in our last earnings call, enables us to sell to the U.S. federal government. I am pleased to say that this certification is paying off. We booked seven figures of FedRAMP required revenue in our very first quarter, including a sizable deal with the U.S. Navy.

Speaker Change: For each cornerstone I will now relay the demonstrable progress I promised last quarter.

Speaker Change: In terms of software it has been a busy quarter we.

Speaker Change: We announced the latest enhancements to our fleet software platform, which include home charging reimbursement for company car drivers, commonly referred to as take home fleets Tran.

Speaker Change: Transit vehicle pre conditioning and substantially enhanced UI that is currently in its pilot phase.

Speaker Change: Most importantly, we made great progress opening our software up to third party hardware in the USA.

Speaker Change: We had a good head start on this thanks to our existing work in Europe charge points be enterprise software, which we sell in Europe to manage entire charging networks is to provide an industry leading experience managing mixed hardware.

Speaker Change: Look for our first hardware OEM announcements in the coming weeks.

Speaker Change: In Q4 of fiscal 2024, we received fed ramp certification of our software.

Speaker Change: Which as mentioned in our last earnings call enable us to sell to the U S. Federal government I am pleased to say that this certification is paying off.

Speaker Change: <unk> seven figures of fed ramp required revenue and our very first quarter, including a sizeable deal with the U S. Navy.

Richard Wilmer: Our new approach to the design and manufacturing of hardware is also making a difference. Last quarter, we announced our partnership with Akville Polytech Incorporated for future hardware, and in the fourth quarter, we began actively working on our first project together. As a reminder, this relationship will bring our products to market faster and at higher margins. We continue to develop this strategy, and today, I am delighted to announce a second hardware co-development partnership.

Speaker Change: Our new approach to the design and manufacturing hardware is also making a difference last quarter, we announced our partnership with OXXO polytech incorporated or future hardware and in the fourth quarter. We began actively working on our first project together.

Speaker Change: As a reminder, this relationship will bring our products to market faster and at higher margins.

Speaker Change: We continue to develop this strategy and today I am delighted to announce a second hardware co development partnership we.

Richard Wilmer: We have signed an agreement with Wistron New Web, commonly known as WNC, to work on a set of future hardware projects, and we look forward to a great working relationship with them. To recap our latest hardware news, we showed our upcoming megawatt charging system at the recent ACT Fleet Exposition. Designed for trucking, marine, and aviation applications, this is the most powerful charger we will offer, capable of 1.2 megawatts at launch and multi-megawatt charging in the medium-term future.

Speaker Change: We have signed an agreement with with strong new web commonly known as WMC to work on a set of future hardware projects and we look forward to a great working relationship with them.

Speaker Change: To recap our latest hardware news, we showed our upcoming megawatt charging system at the recent Act fleet Exposition.

Speaker Change: Designed for trucking Marine and aviation applications. This is the most powerful charger, we will offer people a one two megawatts at launch and multi megawatt charging in the medium term future.

Richard Wilmer: To give you an idea of how incredibly powerful this system is, our LaunchSpec system can power more than 1,000 residential homes through a single connector. This upcoming connector protocol eliminates a key barrier to the electrification of large-scale trucking, which in turn has the potential to reduce or eliminate the 400 plus million metric tons of greenhouse gases emitted by that segment.

Speaker Change: To give an idea of how incredibly powerful this system is our launch spec system can power more than a thousand residential homes through a single connector.

Speaker Change: This upcoming connector protocol eliminates a key barrier to the electrification of large scale trucking, which in turn has the potential to reduce or eliminate the 400 plus million metric tons of greenhouse gases emitted by that segment.

Richard Wilmer: As we have said before, what is good for our business is also good for the environment. Our strategic decision to focus on a world-class driver experience has delivered a wonderful solution for our newest partnership. We have established a relationship with Airbnb to increase the availability of EV charging at Airbnb listings across the USA. To accomplish this, we created a novel solution for Airbnb hosts encompassing the ChargePoint HomeFlex residential charger, installation, software, and support services.

Speaker Change: As we have said before what is good for our business and it's also good for the environment.

Speaker Change: Our strategic decision to focus on a world class driver experience has delivered a wonderful solution for our newest partnership.

Speaker Change: We have established a relationship with Airbnb to increase the availability of EV charging and Airbnb listings across the USA too.

Speaker Change: To accomplish this we created a novel solution for Airbnb hosts encompassing the charge point home flex residential charger installation software and support services for.

Richard Wilmer: For drivers, this will guarantee a charge where they are staying, a critical need for EV drivers on a road trip and one not always accomplished at a hotel. Better yet, the world-class experience extends to the Airbnb host. We make their adoption of charging as an amenity near seamless. Once they answer three simple questions on our website, they get a quote, including installation costs, and we can implement charging in as little as two weeks as a turnkey solution.

Speaker Change: For drivers this will guarantee a charge where they are staying a critical need for EV drivers on a road trip and one not always accomplished at a hotel.

Speaker Change: Better yet the world class experience extends to the Airbnb hosts we make their adoption of charging as an amenity near seamless once they answer three simple questions on our website. They have a quote including installation costs and we can implement charging in as little as two weeks as a term.

Speaker Change: Key solution.

Richard Wilmer: We are now exploring compelling use cases for this offering outside of the vacation rental industry, which is important for me to call out as one of those actionable, margin-rich initiatives currently underway. Operational excellence is our fourth cornerstone and the area in which our results have surpassed our internal expectations. We had a good quarter and are ahead of our plans for cash, gross margin, OPEX, and adjusted EBITDA as a result. We remain disciplined, factoring opex and margin impact into every decision we make.

Speaker Change: We are now exploring compelling use cases for this offering outside of the vacation rental industry.

Speaker Change: Which is important for me to call out is one of those actionable margin rich initiatives currently underway.

Speaker Change: Operational excellence is our fourth cornerstone.

Speaker Change: And the area in which our results have surpassed our internal expectations.

Speaker Change: We had a good quarter and are ahead of our plans for cash gross margin Opex and adjusted EBITDA as a result.

Speaker Change: We remain disciplined factoring opex and margin impact into every decision we make.

Richard Wilmer: This requires a lot of restraint but has enabled focused and delivered results. The proof points above outline progress and deliverables under these four cornerstones of our strategy, which we will continue to do as the year progresses. Moving on to our latest non-financial metrics of note, this is another area of the business which continually demonstrates scale. In the quarter, we reached two amazing milestones. Most significantly, ChargePoint now offers drivers access to more than a million places to charge worldwide across public, private, and roaming ports.

Speaker Change: This requires a lot of restraint and has enabled to focus and delivered results.

Speaker Change: The proof points above outlined progress and deliverables under these four cornerstones of our strategy, which we will continue to do as the year progresses.

Speaker Change: Moving on to our latest non financial metrics of note. This is another area of the business, which continually demonstrate scale in.

Speaker Change: In the quarter, we reached two amazing milestones most significantly charge point now offers drivers access to more than a million places to charge worldwide across public private and roaming ports.

Richard Wilmer: For us, this is a celebratory milestone, and equally impressive was the fact that this statistic grew approximately 10% in a single quarter. The other milestone reached in Q1 is that we have now enabled more than 10 billion electric miles for our drivers, which is approximately 3.5 million cross-country trips from San Francisco to New York. Our managed port count has grown to more than 306,000. Of note, the number of DC fast charger ports under management grew more than 14% in Q1 alone, for a total of surpassing 27,000 fast chargers under management at the end of Q1. These statistics should leave you with this key takeaway: EV adoption is continuing at an incremental pace, and our network is scaling along with it. As our network grows, so will our subscription revenues.

Speaker Change: For us this is a celebratory milestone and equally impressive was the fact that this statistic grew approximately 10% in a single quarter.

Speaker Change: The other milestone reached in Q1 is that we now have now enabled more than 10 billion electric miles for our drivers, which is approximately $3 5 million cross country trips from San Francisco to New York.

Speaker Change: Our managed port count has grown to more than 306000.

Speaker Change: Of note the number of DC fast charge reports under management grew more than 14% in Q1 alone.

Total or surpassing 27000 fast Chargers under management at the end of Q1.

Speaker Change: These statistics should leave you with this key takeaway EV adoption is continuing at an incremental pace and our network is scaling along with it.

Speaker Change: As our network grows so do our subscription revenues.

Richard Wilmer: I'd like to thank you again for joining us today. To summarize, Q1's results were positive, and we will gain momentum as the year moves on. If you look at our news and announcements so far in Q2, you will see that momentum is clearly building before turning the call over to our CFO, Mansi, for the financial review. I would like to once again remind you that when we say we will do something, we fully intend to do it. Hopefully, you agree that Q1 was an early proof point of this. Thank you for your time and ongoing support.

Speaker Change: I'd like to thank you again for joining us today.

Speaker Change: To summarize Q1, the results were positive and.

Speaker Change: And we will gain momentum as the year moves on.

If you look at our news and announcements so far in Q2, you will see that momentum is clearly building.

Speaker Change: Before turning the call over to our CFO <unk> <unk> for the financial review I would like to once again remind you.

Speaker Change: That when we say we will do something we fully intend to do it hopefully you agree that Q1 was an early proof point of this.

Speaker Change: Thank you for your time and ongoing support.

Mansi Khetani: Thanks, Rick. As a reminder, please see our earnings release where we reconcile our non-GAAP results to GAAP. Our principal exclusions are stock-based compensation, amortization of intangible assets, and certain costs related to restructuring and litigation. We continue to report revenue along three lines: Network Charging Systems, Subscriptions, and others. Network Charging Systems represents our connected hardware.

Speaker Change: Thanks, Jake as a reminder, please see our earnings release, ladies reconciled our non-GAAP results to GAAP.

Speaker Change: All participant exclusion of stock based compensation amortization of intangible assets and certain costs related to restructuring and litigation.

Mansi Khetani: Subscriptions include our cloud services connecting that hardware, our Assure warranties, and our ChargePoint as-a-Service offering, where we bundle our full-stack solutions into recurring subscriptions. Other revenue consists of professional services and certain non-material revenue. Moving on to the results for the quarter, revenue was $107 million, above the midpoint of our guidance range of $100 to $110 million. This was 8% lower than the fourth quarter, reflecting the expected seasonal slowdown, and 18% lower year-on-year due to lower hardware revenue. Network Charging Systems, at $65 million, accounted for 61% of first quarter revenue.

Speaker Change: We continue to report revenue along the line.

Speaker Change: Charging systems.

Speaker Change: Option and other.

Speaker Change: Nicolas driving system represents a connected hardware.

Speaker Change: Subscriptions.

Speaker Change: Our cloud services connecting that hardware I shall I wondering Keith and John pointed this service offering where we bundle our full stack solution into recurring subscription.

Speaker Change: Okay consists of professional services and certain non material revenue stream.

Mansi Khetani: This was down 12% sequentially due to the impact of seasonality and down 34% year-on-year, in line with our expectations. Subscription revenue, at $33 million, was 31% of total revenue, essentially flat sequentially, and up 27% year-on-year. Other revenue, at $8 million, was 8% of total revenue plus sequentially and up 54% year-on-year. Turning to verticals, we report verticals from a billing perspective, which approximates the revenue split. First quarter billing percentages were commercial 63 percent, fleet 20 percent, residential 15 percent, and other 3 percent, generally consistent with last quarter.

Speaker Change: Moving onto the results for the quarter revenue was $107 million above the midpoint of our guidance range of $100 million to $110 million.

This was 8% lower than the fourth quarter, reflecting the expected seasonal slowdown.

Speaker Change: 18% year on year due to lower hardware revenue.

Speaker Change: Nicholas charging system at 65 million accounted for 61% of first quarter revenue.

Speaker Change: This was down 12% sequentially due to the impact of seasonality and down 34% year on year in line with our expectation.

Speaker Change: Subscription revenue at $33 million with 31% of total revenue essentially flat sequentially and up 27% year on year.

Speaker Change: Although revenue at 8 million with 8% of total revenue flat sequentially and up 54% year on yet.

Speaker Change: Johnny <unk> redeployed verticals from a billings perspective with your proximity the revenues.

Speaker Change: First quarter billings percentages, what commercial is 63% fleet, 20% dividends, you, 15% and other 3% generally consistent with last quarter.

Mansi Khetani: As Rick mentioned, we continue to see projects pushed out in both commercial and fleet verticals as customers await site readiness and vehicle delivery. Our home product continued to sell very well, and in the first quarter, a significant portion of our home units shipped were equipped with a NAX connector. From a geographic perspective, North America made up 81% of first quarter revenue, and Europe was at 19%. In the U.S., we generated our forest sales through the NEVI program.

Speaker Change: As Rick mentioned, we continue to see projects pushed out in both commercial verticals.

<unk> elite.

And vehicle delivery.

Speaker Change: I hope that that continues to sell very well and in the first quarter a significant portion of our home units shipped.

Speaker Change: Within that disconnected.

Speaker Change: From a geographic perspective, North America made up 81% of first quarter revenue in Europe was at 19%.

Speaker Change: We generated our first dance from the Navy program.

Mansi Khetani: Turning to gross margin, non-GAAP gross margin for the first quarter was 24%, up sequentially from 22% in Q4. However, gross margin was down one percentage point year-on-year. The sequential improvement was largely due to improved subscription margins, as well as a larger mix of subscription revenue with overall revenue, which is typical in a seasonally low Q1 with lower hardware. Non-GAAP operating expenses for Q1 were $66 million, a decrease of 22% from $85 million in Q1 last year and a decrease of 11% from $75 million in Q4, reflecting the full quarter impact of the January restructuring and our continued focus on cost management

Speaker Change: Turning to gross margin non-GAAP gross margin for the first quarter with 24% up sequentially from 22% in Q4.

Speaker Change: Gross margin was down one percentage point year on yet.

Speaker Change: This sequential improvement was largely due to improved subscription market.

Speaker Change: A larger mix of subscription revenue within overall revenue, which is typical in a seasonally low Q1 with lower hardware sales.

Speaker Change: non-GAAP operating expenses for Q1 was $66 million a.

Speaker Change: A decrease of 22% from $85 million in Q1 last year and a decrease of 11% from $75 million in Q4, reflecting the full quarter impact of the January restructuring and a continued focus on cost management.

Mansi Khetani: Non-Gap Adjusted EBITDA loss for the first quarter was $36 million, a significant improvement as compared to a loss of $45 million in the fourth quarter and a loss of $49 million in the first quarter of last year. This improvement was achieved even with a lower revenue base due to growth module improvement and reduction in operating expense. Stock-based compensation in the first quarter was $22 million, down from $25 million in the fourth quarter and down $2 million year-on-year due to recent restructuring events.

Speaker Change: non-GAAP adjusted EBITDA loss for the first quarter was $36 million, a significant improvement as compared to a loss of $45 million in the fourth quarter and a loss of $49 million in the first quarter of last year.

Speaker Change: This improvement was achieved even with a lower revenue base due to gross margin improvement and reduction in operating expenses.

Stock based compensation in the first quarter was $22 million down from $25 million in the fourth quarter and down 2 million year on year due to recent restructuring events.

Mansi Khetani: Looking at cash and cash equivalents, we ended the quarter with $292 million, down from $358 million last quarter. In addition to cash usage to cover adjusted EBITDA losses, cash consumption included a semi-annual interest payment on our convertible bond, as well as severance charges associated with our January restructure. I am pleased to relay that the $30 million of restricted cash as of April 30, 2024 is now unrestricted. This leaves only $400,000 restricted from our $292 million cash balance.

Looking at cash and cash equivalents.

Speaker Change: We ended the quarter with $292 million down from 358 million last quarter.

Speaker Change: In addition to the cash usage to cover an adjusted EBITDA loss.

Speaker Change: <unk> included a semi annual interest payment on our convertible bond as well as service charges associated with our January restructuring.

Speaker Change: I am pleased to say the $30 million of restricted cash as of April 32024 is now unrestricted.

Speaker Change: This leaves only $400000 restricted if I can.

Speaker Change: $92 million cash balance.

Mansi Khetani: As Rick mentioned, our inventory balance increased in the quarter as we started to bring in our Southeast Asia-based partners. However, our inventory is primarily made up of finished goods and products that we are actively selling. We expect to bring this down in the second half of the year as we sell through the finished goods on hand. However, our Deferred Revenue continues to grow. This represents payments for future revenue commitments from existing customers and finishes the quarter at $235 million, up from $231 million at the end of Q4. Our $150 million revolving credit facility remains undrawn, and we have no debt maturities until 2028. We did not issue any shares via the ADM during the quarter.

Speaker Change: As Jake mentioned inventory balance increased in the quarter as we started to bring up our southeast Asia based partner. However, our inventory is private really made up of finished goods and products and we are actively selling.

Speaker Change: We expect to bring this down in the second half of the year as we sell through the finished goods on hand.

Speaker Change: Our deferred revenue continues to grow.

Speaker Change: This represents payments for future revenue commitments from existing customers and finished the quarter at $235 million up from $231 million at the end of Q4.

Speaker Change: I $150 million revolving credit facility remains undrawn and we have no debt maturity until 2028.

Speaker Change: We did not issue any shares via the ATM during the quarter.

Mansi Khetani: At the end of the first quarter, we had approximately 425 million shares outstanding. Turning to guidance, for the second quarter of fiscal 2025, we expect revenue to be between $108 to $118 million, down 25% year-on-year at the midpoint. As mentioned in the last call, we expect a larger portion of full-year revenue to be generated in the second half. This is due to the following.

Speaker Change: At the end of the first quarter, we had approximately 425 million shares outstanding.

Speaker Change: Turning to guidance for the second quarter of fiscal 2025, we expect revenue to be between $180 million to $118 million down 25% year on year at the midpoint.

Speaker Change: As mentioned in the last call, we expect a larger portion of full year revenue to be generated in the second half.

Speaker Change: This is due to the following.

Mansi Khetani: Normal seasonality of Transactional Business Visibility into large orders booked across both commercial and feed verticals for the second half, as well as signs of overall charging demand recovery driven by factors Rick alluded to earlier. We continue to expect gradual improvement in growth margin as the year progresses as a result of continued cost-down efforts for hardware products and improvements in subscription margins due to operating efficiency of the support organization, combined with automation initiatives underway.

Speaker Change: Normal seasonality of transactional business.

Visibility into large order booked across both commercial and feed vertical for the second half.

Vic: As well as signs of overall charging demand recovery driven by factors Vic alluded to earlier.

Vic: We continue to expect gradual improvement in gross margin as the year progresses. As a result of continued cost down efforts well hardware products and improvement in subscription margin usual operating efficiency of disappoint organization.

Mind with automation initiatives underway.

Mansi Khetani: We expect non-GAAP operating expenses to remain relatively flat in the second quarter but fall further in the second half of the year as we continue to focus on operational efficiency and other cost avoidance measures. We are committed to being adjusted EBITDA positive in the fourth quarter of this year and plan to achieve that through a combination of accelerated top line growth, growth module improvements, as well as operating expense reduction as we progress through the year.

Vic: We expect non-GAAP operating expenses to remain relatively flat in the second quarter.

Vic: Further in the second half of the year and we continue to focus on operational efficiency and other cost avoidance measures.

Vic: We are committed to being adjusted EBITDA positive in the fourth quarter of this year.

Vic: To achieve that through a combination of accelerated top line growth gross margin improvement as well as operating expense reductions as we progress through the year.

Mansi Khetani: We are well capitalized to achieve this goal. In summary, we are pleased with the improvement in our overall financial performance, especially the improvement in adjusted EBITDA loss, resulting from improved gross margin and reduced OPEX, as well as overall cash management. And we will continue to focus on these metrics as the year progresses. With that, I will turn the call back to the operator for questions.

Well capitalized to achieve this goal.

Vic: In summary, we are pleased with the improvement in our overall financial performance, especially the improvement in adjusted EBITDA loss, resulting from improved gross margin and did you stop it as.

Vic: <unk> overall cash management, and we will continue to focus on these metrics as the year progresses.

Speaker Change: With that I will turn the call back to the operator for questions.

Operator: Thank you. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw that question, again, press star one, and please limit yourself to one question and one follow-up. Your first question comes from the line of James West with Evercore ISI.

Speaker Change: Thank you if you would like to ask a question. Please press star one on your telephone keypad to raise your hand and joined the queue. If you would like to withdraw that question again press star one.

Speaker Change: Please limit yourself to one question and one follow up your first question comes from the line of James West with Evercore ISI. Please go ahead.

James Carlyle West: Please go ahead. Hey guys, we'll see you next time.

Richard Wilmer: Hey, good afternoon, Rick and Mansi. Hi, James. Hello.

James Carlyle West: Hey, good afternoon, Rick and Monty.

Hi, James.

Richard Wilmer: Rick, maybe first a question for me on the significant number of NEVI wins that you've had so far, which should turn into grants and sales here. What's the expected timeline for recognizing those sales? I know there's been some delays in kind of getting the NEVI program underway, which I recognize we kind of all expected at the beginning as it's a government program and it had to go to the states. How are you thinking about the rollout and the sales hitting your revenue?

James Carlyle West: Rick maybe first question for me on the significant number of Navy wins that you've had so far which should turn into new grants in sales here, what's the expected timeline for recognizing those sales I know theres been.

Some delays in kind of getting that every program underway, which.

James Carlyle West: Recognize we've kind of all expected at the beginning and is its government program and it had to go to the states but.

How are you thinking about the rollout and the sales hitting your your revenue.

Richard Wilmer: We'll see some this year for sure, but we expect the bulk of it to be next year.

Richard Wilmer: Well, we will see some this year for sure, but we expect the bulk of it to be next year.

James Carlyle West: Okay, got it. And then you announced the new, or at least a new agreement, a joint development agreement with WNC. In your prepared remarks, I know we had the Kimpo Polytech announcement recently as well. Could you maybe unpack kind of the what you're doing there, what the strategy is, you know, how you're realigning your hardware development? We have a very

Speaker Change: Okay, Okay got it and then.

Speaker Change: Then you announced the new or at least the new agreement a joint development agreement with W. M.

Speaker Change: C.

Speaker Change: In your prepared remarks, so nobody had the Kimbo polytech announcement recently as well could you maybe unpack.

Speaker Change: The what you're doing there what the strategy is how you're realigning your hardware development.

Richard Wilmer: We have a very robust hardware roadmap and a variety of new products that we're very excited to bring to the market, and adding more hardware development bandwidth to the overall effort is clearly beneficial to what we're trying to accomplish. So we've added WNC as a second partner, in addition to Akbel Polytech, to increase that bandwidth. And they are each focused on certain areas of specialization that will allow us to bring some really exciting and compelling products to market as we move into the future.

Yeah, we have a very.

Speaker Change: Very robust hardware roadmap.

Speaker Change: Variety of new products that we're very excited to bring to market and adding more hardware development bandwidth to the overall effort is clearly beneficial to what we're trying to accomplish.

Speaker Change: So we've added WMC is a second partner in addition to outgrow polytech to increase their bandwidth and we have been each focused on certain areas of specialization.

Speaker Change: Well allowed us to bring in some really exciting and compelling market our products to market as we move into the future.

Speaker Change: Got it thanks, Greg.

Colin William Rusch: Your next question comes from the line of Colin Rusch with Oppenheimer. Please go ahead.

Speaker Change: Your next question comes from the line of Colin Rusch with Oppenheimer. Please go ahead.

Richard Wilmer: Thanks so much, guys. If you look at some of these dualization rates moving higher and the pressure that's, you know, building around the overall network, can you talk about what you're seeing as precursors to incremental orders or incremental capacity buildout with your customers in particular geographies?

Colin William Rusch: Thanks, so much guys.

Colin William Rusch: If you look at some of these utilization rates moving higher and the pressure that built in around the overall network can you talk about what youre seeing as precursors to incremental or is there incremental capacity build out with your customers.

Speaker Change: In particular geographies.

Richard Wilmer: Yeah, hi Colin. I think in addition to the increasing utilization pressure, as I mentioned in the prepared remarks, we're also seeing this dislocation, especially in commercial charging, between the sale of EVs and the demand for chargers. I think in areas where there's reasonable EV penetration, you're seeing institutions that want people to come to their buildings, putting in chargers now, because they know there's a critical mass of EV drivers out there that they need to attract to their business or their institution.

Speaker Change: Yeah, Hi, Collyn I think in addition to the increasing utilization pressure.

Speaker Change: As I've mentioned in the prepared remarks, we're also seeing this dislocation, especially in commercial charging between.

Speaker Change: The sale of Evs.

Speaker Change: And the demand for Chargers I think in areas, where there is reasonable EV penetration.

Speaker Change: Youre seeing institutions that want people to come to their building.

Speaker Change: Putting in Chargers now because they know there's a critical mass of EV drivers out there that they need to attract to their to their business or their or their institution. So you've got the utilization pressure going up you've got this recognition that if I don't have EV Chargers in my parking lot see some people I care about arent.

Richard Wilmer: So you've got the utilization pressure going up. You've got this recognition that if I don't have EV chargers in my parking lot, some people I care about aren't going to come to my business. Combined, this is what's starting to show some demand in the commercial market for chargers that may not directly correlate with EV sales.

Speaker Change: When it come to my business.

Speaker Change: Combined is what's starting to show some demand in the commercial market for Chargers that may not directly correlate with EV sales.

Mansi Khetani: That's super helpful. And then, you know, thinking about inventory levels and what you've just added to the inventory, how should we be thinking about, you know, kind of overall run rate on what you're going to be carrying and what this incremental inventory build is constituted from, you know, what is constituted in there? Is it finished goods? How much are the components? How flexible is that inventory? And actually, we see that trend sort of bounces back here.

That's super helpful, and then thinking about inventory levels.

Speaker Change: And what you've just added to the inventory how should we be thinking about you know.

Speaker Change: Kind of overall run rate on what youre going to be carrying in what.

Speaker Change: Incremental inventory build.

Speaker Change: What is constituted and there is good how much is components, how flexible is that inventory and actually we see that trend through the balance of here.

Colin William Rusch: Yeah, hi, Colin. So it's mostly finished goods in the inventory right now; there's a little bit of raw material, there's some material in transit, but the majority is finished goods. And it is made up of products that we're actively selling, all next-gen products. We review inventory very, very, you know, religiously every every quarter. And it's all live inventory actively selling products in there right now.

Speaker Change: Yes, Hi, Collyn.

Speaker Change: It's mostly finished goods in the inventory right now, there's a little bit of raw material. There's some material in transit, but the majority is finished goods and it is made up of products that we are actively sending all nextgen taught us.

Speaker Change: We either view inventory very very.

Speaker Change: Diligently every every quarter.

Speaker Change: And it's all live inventory actively selling products.

Speaker Change: There right now.

Mansi Khetani: Okay, I'll follow up on that offline. Thanks so much, guys.

Speaker Change: Okay I'll follow up on that offline. Thanks, so much guys.

William Chapman Peterson: Your next question comes from the line of Bill Peterson with J.P. Morgan. Please go ahead.

Speaker Change: Your next question comes from the line of Bill Peterson with Jpmorgan. Please go ahead.

William Chapman Peterson: Yeah, I think good afternoon. Thanks for taking the question.

Speaker Change: Yes, hi, good afternoon, thanks for taking the questions.

William Chapman Peterson: Wondering if you've received any incremental inbounds or demand from customers and the interest in what's happening to your SaaS product charges.

Sure.

Speaker Change: Yes.

Richard Wilmer: I'm wondering if you've received any incremental inbounds or demand from customers interested in tapping your fast products. So, just the superchargers business. I'm sure a big chunk of their team has let go. Have you seen any, like, increased demand for, let's say, NEBI or commercial programs in particular?

Speaker Change: So, yes, the supercharger business uncertainty.

Speaker Change: Hey, Chuck and his team does that go.

Speaker Change: We see increased demand so, let's say, maybe a commercial programs in particular.

Richard Wilmer: Yeah, you know, again, the Tesla changes, you know, you know, exactly what happened there. Some of it, you know, it's been reported on extensively, but I'm not sure how accurate it all is. So, some of it's speculation, but from our perspective, there's been some clear benefits as a result of those changes. We've had access to some good talent that has become available, which is good for us. And we've also seen some changes in the market in demand in certain areas, apparently, as a result of the Tesla changes, and we're absolutely capitalizing on those when they come up.

Speaker Change: Again, the Tesla changes.

Speaker Change: Exactly what happened there so.

Speaker Change: <unk> reported on extensively, but I'm not sure how accurate. It all is so some of it's speculation but from our perspective, there has been some clear benefit as a result of those changes.

Speaker Change: We've had access to some some good talent that does become available which is good for us and we've also seen some changes in the market and demand in certain areas apparently as a result of the Tesla changes and we're absolutely no cap.

Speaker Change: Capitalizing on those when they come up.

William Chapman Peterson: Great, thanks for that. Obviously, you're expanding your hardware agreements across the board. I'm wondering how you characterize any sort of obsolescence risk with your existing inventory? I mean, are you seeing any signs that customers would prefer to wait for any newer hardware in your partner's major? Or are you off track? The question is, how are you planning to get rid of the high-cost inventory in your existing product lines ahead of the newer products?

Speaker Change: Great Thanks for that.

Obviously, you're extending your hardware agreements across the board I am wondering if you are how would you characterize any sort of obsolescence risk with their existing inventory.

Speaker Change: Are you seeing any signs of customers would prefer to wait for any newer hardware partners in Asia or are.

Speaker Change: Are you offer exactly the question is how how are you planning to get rid of the high cost inventory into existing sort of product lines that are well into our products.

Richard Wilmer: So I didn't catch the entire question clearly, Bill, but I'll do my best based on what I understood. The level of inventory we have is something we will continue to work down as we move through the course of the year. You know, we've got a lot of focus, as we've mentioned multiple times, not only on this call, but in prior calls around operational excellence. And one area of focus is really around managing inventory, as Mansi mentioned.

Speaker Change: So I didn't catch the entire question clearly bill, but I'll do my best based on what I understood. So.

Speaker Change: The level of inventory, we have is something we will continue to work down as we move through the course of the year.

Speaker Change: We've got a lot of focus as we've mentioned multiple times not only in this call but in prior calls around operational excellence.

Speaker Change: And one area of focus really is around managing inventory as Monty mentioned.

Richard Wilmer: So, we've got, again, I think, a very strong process in place now, such that we don't drive excess inventory. What we're working through is inventory that we have on hand, plus inventory we've committed to take from our valuable manufacturing partners. And we expect it to take the rest of the year to work through that and get down to what we would consider a normalized inventory on both our balance sheet, as well as with our manufacturing partners.

Speaker Change: So we've got again I think a very strong process in place now such that we don't drive excess inventory. What we're working through is inventory that we have on hand, plus inventory, we've committed to take from our valuable manufacturing partners and we expect it to take the rest of the year to work through that and get down to what we would consider a new.

Speaker Change: <unk> inventory.

Speaker Change: And both are on our balance sheet as well as with our manufacturing partners.

William Chapman Peterson: Okay, thanks. We'll take the rest of our time. Thank you.

Speaker Change: Okay. Thanks, So I'll take the rest offline. Thank you.

Matt J. Summerville: Your next question comes from a line by Matt Summerville with DA Davidson. Please go ahead.

Speaker Change: Your next question comes from the line of Matt Summerville with D. A Davidson. Please go ahead.

Matt J. Summerville: Thanks. To that last point, the fact that this inventory normalization you're looking at is going to take the better part of this fiscal year, I would imagine there's some sort of margin penalty associated with that. So, as I think about next year, under quote, a more normalized, you know, operational situation in that regard, how much of an uplift should you get from not having to kind of deal with these issues? And similarly, I'd like to maybe give you a little more color on how some of these new Asian manufacturing and development relationships are sort of bearing fruit for you guys. And when will we maybe really start to see more concrete gross profit?

Matt J. Summerville: Thanks to that last point. The fact that this inventory normalization you are looking at is going to take the better part of this fiscal year I would imagine there is some sort of margin penalty associated with that so as I think about next year under a more normalized operational situational not.

Speaker Change: Regards how much of an uplift you get from not having to deal with these issues.

Speaker Change: Similarly, like with just maybe a little more color on how some of these new Asian manufacturing and development relationships are sort of bearing fruit for you guys and when maybe we really start to see more concrete gross profit improvement.

Richard Wilmer: Yeah, your first question was very insightful, Matt, thanks for that. And there's, I don't know if I would call it a penalty on gross margin, but it's definitely, we're deferring optimal gross margin or optimal product costs. We're working through inventory on some product lines that were built at higher cost bases than we would enjoy if we were building that inventory new today, out of one of our Asian factor factories, or even one of our existing factories, because we continue to drive costs down on the materials that go into our products, in addition to the overall cost of manufacturing them. So we expect again that inventory to be worked through by the end of the year.

Speaker Change: Yeah on your first question was very insightful that thanks for that and there is I don't know if I would call. It a penalty on gross margin, but it's just definitely we're deferring optimal gross larger optimal product costs, we're working through inventory on some product lines that was built at higher cost basis than we would enjoy if we were.

Speaker Change: Building that inventory new today.

Speaker Change: One of our Asian factor factories, or even one of our existing factories, because we continue to drive costs down.

Speaker Change: On the materials that go into our products. In addition to the overall cost of manufacturing them. So.

We expect again that inventory to be worked through by the end of the year and at that point, we'll realize all the benefits of the cost down efforts we've taken.

Richard Wilmer: And at that point, you know, we'll realize all the benefits of the cost-down efforts we've taken, both on the materials that go into our products, as well as the costs related to manufacturing those products. Specifically, our Asian manufacturing partners, both Aqaba Polytech as well as WNC, are now in production for us. And the benefit is not only the cost structure of Southeast Asia, where they're both located in manufacturing for us, but almost more importantly, the localized supply chain we can now access in that part of the world.

Speaker Change: Both on the materials that go into our products as well as the costs related to the manufacturing of those products.

Speaker Change: Specifically on our Asian manufacturing partners, both now <unk> as well as WMC or in production for us.

Speaker Change: And the benefit not only is the cost structure of southeast Asia, where they are both located in manufacturing for us, but almost more importantly is the localized supply chain. We can now access in that part of the world.

Richard Wilmer: Southeast Asia has been building high technology products for almost 50 years now, and the local suppliers there are very capable of building high quality, highly reliable parts at very cost-effective prices. If you look at some of the manufacturing we've done up to now outside of Asia, many of the parts that go to those factories come from Asia. So not only do we have a richer way to access the Southeast Asian supply chain capabilities, but we're also going to reduce lead time and minimize logistics costs because the parts are going to be much closer to the factory.

Speaker Change: Southeast Asia has been building high technology products for almost 50 years now and the local suppliers. There are very capable of building high quality highly reliable parts at very cost effective prices. If you look at some of our manufacturing we've done up to now outside of Asia. Many of the parts that go to those factories come.

Speaker Change: From Asia, So not only do we have.

Richard Wilmer: Richard way to access the southeast Asian supply chain capabilities, but we're also going to reduce lead time and minimize logistics cost because the parts are going to be much closer to the factories.

Richard Wilmer: And then.

Matt J. Summerville: [inaudible] Thank you for that. And then just as a follow-up, I think you mentioned in your prepared remarks that you had, you know, 10 million or more in revenue that basically pushed to the right due to, you know, resource constraints. I'll call that. And I guess I'm wondering if that constraint issue is something that is more acute in nature or more chronic? Is that something that's going to get worse before it gets better? If you can maybe just talk through that, so it isn't resource constraints.

Speaker Change: Thank you for that and then just as a follow up I Couldnt you had mentioned in your prepared remarks you had.

Speaker Change: $10 million or more in revenue that basically pushed to the right do too.

Speaker Change: Resource constraints I'll call that and I guess I'm wondering if that constraint issue is that something that is more more acute in nature or more chronic is that something thats going to get worse before it gets better. If you can maybe just talk through that a little bit.

Richard Wilmer: So it isn't resource constraints on behalf of ChargePoint, Matt, it's resource, I don't know if you'd characterize it as frequent source constraints, but it's construction delays and delivery of other infrastructure equipment like transformers and switchgears to sites that are under construction. That's largely what we see causing deals to move out from quarter to quarter, delays with site readiness and site construction.

So is it resource constraints on behalf of charge point about its resource I don't know if you'd characterize as frequent source constraints, but it's construction delays in the delivery of other infrastructure equipment like Transformers and switch gears to sites that are under construction, that's largely what we see causing deals to move out.

Speaker Change: From quarter to quarter or delays with site readiness and site construction.

Speaker Change: Got it thanks.

Christopher Alan Pierce: Your next question comes from the line of Chris Pierce with Needham and Company. Please go ahead.

Speaker Change: Your next question comes from the line of Chris <unk> with Needham <unk> Company. Please go ahead.

Mansi Khetani: Hey, good afternoon. What's the right way to think about subscription revenue being flat quarter over quarter after the step-up we saw in the fourth quarter?

Speaker Change: Hey, good afternoon, what's the right way to think about subscription revenue being flat quarter over quarter. After the step up we saw in the fourth quarter.

Christopher Alan Pierce: Yes, the reason for that was in Q4, we had a small adjustment in Assure Revenue, a typical year-end adjustment, which did not reoccur in Q1. So if you normalize for that, you would have seen a gradual improvement in line with normal trends.

Speaker Change: Yes, the reason for that.

Speaker Change: That was in Q4, we had a small adjustment in Schiller revenue.

Speaker Change: Typical year end adjustment, which did not reoccur in Q1. So if you normalize for that you would have seen a gradual improvement.

Speaker Change: In line with the normal churn.

Christopher Alan Pierce: Okay, perfect. Thank you for that. And then just following up on the last question, you know, the eight figures on deals. Is it the right assumption that they would have hit this quarter and you still hit the midpoint above the midpoint of your top line guidance, or is that just a general comment and that they've slipped in, you know, they weren't necessarily in?

Speaker Change: Okay perfect. Thank you for that and then just following up on the last question the eight figures of deals.

Speaker Change: Is the right assumption that they would have hit this quarter and you still hit the midpoint above the midpoint of your topline guidance or is that just a general comment and did they have slipped and they weren't necessarily in this quarter.

Mansi Khetani: Oh, if they had hit this quarter, we would have been above range, but now they've moved into... Oh, were they in the range? Were they in the original guidance, though, or that's... Getting too deep in the weeds.

Speaker Change: Okay.

Speaker Change: This quarter, we would have been above range.

Speaker Change: Were they in the range.

Speaker Change: The original guidance or that's.

Christopher Alan Pierce: Yeah, so we basically see some kind of deal slippage every quarter, right? So we have a guidance methodology that takes into consideration all of that. So we kind of ensure that we hit the range. So, you know, we did build in some kind of padding for that.

Speaker Change: Getting too deep in the region.

Speaker Change: We basically see some kind of deal slippage every quarter.

Speaker Change: <unk> has a guidance methodology that takes into consideration penetration all of that.

Speaker Change: So we can ensure that we hit the range.

Speaker Change: So we did build in some kind of batting for that.

Christopher Alan Pierce: Okay, perfect. And then just one to follow up on one other question, one last question.

Speaker Change: Okay, Perfect and then just want to follow up on one other question. One last question. So the right way to think about it as axon withdrawn arent building next generation products right now they are helping you build existing product at lower cost and that's why the inventory that you have inventory sell through this year in theory.

Christopher Alan Pierce: So the right way to think about it is that Akbel and Wistron aren't building next-generation products right now. They're helping you build existing products at a lower cost. And that's why the inventory that you have is the inventory that you're able to sell through this year, in theory, without taking any sort of charges against it. That's the right way to think about it. Yeah, generally speaking, they're

Speaker Change: Taking any sort of charges against it that's the right way to think about it.

Richard Wilmer: Yeah, generally speaking, they're building current-generation products as we speak. They're also, we're also co-developing next-gen products with them, and in some cases, there are prototype builds underway now for those next-gen products with both partners.

Speaker Change: Generally speaking they are building current generation products as we speak.

Speaker Change: There also were also co developing next gen products with them and in some cases there is prototype builds underway now for those next gen products with with both partners.

Speaker Change: Okay. Thank you.

Speaker Change: Okay.

Mark Trevor Delaney: Your next question comes from the line of Mark Delaney with Goldman Sachs. Please go ahead.

Speaker Change: Your next question comes from the line of Mark Delaney with Goldman Sachs. Please go ahead.

Mansi Khetani: Yes, good afternoon. Thanks for taking the questions. You mentioned you have some bigger programs you expect to ship for in the second half of this year. Can you give us a sense of how much revenue you expect these larger programs to amount to in terms of the pickup in revenue?

Mark Trevor Delaney: Yes. Good afternoon. Thanks for taking my questions. You mentioned that you have some bigger program do you expect to ship four in the second half of this year can you give us a sense of how much revenue you expect these larger programs.

Mark Trevor Delaney: Amount to you in terms of the pick up in revenue.

Mansi Khetani: Generally, as we have mentioned in my prepared remarks, you know, this year, we're going to see a much more normal seasonality, like we've seen in prior normal years with, you know, the majority of our revenue coming in in the second half. And even as we kind of start emerging from this macro and you slow down in the first half, we believe that the second half will be even seasonally stronger than in past years.

Speaker Change: Hey, gentlemen.

Speaker Change: And in my prepared remarks.

Speaker Change: This year, we're going to see.

Speaker Change: A much more normal seasonality that we've seen in prior normal yards with a majority of our revenue coming in in the second half.

Speaker Change: And even as we kind of start emerging from this macro and you slow down in the first half we believe that the second half would be.

Speaker Change: Even seasonally stronger than past years.

Mansi Khetani: We have factored in, you know, we're confident of the seasonality coming in because of these large deals that we're seeing in our pipeline, all the verticals that we have right on the fleet side. We're seeing large FedRAMP deals pushed out from the first half into the second half. E-bus continues to be strong.

Speaker Change: We have factored in.

Speaker Change: We're on.

Speaker Change: Confident of the seasonality come again because of these large deals that we're seeing in our pipeline.

Speaker Change: All of our verticals that we have on the fleet side, we're seeing large giant deals.

Mark Trevor Delaney: USPS deals are in there. On the commercial side, we're seeing some Navy-funded deals coming into the second half, and workplaces picking up. On the residential side, you know, our residential product is doing well. We just announced the Airbnb deal. That'll give us some push. So, all of this is kind of in the pipeline for the second half. In addition, we have new products like the PanoGraph that we've announced that are launching in the second half. So, we're seeing a good amount of pipeline built up for that as well.

Speaker Change: Pushed out from the first half into the second half.

Speaker Change: <unk> continues to be strong USPS do you go in there.

Speaker Change: The commercials are seeing some navy funded deals coming into the second half and workplaces picking up on the residential side you know our residential product is doing well, we just announced the airbnb deal that will give us. Some bush. So all of this is kind of in the pipeline for the second half. In addition, we have new products like the pantograph, they've even announced that's launching in the second half <unk>.

Speaker Change: What amount of pipeline built up for that as well.

Mansi Khetani: Very helpful caller. Thanks for that, Mansi.

Very helpful color. Thanks for that Muncie, and then my other question was in Opex came down to $66 million on a non-GAAP basis. This quarter I think you said it could fall further I believe on a dollars basis in the second half of the year. So I was hoping to better understand where opex dollars could go to on an absolute basis into H. Thanks.

Mansi Khetani: Yeah, we're not specifically guiding to OPEX in the second half, but I do expect that OPEX will come down. So from the Q1 levels of $66 million, I think Q2 will kind of stay sluggish, as we have, you know, some mandatory raises in some regions, etc.

Mansi Khetani: And then my other question was about off X coming down to 66 million on a non-gap basis this quarter. I think you said it could fall further, I believe, on a dollar basis in the second half of the year. So I was hoping to better understand where off X dollars could go on an absolute basis in 2H. Thank you.

Speaker Change: Yeah, we're not specifically guiding to opex mistaken, but I do expect that Opex will come down from the Q1 level of $66 million I think Q2 will kind of stay flattish.

Speaker Change: As we have said.

Speaker Change: Mandatory ranges in some regions et cetera, so that will kind of wash out the cost avoidance initiatives that we will have but then in the second half we have specific plans in mind.

Mansi Khetani: So that will kind of wash out the cost avoidance initiatives that we will have. But then, in the second half, we have specific plans in mind. One being a reduction in NRE costs, non-recurring engineering costs, as we transition more and more engineering over to our Asian partners. And in addition to that, we have a lot of different ways planned. Generally, what we saw in Q1 was, you know, we're seeing fiscal discipline across the entire company, and this is showing amazing results. So we're, you know, we overachieved our plan in Q1, and so we're really confident that we'll achieve what we have planned for the second half.

Speaker Change: One being a reduction in annuity costs nonrecurring engineering costs, as we transition more and more engineering or late July Agl's partners and then in addition to that we have a lot of different.

Speaker Change: Ways.

Speaker Change: And generally what we saw in Q1 was.

Speaker Change: Inc fiscal discipline across the entire company and this is showing amazing results.

Speaker Change: We have all been.

Speaker Change: Achieved our plan in Q1 until they are really confident that we will achieve what we have planned for the second half.

Thank you.

Steven Bryant Fox: Your next question comes from the line of Steven Fox with Fox Advisors LLC. Please go ahead.

Speaker Change: Your next question comes from the line of Steven Fox with Fox Advisors LLC. Please go ahead.

Richard Wilmer: Hi, good afternoon. Rick, I was wondering if you could go back over the rationale behind the deals being postponed. I think the question we're trying to get at is whether this is something that we should think of as an ongoing situation, even as your sales grow because of where we are in terms of supply chains, worker availability, and infrastructure, or whether you think it eases or gets worse. Any kind of color on how you approach the construction backdrop relative to your backlog, you're going to need to follow up.

Speaker Change: Hi, good afternoon Rick.

Steven Bryant Fox: I was wondering if you can go back over the.

Steven Bryant Fox: The rationale behind the deals being postponed I think I think the question, we're trying to get at.

Richard Wilmer: Is whether this is something that we should think of as an ongoing situation even as your sales grow because of where we are in sort of supply chains worker availability infrastructure or whether you think it eases or gets worse any kind of color on how you approach sort of.

Richard Wilmer: Construction backdrop.

Speaker Change: And relative to your backlog and then I had a follow up.

Steven Bryant Fox: Yeah, good question, Steven. I think, as Mansi alluded to, we've got a buffer in place where we account for this every quarter, and we're not planning for it to go down. We are not aware of any reasons that would allow construction to accelerate or other infrastructure gear that these sites rely on to come down dramatically in their lead times. So we're holding our assumptions regarding deals that roll over from one quarter to the next fairly constant as we move through the year.

Stephen: Yes. Good question, Stephen I think as Monte alluded to we've got a buffer in place where we account for this every quarter and we're not planning for it to go down.

Speaker Change: We are not aware of any reasons that would allow construction to accelerate or other infrastructure gear that these sites rely on too.

Speaker Change: Come down dramatically on with their lead times. So we're holding our assumptions regarding deals that rollover from one quarter to the next fairly constant as we move through the year.

Richard Wilmer: That's helpful commentary. And then just on the beat in the quarter, I mean, outside of the inventories that were already asked about, it seems like you consistently outperformed across the metrics. I don't know what you, is there some overarching theme you would attribute that to when you take into account all the changes you made organizationally, et cetera, or is it just little, you know, singles and doubles here and there?

Speaker Change: Okay.

Speaker Change: Helpful commentary and then just on the beat in the quarter I mean outside of the inventories that it was already asked about it.

Speaker Change: It seemed like you consistently outperformed across the metrics I don't know what you is there. Some overarching theme you would attribute that to when you given all the changes you've made organizationally et cetera or is it just little singles and doubles here and there. Thanks.

Steven Bryant Fox: It's easy to summarize it under this big headline, kind of operational excellence, which is very easy to say, but it's a lot of work to do that. And we've got nine different areas that we focus on specifically. And essentially, another way to talk about this is that we have the right people talking about those nine different topics at the right frequency, making sure that we're making all the right decisions and managing our resources extremely efficiently.

Speaker Change: Easy to summarize it up under this big headline kind of operational excellence, which is very easy to say, but it's a lot of work to do that and we've got nine different areas that we focus on specifically and essentially what another way to talk about this is we have the right people.

Speaker Change: <unk>.

Speaker Change: Talking about those nine different topics at the right frequency, making sure that we're making all the right decisions and managing our resources extremely efficiently.

Speaker Change: And again, we're really impressed with the results that our team produced in the first quarter and we know there's more opportunity left to be had as Monte alluded to we expect to see that show up in the Opex number as we move through into the second half of the year.

Steven Bryant Fox: And again, we're really impressed with the results that our team produced in the first quarter. And we know there's more opportunity left to be had. As Mansi alluded to, we expect to see that show up in the OPEX numbers as we move through into the second half of the year.

Richard Wilmer: Great, that's helpful. Thank you.

Speaker Change: Great. That's helpful. Thank you.

Christopher J. Dendrinos: Your next question comes from the line of Chris Dendrinos with RBC Capital Markets. Please go ahead.

Speaker Change: Your next question comes from the line of Chris Dendreon, Ben <unk> with RBC capital markets. Please go ahead.

Richard Wilmer: Yeah, good evening, and thank you. I guess maybe to kick off here, you highlighted some decent growth in the DC fast charger demand. I'm kind of curious, are you seeing any kind of pivot in what customers are demanding? Are there any changes in, I guess, level 2 versus that DC fast charger product?

Speaker Change: Yes.

Speaker Change: And thank you.

Christopher J. Dendrinos: I guess, maybe to kick off here you highlighted some decent growth in the DC fast charter demand I'm kind of curious are you seeing any kind of pivot and what customers are demanding is there any changes in.

Christopher J. Dendrinos: I guess level two versus that DC fast charge your product.

Christopher J. Dendrinos: No, I don't think we're seeing any demand changes between the AC and DC. I think what we're seeing is, you know, new products like the pantograph that Mansi mentioned, now in our portfolio, creating demand that wasn't there for us before on DC for the, you know, the ebus application.

Speaker Change: No I don't think were seeing any demand changes between the AC and DC I think what we're seeing is.

Speaker Change: New products like the pantograph that launch you mentioned now in our portfolio, creating demand that wasn't there for us before on D. C for the E bus applications.

Richard Wilmer: Okay. And then, I mean, I hate to beat this one to death a little bit here, but just kind of going back to, you know, the revenue cadence and some of the delays. And I guess, you know, I think you mentioned, you know, delays in product availability for, I guess, EV availability for customers and then site prep being ready on time. I guess, what gives you confidence that it's going to be there later this year in 2H? Do you have any, I guess, kind of firm visibility to, I guess, these sites being ready or the vehicles being delivered? So again, on the commercial side, we're still

Speaker Change #100: Got it okay.

Speaker Change #101: And then.

Speaker Change #102: I mean I hate to beat this one to death, a little bit here, but just kind of going back to.

Speaker Change #103: The revenue cadence and some of the delays and I guess I think I think you mentioned it.

Speaker Change #104: Delays in product.

Speaker Change #104: Product availability for I guess <unk> availability for customers and then and then site prep.

Speaker Change #105: Being ready on time, I guess, what kind of gives you confidence that it's going to be there later this year.

Speaker Change #106: <unk> do you have any I guess kind of firming visibility too I.

Speaker Change #106: I guess these sites being ready or the vehicles being being delivered.

Christopher J. Dendrinos: So again, on the commercial side, we're starting to see this dislocation between vehicle delivery and the desire for our commercial customers to continue to expand or put chargers in their parking lots. And we don't see any reason for that trend to stop.

Speaker Change #107: So again on the commercial side, we're starting to see this dislocation between vehicle delivery and the desire for our commercial customers to continue to expand our pud charters in their parking lot and.

Speaker Change #107: We don't see any reason for that trend to discontinue.

Richard Wilmer: Another way to put it is, if you go to a local business in an area where there's reasonable EV penetration and not another EV was ever sold in that area, they would still make sure they had enough chargers in their parking lot to attract the audience of people in that area they care about that they want to come to that building. So I think that's good news for us. On the other hand, I think you're seeing some really exciting product offerings either announced or coming this year on the passenger vehicle side.

Speaker Change #107: Another way to put it is if you go to a local business and an area where there is reason to believe your penetration.

Speaker Change #107: Not another <unk> was ever sold in that area. They would still make sure. They had enough chargers in their parking lot to attract the audience of people in that area. They care about that they want to come to that building. So I think thats. Good news for us on the other hand, I think youre seeing some really exciting product offerings, either announced or coming this year.

Speaker Change #107: On the passenger vehicle side Ive seen some really cool vehicles in our parking lot recently that have.

Richard Wilmer: I've seen some really cool vehicles in our parking lot recently that have just come onto the market, so I'm optimistic about that. On the fleet vehicle side, I personally don't have any statistics on forecasted delivery for fleet vehicles. But anecdotally, for any of us that were at the ACT Expo in Las Vegas a couple of weeks ago, just the sheer breadth of selection and vehicles that are in production and available for fleets was very impressive. So it's based on that anecdotal observation, having personally been to ACT, I think it looks like the fleet vehicles are coming.

Speaker Change #107: Just come onto the market, so I'm optimistic about that on the on the fleet vehicle side.

Speaker Change #108: We don't have any statistics on forecasted delivery for fleet vehicles, but anecdotally for any of US that we're at the Act Expo in Las Vegas, a couple of weeks ago, just the sheer breadth of selection and vehicles that are in production available.

Speaker Change #108: Four fleets was very impressive so it's based on that anecdotal observation, having personally better Act I think.

Speaker Change #108: It looks like the fleet deals vehicles are coming.

Speaker Change #109: Got it thank you.

Craig Irwin: Your next question comes from the line of Craig Irwin with Roth MKM. Please go ahead.

Speaker Change #110: Your next question comes from the line of Craig Irwin with Roth MK M. Please go ahead.

Richard Wilmer: Good evening and thanks for taking my questions. So Rick, several times on this call you've expressed confidence in the rebound in revenue, the rebound in outlook for the second half, and you know, I commend the focus on achieving positive EBITDA before the end of the year, but when we look at your guidance for the July quarter, the second fiscal quarter, 108 to 118, at the midpoint you're down 25% year-over-year, which is a deterioration from 18% contraction in the January quarter, or sorry, the April quarter.

Speaker Change #111: Good evening and thank you for taking my questions. So Rick several times on this call you've expressed confidence in the.

Speaker Change #112: The rebound in revenue rebounded outlook for second half and I commend the focus on on achieving positive EBITDA before the end of the year, but when we look at your guidance for the.

Speaker Change #112: The July quarter, the second fiscal quarter, one 2018.

Speaker Change #113: At the midpoint, you're down 25% year over year, which is a deterioration from 18% contraction in the January quarter, I'm, sorry, the April quarter.

Richard Wilmer: Can you maybe reconcile for us this modest deterioration as far as what you're giving us for an outlook versus what you expect to come together in the back end of the year? Is there a small piece that's maybe moving around on some of this political uncertainty or some of the customers recalibrating with Tesla, or exiting the market? You know, any color there would be.

Speaker Change #114: Can you maybe reconcile for us this modest deterioration as far as what Youre, giving us for an outlook versus what you would expect to come together in the back end of the year is there is that small piece that's may be moving around on some of this political uncertainty or some of the customers recalibrating with Tesla exiting.

The market.

Speaker Change #115: Any color there would be helpful.

Mansi Khetani: I can take that, Craig. So, you know, in terms of guidance for Q2, we are being prudent in our guidance because the macro overhang still exists. In Q2, while we're seeing signs of the environment improving in our pipeline build, the RFP volume and RFP success rate internally within the business does give us confidence for the second half. But in Q2, we're still seeing some of the overhang. And so, you know, we're doing that, I think, by being prudent in our guidance. Okay, excellent.

Speaker Change #116: Yeah, I can take that Craig.

Speaker Change #117: So in terms of guidance for Q2, we are being prudent in our guidance because the macro overhang still exist into July we're seeing signs of the environment improving pipeline build.

Speaker Change #117: RFP volume in RFP success rate.

Speaker Change #117: Internally within the business does gives us confidence for the second half, but in Q2 were still seeing some of the overhang until.

Speaker Change #117: The thing that I think by being prudent in our guidance.

Craig Irwin: Okay, excellent. And then, you know, my follow-up question is regarding fleet specifically. So, can you maybe give us some color on whether or not utility work and site preparation is important and essential for you to recognize revenue? If we see some of these very large fleet customers move forward with expanding installations towards the end of the year, you know, a number of them have used ChargePoint in the past, will this potentially be a deciding factor?

Speaker Change #118: Okay excellent and then.

Speaker Change #119: My follow up question is regarding fleet specifically so.

Speaker Change #120: Can you maybe give us color on whether or not utility work and site preparation.

Speaker Change #121: <unk> is important and essential tree to recognize revenue.

Speaker Change #121: If we see some of these very large fleet customers.

Speaker Change #121: Move forward with the expanding installations towards the end of the year.

Speaker Change #122: A number of them have used charge point in the past.

Will this potentially be a gating factor for you.

Yeah.

Speaker Change #122: Okay.

Richard Wilmer: I don't know if I'd consider it a gaining factor, but it is a factor that dictates the timing of deployment and, therefore, revenue. There's no question that fleet customers that are undergoing significant construction try and time the delivery of the charging gear with the completion of the site construction work. So we are, you know, our revenue and our shipping are dictated by that to a certain extent. So that's the way it is in this industry. And we work with that, and we make our, you know, we build our forecasts on that factual information.

Speaker Change #123: I hope I consider it a gating factor it is a factor that dictates the timing of deployment and therefore revenue.

Speaker Change #123: There's no question that fleet customers that are undergoing significant construction.

Speaker Change #123: Try and time the delivery of the charging gear with the completion of the site construction work. So we are.

Speaker Change #123: Our revenue and our shipping is dictated by that to a certain extent.

Speaker Change #123: So that's the way it is in this industry and we work with that and we make our we build our forecasts on that factual information.

Craig Irwin: Thank you for that. Well, congratulations on the progress with the cost reduction.

Speaker Change #124: Thank you for that well congratulations on the progress with the cost reductions.

Greg: Thanks, Greg.

Operator: That concludes our question and answer session. And with that, that does conclude today's conference call. Thank you for your participation, and you may now disconnect.

Speaker Change #126: That concludes our question and answer session and with that that does conclude today's conference call. Thank you for your participation and you may now disconnect.

Speaker Change #126: Yeah.

Speaker Change #126:

Speaker Change #126: Hmm.

Speaker Change #126: