Q2 2025 ChargePoint Holdings Inc Earnings Call

Ladies and gentlemen, good afternoon. My name is Abby and I will be your conference operator for today's call.

Operator: Conference operator for today's call.

Operator: At this time, I would like to welcome everyone to the ChargePoint second quarter fiscal 2025 earnings conference call and webcast. All participant lines have been placed in listen-only mode to prevent any background noise.

Speaker Change: At this time, I would like to welcome everyone to the Charge Point Second Quarter fiscal 2025 earnings conference call and webcast.

Speaker Change: All participant lines have been placed in listen only mode to prevent any background noise.

Operator: After the speaker's remarks, there will be a question-and-answer session.

Patrick Hamer: And 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 Hamer: After the speakers' remarks, there will be a question and answer session. And I would now like to turn the call over to Patrick Hamer, Charge Point 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 second quarter fiscal 2025 earnings results. This call is being webcast and can be accessed on the investor section of our website at investors.chargpoint.com. With me on today's call, are Rick Wilmer, our Chief Executive Officer, and Mansi Khetani, our Chief Financial Officer.

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

Speaker Change: With me on today's call, a Rick Wilmer, our chief executive officer, and Mansi Khetani, our chief financial officer.

Patrick Hamer: This afternoon, we issued our press release announcing results for the quarter ended July 31, 2024, which can 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 third 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. 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.

Speaker Change: This afternoon, we issued our press release announcing results for the quarter ended July 31, 2024, which can 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 third quarter of fiscal 2025.

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

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

Speaker Change: For a more detailed description of certain factors that could cause actual results to differ, please refer to our form 10Q, filed with the SEC on June 6, 2024, and are earnings released posted today on our website and filed with the SEC on Form 8K.

Patrick Hamer: Please refer to our Form 10-Q filed with the SEC on June 6, 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. We reconcile to gap in our earnings release, and for certain historical periods in the investor presentation posted on the investor section of our website.

Speaker Change: Also, please note that we use certain non-gap financial measures on this call. We reconcile to gap in our earnings release and for certain historical periods in the investor presentation posted on the investor section of our website.

Patrick Hamer: And finally, we'll be posting the transcript of this call to our Investor Relations website under the Quarterly Results section.

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

Rick Wilmer: And with that, I'll turn it over to Rick. Hello, everyone, and welcome to ChargePoint's second quarter fiscal 2025 earnings call. Today, I will provide business and market updates, walk through key financial results for the quarter, and share the progress we have made across the four areas of focus.

Rick Wilmer: Hello everyone, and welcome to Charge Points, second quarter fiscal 2025 earnings call. Today I will provide business and market updates, walk through key finance results for the quarter, and share the progress we have made across the four areas of focus.

Rick Wilmer: I will then give a chronological overview of our plan. I will begin with some news to improve our operational efficiency and right-size our business for market conditions. We have reduced our non-GAAP operating expense by an estimated $38 million on an annualized basis. We are reducing our head count by approximately 15% and trimming non-personal expenses in all areas of the company, with the majority of reductions in sales and marketing. This is an offensive move. These reductions will enable us to move faster by streamlining operations. For example, we are flattening the sales and marketing organization, increasing speed and focus, and maximizing resources directly related to revenue generation.

Rick Wilmer: I will then give a chronological overview of our plan.

Rick Wilmer: And we'll begin with some news. To improve our operational efficiency and right-sized our business from market conditions, we have reduced our non-gap operating expense by an estimated $38 million on an annualized basis.

Rick Wilmer: We are reducing our head count by approximately 15%, and trimming non-personal expenses in all areas of the company with the majority of reductions in sales and marketing.

Operator: Conference Operator for today's call. At this time, I would like to welcome everyone to the ChargePoint's second quarter fiscal 2025 earnings conference call and webcast. All participant lines have been placed in listen only mode to prevent any background noise.

Speaker Change: This is an offensive move.

Speaker Change: These reductions will enable us to move faster by streamlining operations.

Speaker Change: For example.

Speaker Change: We are flattening the sales and marketing organization, increasing speed and focus and maximizing resources to quickly related to revenue generation.

Operator: After the speakers remarks, there will be a question and answer session.

Rick Wilmer: We have done this successfully in the past, cutting almost 90 million of annualized non-GAAP op-ax from a high point of 89 million in Q2 of last year to 66 million in Q2 of this year. Streamlining our resources while accelerating our product roadmap. All these changes enhance our core go-to-market and innovation capabilities to keep us dominant when the market returns. We are seeing green shoots already. Sales of passenger EVs have settled into a stable, predictable growth path, a clear sign of sustainable adoption. In Q2, OEM slashed US lease prices to clear the way for 2025 models.

Patrick Hamer: And 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. Good afternoon, and thank you for joining us on today's conference call to discuss ChargePoint's second quarter fiscal 2025 earnings results. This call is being webcast and can be accessed on the investor section of our website at investors.chargePoint.com. With me on today's call, our Rick Wilmer, our chief executive officer, and Mansi Khetani, our chief financial officer.

Speaker Change: We have done a successfully in the past, cutting almost 90 million of annualized non-gap Opx from a high point of 89 million in Q2 of last year to 66 million in Q2 of this year.

Speaker Change: Streamlining our resources while accelerating our product roadmap.

Speaker Change: All these changes enhance our core go-to-market and innovation capabilities to keep us dominant when the market returns.

Speaker Change: We are seeing green shoots already. Sales of passenger EVs have settled into a stable, predictable growth path, a clear sign of sustainable adoption.

Patrick Hamer: This afternoon, we issued our press release announcing results for the quarter ended July 31, 2024, which can 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 third 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: In Q2, OEM slashed U.S. lease prices to clear the way for 2025 models.

Rick Wilmer: These aggressive price cuts triggered a surge, with sales jumping 23% over Q1 and climbing 11% year over year, putting many drivers behind the wheel of an electric vehicle for the first time. When the 2025 models hit the market in the coming months, boasting superior specs and broader selection, EV momentum is only going to accelerate. JD Power's latest data says that 24% of shoppers now are very likely to go electric for their next vehicle. Plug-in hybrid sales were up 59% in the first half of the year, underscoring the critical role of charging of a structure, which is a huge win for ChargePoint.

Speaker Change: These aggressive price cuts triggered a surge with CO723% over Q1 and climbing 11% year-over-year. Putting many drivers behind the wheel of an electric vehicle for the first time.

Speaker Change: When the 20-25 models hit the market in the coming months, posting superior steps and broader selection, eating momentum is only going to accelerate. GD power's latest data says that 24% of shoppers now are very likely to go electric for their next vehicle.

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 10Q filed with the SEC on June 6, 2024, and our earnings release posted today on our website and filed with the SEC on form 8K. Also, please note that we use certain non-gap financial measures on this call. We reconcile to gap in our earnings release, and for certain historical periods in the investor presentation posted on the investor section of our website.

Speaker Change: Plugin hybrid sales for up 59% in the first half of the year, underscoring a critical role of charging a miscrupture, which is a huge win for charge point.

Rick Wilmer: Transitioning to the second quarter, we delivered as promised. Q2 revenue was 109 million within our stated guidance range. Non-GAAP gross margins continued to improve for the third consecutive quarter, coming at 26% for Q2. This is the highest our gross margin has been in nearly three years, and we expect continued improvement as we transition manufacturing to lower cost locations. What kept us from the high side of Q2 guidance was fleet, where a number of sales pushed due to external factors, including delayed permitting, construction, and switch gear delivery. However, we do expect improvement in this area as we are on pace to double our fleet opportunities this year.

Speaker Change: Transition to the second quarter, we delivered as promised, 22 revenue was 109 million within our state's guidance range.

Speaker Change: Non-Gapfros margins continue to improve for the third consecutive quarter, coming in at 26% for Q2. This is the highest our gross margin has been in nearly three years, and we expect continued improvement as we transition manufacturing to lower cost locations.

Patrick Hamer: And finally, we'll be posting the transcript of this call to our investor relations website under the quarterly results section.

Rick Wilmer: And with that, I'll turn it over to Rick. Hello, everyone, and welcome to ChargePoint's second quarter of fiscal 2025 earnings call. Today, I will provide business and market updates, walk through key financial results for the quarter, and share the progress we have made across the four areas of focus. I will then give a chronological overview of our plan. I will begin with some news.

Speaker Change: But kept us from the high side of Q2 guidance with sleep, for a number of large deals pushed due to external factors, including delayed permitting, construction, and switch gear delivery.

Speaker Change: However, we do expect improvement in this area as we are on-face to double our fleet opportunities this year.

Rick Wilmer: To improve our operational efficiency and right size of our business for market conditions, we have reduced our non-gap operating expense by an estimated $38 million on an annualized basis. We are reducing our headcount by approximately 15 percent and trimming non-personal expenses in all areas of the company with the majority of reductions in sales and marketing. This is an offensive move. These reductions will enable us to move faster by streamlining operations. For example, we are flattening the sales and marketing organization, increasing speed and focus and maximizing resources directly related to revenue generation.

Rick Wilmer: ChargePoint remains the platform of choice for all types of customers to build their businesses, including auto-aliams. Recent customers include our work with Porsche; we're building the Porsche Charging Services owner app on ChargePoint's platform. Our successful partnership with the Hyundai Motor Group has expanded from its namesake to the Genesis brand. They join our roster of more than a dozen auto-alias who have selected ChargePoint as the platform of choice to build their charging businesses. In municipal transit, we now partner with a more bus who will integrate our software and telematics directly into Mercedes-Benz and Cetra branded buses.

Speaker Change: Charged Point remains a platform of choice for all types of customers to build their businesses, including auto audience.

Speaker Change: Recent customer wins include our work with Torsha, who are building the Torsha Charging Services on our app on Charge Point platform.

Speaker Change: Our successful partnership with the Hyundai Motor Group has expanded from its namesake to the Genesis brand.

Speaker Change: They join a roster of more than a dozen auto-OEMs who have selected Charge Point as the platform of choice to build their charging businesses.

Speaker Change: In Municipal Transit, we now partnered with Daymode Bus.

Rick Wilmer: We have done this successfully in the past, cutting almost 90 million of annualized non-gap op-ax from a high point of 89 million in Q2 of last year to 66 million in Q2 of this year. Streamlining our resources while accelerating our product roadmap. All these changes enhance our core go-to-market and innovation capabilities to keep us dominant when the market returns. We are seeing green shoots already. Sales of passenger EVs have settled into a stable predictable growth path, a clear sign of sustainable adoption.

Speaker Change: will integrate our software and telematics directly into Mercedes-Benz and set for branded buses.

Rick Wilmer: This many vehicle manufacturers choosing ChargePoint is a testament to our software platform leadership. A particular bright spot is municipal transit fleet, but the OEMs and the fleet operators of these vehicles are customers, building our business at multiple points in the ecosystem.

Speaker Change: This many vehicle manufacturers choosing Characters Point is a test in it to our software platform leadership.

Speaker Change: A particular bright spot is municipal transit sleep.

Speaker Change: The OEMs and the fleet operators of these vehicles are customers, building our business and multiple points in the ecosystem.

Rick Wilmer: Lastly, here are a few non-financial metrics of note. Our managed port count continues to grow, now at approximately 315,000. DC port growth was nearly 10 percent for the quarter, up to nearly 30,000. With roaming, we offer more than 1.1 million places to charge worldwide, up more than 10 percent in the last quarter, thanks to great partnership for. driver growth is critical to our growth, and we now have 1.2 million quarterly active users, a 20% increase from our 1 million milestone late last year. We now count 76% of the Fortune 50 companies as customers.

Speaker Change: Lastly, here are a few non-financial metrics of note. Our managed fork count continues to grow now at approximately 315,000.

Rick Wilmer: In Q2, OEM slashed US lease prices to clear the way for 2025 models. These aggressive price cuts triggered a surge with sales jumping 23% over Q1 and climbing 11% year-over-year, putting many drivers behind the wheel of an electric vehicle for the first time. When the 2025 models hit the market in the coming months, boasting superior specs and broader selection, EV momentum is only going to accelerate. JD Powers' latest data says that 24% of shoppers now are very likely to go electric for their next vehicle. Plug-in hybrid sales were up 59% in the first half of the year, underscoring the critical role of charging of a structure which is a huge win for ChargePoint.

Speaker Change: DC Port Group was nearly 10% for the quarter up to nearly 30,000.

Speaker Change: With Romano, we offer more than 1.1 million places to charge worldwide, up more than 10% in the last quarter, thanks to great partnership work.

Speaker Change: Driver Growth is critical to our growth, and we now have 1.2 million quarterly active users of 20% from a 1 million milestone late last year.

Speaker Change: We now count 76% of the Fortune 50 companies as customers.

Rick Wilmer: Now let me turn to our strategic cornerstones, which are our open modular software platform, our innovative approach to hardware development, and our commitment to world-class driver experiences. And operational excellence in software charge point is at the forefront of the charging innovation. We recently partnered with LG, a leader in technology, to bring their hardware onto our charging platform. This partnership aims to expand our reach into smart home solutions, solar integration, and battery storage areas where LG excels. By working together, we will not only strengthen our technology, but also boost sales from both companies, submitting ChargePoint as a key player in the growing EV market.

Speaker Change: Now let me turn to our strategic cornerstones, which are our open modular software platform, our innovative approach to hardware development, our commitment to world-class driver experiences and operational excellence.

Rick Wilmer: Transitioning to the second quarter, we delivered as promised Q2 revenue was 109 million within our stated guidance range. Non-gap growth margins continued to improve for the third consecutive quarter, coming in at 26% for Q2. This is the highest our growth margin has been in nearly three years, and we expect continued improvement as we transition manufacturing to lower cost locations. What kept us from the high side of Q2 guidance was fleet where a number of large deals pushed due to external factors, including delayed permitting, construction, and switch gear delivery.

Speaker Change: in software charge point is that the forefront of the charging innovation.

Speaker Change: We recently partnered with LG, a leader in technology to bring their hardware onto our charging platform.

Speaker Change: This partnership aims to expand our reach into smart-home solutions, solar integration and battery storage. Areas where LG excels.

Speaker Change: By working together, we will not only strengthen our technology but also boost sales from both companies, submitting charge point as a key player in the growing EV market.

Rick Wilmer: In hardware, this August we introduced Omniport, a game-changing connector solution that works with both NAX and CCS charging ports. The central for millions of EVs that need a CCS port and the increasing number switching over to NAX, Omniport is designed for simplicity. It automatically selects the right connector for your car to our app or lets you choose on screen when paying by car. Available for both AC and DC chargers, Omniport, developed in collaboration with our co-development partners, will begin shipping later this year. It ends the connector confusion for all who choose ChargePoint, making Omniport the go-to choice for station owners.

Speaker Change: In hardware, this August we introduced OmniPort, a game-changing connector solution that works with both anax and CCS charging ports.

Rick Wilmer: However, we do expect improvement in this area as we are on pace to double our fleet opportunities this year. ChargePoint remains the platform of choice for all types of customers to build their businesses, including auto-OEMs. Recent customer wins include our work with Porsche, we're building the Porsche Charging Services owner app on ChargePoint's platform. Our successful partnership with the Hyundai Motor Group has expanded from its namesake to the Genesis brand. They join our roster of more than a dozen auto-OEMs who have selected ChargePoint as the platform of choice to build their charging businesses.

Speaker Change: The central for millions of EVs that need a CCS port and the increasing number switching over to NACs, only port is designed for simplicity. It automatically selects the right connector for your car to our app, or lets you choose on-screen when paying by car.

Speaker Change: available to both AC and DC Chargers, Omniport, developed in collaboration with our Code of Development Partners, will begin shipping later this year. It ends the Connector Confusion for all who choose Charge Point, making Omniport the go-to choice for station owners.

Rick Wilmer: In Q2, we launched Europe's first payment terminal to meet the latest OCPI industry standards and comply with the recently instated EU regulations. This terminal leverages an open software architecture, enabling it to work with over 50 makes of charging hardware. Both our co-development partners, W and CNAC Bell, are actively working on products that we expect will launch next year. Supporting the second phase of our strategic plan, exciting is the only word I can use to describe these future innovations. Driver experience remains central to our strategy. We're focused on making the charging experience as smooth as possible for drivers.

Rick Wilmer: In municipal transit, we now partner with a more bus who will integrate our software and telematics directly into Mercedes-Benz and set for branded buses. This many vehicle manufacturers choosing ChargePoint is a testament to our software platform leadership. A particular bright spot is municipal transit fleet, but the OEMs and the fleet operators of these vehicles are customers, building our business at multiple points in the ecosystem.

Speaker Change: Thanks for watching!

Speaker Change: In Q2, we launched Europe's first payment terminal to meet the latest OCPI industry standards and comply with the recently-instated EU regulations.

Speaker Change: This terminal leverages an open software architecture enabling it to work with over 50 makes of charging hardware.

Speaker Change: Both our code development partners, WNC and Act Bell are actively working on products that we expect to launch next year.

Speaker Change: Supporting the second phase of our strategic plan, exciting is the only word I can use to describe these future innovations.

Rick Wilmer: Lastly, here are a few non-financial metrics of note. Our managed port count continues to grow now at approximately 315,000. DC port growth was nearly 10 percent for the quarter up to nearly 30,000. With roaming, we offer more than 1.1 million places to charge worldwide, up more than 10 percent in the last quarter thanks to great partnership Driver Growth is critical to our growth and we now have 1.2 million quarterly active users of 20% from our 1 million milestone late last year. We now count 76% of the Fortune 50 companies as customers.

Speaker Change: Driver Experience remains central to our strategy.

Speaker Change: We're focused on making the charging experience as smooth as possible for drivers.

Rick Wilmer: We have recently deployed AI technology to quickly diagnose and fix station issues. If a driver reports a hardware problem with our app, AI analyzes images to identify the issue, often without needing a site visit. This approach reduces downtime and ensures our stations are reliable, solving one of the biggest challenges in our industry.

Speaker Change: We are recently deployed AI technology to quickly diagnose and fix station issues.

Speaker Change: If a driver reports a hardware problem with our app, AI analyzes images to identify the issue, often without needing a safe visit.

Speaker Change: This approach reduces downtime and ensures our stations are reliable, so we want the biggest challenges in our industry.

Rick Wilmer: Touching on the last area of strategic focus, operational accidents continue to deliver consistent and impactful improvements for ChargePoint. Group points can be found in the Q2 results, such as our gross margin, which delivered a third straight quarter improvement. The margin growth has been consistent and healthy, thanks to our relentless focus on operational excellence. with the adjustments to the business bearing fruit across operations R&D and product.

Speaker Change: Touching on the last area of strategic focus, operational accidents continues to deliver consistent and impactful improvements for charge point.

Rick Wilmer: Now let me turn to our strategic cornerstones, which are our open modular software platform, our innovative approach to hardware development, our commitment to world class driver experiences, experiences, and operational excellence. In software, ChargePoint is at the forefront of charging innovation. We recently partnered with LG, a leader in technology to bring their hardware onto our charging platform. This partnership aims to expand our reach into smart home solutions, solar integration and battery storage areas where LG excels by working together. We will not only strengthen our technology, but also boost sales from both companies, submitting ChargePoint as a key player in the growing EV market.

Bruce: Bruce points can be found in the Q2 results, such as our gross margin, which delivered a third straight quarter improvement.

Bruce: The margin growth has been consistent and healthy thanks to our relentless focus on operational excellence.

Bruce: with the adjustments to the business bearing fruit across operations R&D and product.

Rick Wilmer: We tie all these pillars into our three-year plan. Phase one, wrapping up by January 31st, 2025, is all about laying the foundation. We're finalizing our leadership team, providing our product roadmap, right sizing, and ensuring operational excellence. We are planning to hire a CRO with the search nearly complete, and we will be fully prepared to scale.

Bruce: We take all these pillars into our three-year plan.

Bruce: Phase 1, wrapping up by January 31, 2025, is all about laying the foundation.

Bruce: We're finalizing our leadership team, revising our product, roadmap, right-sizing and ensuring operational excellence.

Bruce: We are planning to hire a CRO with a search-neular complete.

Rick Wilmer: In hardware, this August we introduced Omniport, a game-changing connector solution that works with both NAX and CCS charging ports. The central for millions of EVs that need a CCS port and the increasing number switching over to NAX, Omniport is designed for simplicity. It automatically selects the right connector for your car to our app, or lets you choose on screen when paying by car. Available for both AC and DC chargers, Omniport developed in collaboration with our co-development partners will begin shipping later this year. It ends the connector confusion for all who choose ChargePoint, making Omniport the go-to choice for station owners.

Rick Wilmer: In fiscal 2026, we shift to focusing on aggressive growth, driven by the launch of next-gen software and hardware. Success here means steadily improving our adjusted EBITDA each quarter with refinements along the way. We anticipate becoming adjusted EBITDA positive during the next fiscal year. In fiscal 2027, we're focused on maximizing the benefits of our operational excellence and innovative product portfolio; the result, significant cash flow. The plan is designed for scalable growth and long-term profitability. When the market conditions improve, we will be ready to scale, and despite market conditions, we will continue to improve in the interim.

Bruce: and we will be fully prepared to scale.

Bruce: In fiscal 2026, we shift to focusing on aggressive growth.

Bruce: through them by the launch of next gen software and hardware. Success here means steadily improving our adjusted EBITDA each quarter, which refinements along the way. We anticipate becoming adjusted EBITDA positive during the next fiscal year.

Bruce: In fiscal 2027, we're focused on maximizing the benefits of our operational excellence and an innovative product portfolio. The results, significant cash flow.

Bruce: The plan is designed for scalable growth and long-term profitability.

Bruce: When the market conditions improve, we will be ready to scale and despite market conditions, we will continue to improve in the interim. We remain at P-Liter in EV charging.

Rick Wilmer: In Q2, we launched Europe's first payment terminal to meet the latest OCPI industry standards and comply with the recently instated EU regulations. This terminal leverages an open software architecture, enabling it to work with over 50 makes of charging hardware. Both our co-development partners, WNC and ActBell, are actively working on products that we expect to launch next year. Supporting the second phase of our strategic plan, exciting is the only word I can use to describe these future innovations.

Rick Wilmer: We remain the leader in EBITDA charging.

Rick Wilmer: Last, but certainly not least, I would like to offer my thanks to our employees, both current and former, that helped us to get where we're at today. Without them, neither charge point nor our industry would be poised for the future success we expect.

Bruce: Last but certainly not least, I would like to offer my thanks to our employees, both current and former, that helped us to get where we're at today.

Bruce: Without them neither charge point nor our industry would be poised for the future success we expect.

Mansi Khetani: Thank you for your time, and I will now hand over the call to our CFO, Monty. Thanks, Rick. As a reminder, the numbers I will cover today are non-GAAP. So please see our earnings release where we reconcile our non-GAAP results to GAAP. Revenue for the quarter was 109 million, consistent with our guidance range of 108 to 118 million. This was 1% higher sequentially and 28% lower year-on-year due to lower hardware revenue. Network charging systems at 64 million accounted for 59% of second quarter revenue. This was down 2% sequentially and down 44% year-on-year. Subscription revenue at 36 million was 33% of total revenue, up 8% sequentially and up 21% year-on-year.

Bruce: Thank you for your time, and I will now hand over the call to our CFO Monty.

Monty: Thanks, Rick. As a reminder, the numbers I will cover today are non-gap. So please see our earnings release where we reconciled on non-gap results to gap.

Rick Wilmer: Driver experience remains central to our strategy. We're focused on making the charging experience as smooth as possible for drivers. We have recently deployed AI technology to quickly diagnose and fix station issues. If a driver reports a hardware problem with our app, AI analyzes images to identify the issue often without needing a site visit. This approach reduces downtime and ensures our stations are reliable, solving one of the biggest challenges in our industry.

Monty: Ready for the quarter with 109 million consistent with our guidance range of 108 to 118 million.

Speaker Change: This was 1% higher sequentially, and 28% lower your on your due to lower hardware revenue.

Speaker Change: Network Charging Systems at 64 million, accounted for 59% of second quarter revenue.

Rick Wilmer: Touching on the last area of strategic focus, operational excellence continues to deliver consistent and impactful improvements for ChargePoint. Proof points can be found in the Q2 results, such as our gross margin, which delivered a third straight quarter improvement. The margin growth has been consistent and healthy thanks to our relentless focus on operational excellence, with the adjustments to the business bearing fruit across operations R&D and product.

Speaker Change: This was down 2% sequentially and down 44% year-on-year.

Speaker Change: subscription revenue at 36 million was 33% of total revenue up 8% sequentially and up 21% year on year.

Mansi Khetani: Other revenue at 8 million was 8% of total revenue, flat sequentially and up 39% year-on-year.

Speaker Change: Other revenue at 8 million, worth 8% of total revenue, flat sequentially and up 39% year on year.

Mansi Khetani: Turning to verticals, we report verticals from a billings perspective. Second quarter billings percentages were Commercial 72%, Fleet 14%, Residential 10%, and Other 4%. Commercial benefited from increased nevy related shipments of our express plus DC fast charging products. Fleet saw continued push out of large deals due to construction delays. As a reminder, this is delayed business that we will be able to capture in future quarters. For a highly rated home product, continues to be a best seller, even though Q2 saw a seasonal dip in the links. From a geographic perspective, North America made up 80% of second quarter revenue, and Europe was at 20%, consistent with prior quarters.

Speaker Change: Turning to verticals, we report verticals from a building's perspective.

Rick Wilmer: We tie all these pillars into our three-year plan. Phase one, wrapping up by January 31st, 2025, is all about laying the foundation. We're finalizing our leadership team, providing our product roadmap, right sizing, and ensuring operational excellence. We are planning to hire a CRO with the search nearly complete, and we will be fully prepared to scale.

Speaker Change: Second quarter of the linked percentages were commercial 72%, fleet 14%, residential 10% and other 4%.

Speaker Change: Commercial benefited from increased Navy-related shipments of our Express Plus DC fast charging products.

Speaker Change: Sleep, so continue push out of large deals due to construction delays.

Speaker Change: As an reminder, this is delayed business that we will be able to capture in future quarters.

Rick Wilmer: In fiscal 2026, we shift to focusing on aggressive growth, driven by the launch of next-gen software and hardware. Success here means steadily improving our adjusted EBITDA each quarter, with refinements along the way. We anticipate becoming adjusted EBITDA positive during the next fiscal year. In fiscal 2027, we're focused on maximizing the benefits of our operational excellence and innovative product portfolio, the result, significant cash flow. The plan is designed for scalable growth and long-term profitability. When the market conditions improve, we will be ready to scale, and despite market conditions, we will continue to improve in the interim. We remain VLiter in EBITDA charging.

Speaker Change: Our highly rated home products continue to be a bestseller, even though Q2 saw a seasonal dip in the links.

Speaker Change: From a geographic perspective, North America made up 80% of second quarter revenue, and your growth was a 20% consistent with prior quarters.

Mansi Khetani: Turning to growth margin, non-GAAP growth margin for second quarter was 26% of sequentially from 24% in Q1. Growth margin was up 23% of points as compared to Q2 last year, a quarter that was impacted by the inventory impairment charge. The sequential improvement was largely due to improved hardware margins, resulting from ongoing reduction in replacement parts costs lowering warranty expenses, and improved subscription margins, resulting from continued optimization of support costs, as well as a larger mix of higher margin subscription revenue with an overall revenue. Non-GAAP operating expenses for Q2 were 66 million, a decrease of 25% from 89 million in Q2 last year and flat sequentially.

Speaker Change: Turning to gross margin, Dawn Jack Gross margin for second quarter, with 26% of sick ventually from 24% in Q1.

Dawn Jack: Gross Martin was up 23 percentage points as compared to Q2 last year, a quarter that was impacted by the inventory impairment charge.

Speaker Change: The sequential improvement was largely due to improved hardware margins resulting from ongoing reduction in replacement parts costs lowering warranty expenses and improved subscription margins resulting from continued optimization of support costs.

Rick Wilmer: Last, but certainly not least, I would like to offer my thanks to our employees, both current and former, that helped us to get where we're at today. Without them, neither charge point, nor our industry would be poised for the future success we expect.

Speaker Change: as well as a larger mix of higher margins subscription revenue with an overall revenue.

Speaker Change: Non-Gap operating expenses for Q2 were 66 million a decrease of 25% from 89 million in Q2 last year and flat sequentially.

Mansi Khetani: Thank you for your time, and I will now hand over the call to our CFO Monty. Thanks, Rick. As a reminder, the numbers I will cover today are non-GAP. So please see our earnings release where we reconcile our non-GAP results to GAP. Revenue for the quarter was 109 million, consistent with our guidance range of 108 to 118 million. This was 1% higher sequentially and 28% lower year-on-year due to lower hardware revenue.

Mansi Khetani: Non-GAAP adjusted EBITDA loss for the second quarter was 34 million, a continued improvement as compared to a loss of 36 million in Q1, and a loss of 81 million in Q2 last year, which included the inventory impairment charge. Stock-based compensation in the second quarter was 19 million, down from 22 million in the first quarter, and down from 35 million year-on-year. In prior years, the second quarter has shown a set-up in stock-based comp due to an annual refresh of employee grants. This quarter's net decrease represents the impact of prior restructuring events. Inventory balance increased slightly in the quarter as expected.

Speaker Change: Now, on Gap, adjusted EBITDA loss for the second quarter, was 34 million, a continued improvement as compared to a loss of 36 million in Q1 and a loss of 81 million in Q2 of last year, which included the inventory impairment charge.

Speaker Change: Sovbez compensation in the second quarter was 19 million, down from 22 million in the first quarter and down from 35 million year on Europe. In prior years, the second quarter has shown a set-up in Sovbez cons due to an annual refresh of employee grants.

Mansi Khetani: Network charging systems at 64 million accounted for 59% of second quarter revenue. This was down 2% sequentially and down 44% year-on-year. Subscription revenue at 36 million was 33% of total revenue up 8% sequentially and up 21% year-on-year. Other revenue at 8 million was 8% of total revenue flat sequentially and up 39% year-on-year.

Speaker Change: This quarter's net decrease represents the impact of prior restructuring events.

Speaker Change: In my toy balance increased slightly in the quarter as expected.

Mansi Khetani: Our inventory is privately made up of finished goods and products that we are actively selling. We now expect this to decrease next year as we sell through the finished goods on hand. This will release a significant amount of working capital and free of cash. Looking at cash, we enter the quarter with 244 million, significantly better than our internal plans due to continued focus on cash management. Our 150 million revolving credit facility remains ungrown. We have no debt securities until 2028, and we have existing capacity on our ATM.

Speaker Change: Audimentary is privately made up of finished goods and products that we are actively sending. We now expect this to decrease next year as we serve through the finished goods on hand.

Mansi Khetani: Turning to verticals, we report verticals from a billing perspective. Second quarter, billing percentages were commercial 72%, fleet 14%, residential 10%, and other 4%. Commercial benefited from increased nevy related shipments of our express plus DC fast charging products. Fleet saw continued push out of large deals due to construction delays. As a reminder, this is delayed business that we will be able to capture in future quarter. For a highly rated home product, continues to be a best seller, even though Q2 saw a seasonal dip in the links.

Speaker Change: This will release a significant amount of working capital and freedom.

Speaker Change: Looking at cash, we ended the quarter with 244 million, significantly better than our internal plans due to continued focus on cash management.

Speaker Change: Our 150 million revolving credit facility remains on drawn. We have no debt securities until 2028 and we have existing capacity on our ATM.

Mansi Khetani: Turning to guidance, for the third quarter of fiscal 2025, we expect revenue to be 85 million to 95 million. Given current industry headwinds, we are being prudent in our guidance. While Q2 revenue was down 28 percent compared to prior year, Q3 is expected to be 18 percent lower at the midpoint of our guidance range as compared to Q3 of last year. Looking ahead, we expect Q2 to be the bottom of the trough in terms of year-over-year growth, barring seasonality.

Speaker Change: Turning to guidance, but the third quarter of fiscal 2025, we expect revenue to be 85 million to 95 million.

Speaker Change: Given current industry heavens, we are being prudent in our guidance.

Mansi Khetani: From a geographic perspective, North America made up 80% of second quarter revenue and Europe was at 20% consistent with prior quarters. Turning to Gross Margin, Dawn Gap Gross Margin for second quarter was 26% of sequentially from 24% in Q1. Gross Margin was up 23% points as compared to Q2 last year, a quarter that was impacted by the inventory impairment charge. The sequentially improvement was largely due to improved hardware margins, resulting from ongoing reduction in replacement part costs lowering warranty expenses and improved subscription margins, resulting from continued optimization of support costs, as well as a larger mix of higher margin subscription revenue with an overall revenue.

Speaker Change: While Q2 revenue was down 28% compared to prior year, Q3 is expected to be 18% lower and the midpoint of our guidance range is compared to Q3 of last year.

Speaker Change: Looking ahead, we expect Q2 to be the bottom of the trough in terms of year-over-year growth, barring

Mansi Khetani: So we don't typically guide on operating expenses. Given the reorganization announced today, we wanted to help reset. With an annualized reduction of approximately 38 million of non-GAAP operating expenses, we expect non-GAAP operating expenses to be in the low 60 million in Q3 and to reduce further in Q4, when we will see the full quarter impact of the reductions. About 50% of the reductions are in sales and marketing, with the remainder split between R&D and GNA. We have pre-lining functions and becoming more efficient across the company. We are focusing on leveraging the channel, eliminating redundancies with fewer people touching every deal while increasing the mix of quota-bearing reps.

Speaker Change: So, we don't typically guide on operating expenses, given the reorganization announced today, we wanted to have reset everyone to a new level for the remainder of this year.

Speaker Change: With an annualized reduction of approximately 38 million of non-gap operating expenses, we expect non-gap operating expenses to be in the low 60 million in Q3 and to reduce further in Q4 when we will see the full quarter impact of the reductions.

Speaker Change: About 50% of the reductions are in sales and marketing, with the remainder split between R&D and DNA.

Mansi Khetani: Dawn Gap operating expenses for Q2 were 66 million, a decrease of 25% from 89 million in Q2 last year and flat sequentially. Dawn Gap adjusted even the loss for the second quarter was 34 million, a continued improvement as compared to a loss of 36 million in Q1 and a loss of 81 million in Q2 last year, which included the inventory impairment charge. Stock-based compensation in the second quarter was 19 million, down from 22 million in the first quarter and down from 35 million year on year.

Speaker Change: We are free in dining functions and becoming more efficient across the company. We are focusing on leveraging the channel, eliminating redundancies with few people touching every deal while increasing the mix of quota bearing reps.

Mansi Khetani: We are committed to being adjusted even up positives. The fourth quarter target previously laid out was dependent on modest revenue growth in a better macro backdrop. Despite the tough external environment, the steps we have taken to improve operational efficiencies will enable us to continue on the path to profitability by reducing our adjusted EBITDA loss sequentially, except for seasonally impacted quarters, as we reach adjusted EBITDA positives during fiscal year 2026.

Speaker Change: We are committed to being adjusted even a positive.

Speaker Change: The fourth border target previously laid out was defendants on modest revenue growth in a better macro backdrop.

Speaker Change: Despite the tough external environment.

Speaker Change: The steps we have taken to improve operational efficiencies will enable us to continue on the past to profitability but reducing our adjusted EBITDA loss sequentially.

Mansi Khetani: In prior years, the second quarter has shown a set up in stock-based comp due to an annual refresh of employee grants. This quarter's net decrease represents the impact of prior restructuring events. Inventory balance increased slightly in the quarter as expected. Our inventory is privately made up of finished goods and products that we are actively selling. We now expect this to decrease next year as we sell through the finished goods on hand.

Speaker Change: except for the newly impacted quarters, as we reach adjusted EBITDA for the yearning fiscal year 2020-6.

Mansi Khetani: In summary, we believe Q2 was the bottom for revenue growth and EBITDA loss, and we have guided prudently to Q3. We continue to invest in all the right areas of the business, and operationally, we put ourselves in a position to execute better and faster as the macro turns.

Speaker Change: In summary, we believe Q2 was the bottom for revenue growth and EBITDA loss, and we have guided to Q3.

Speaker Change: We continue to invest in all the right areas of the business and operationally we put ourselves in a position to execute better and faster as the macro turns.

Operator: With that, I will turn the call back to the operator for questions. Thank you, and we will now begin the question-and-answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your questions, simply press star 1 a second time.

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

Mansi Khetani: This will release a significant amount of working capital and free up. Looking at cash, we ended the quarter with 244 million, significantly better than our internal plans due to continued focus on cash management. Our 150 million revolving credit facility remains ungrown. We have no debt securities until 2028 and we have existing capacity on our ATM.

Speaker Change: Thank you, and we will now begin the question and answer session.

Speaker Change: If you would have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue.

Speaker Change: If you would like to withdraw your questions simply press star 1 a second time.

Operator: If you are called upon to ask your question and are listening via speaker phone on your device, please pick up your handset and ensure that your phone is not on you when asking your question.

Speaker Change: If you are called upon to ask your question and are listening to be a speaker phone on your device, please pick up your handset and ensure that your phone is not on you when asking your question.

Mansi Khetani: Turning to guidance for the third quarter of fiscal 2025, we expect revenue to be 85 million to 95 million. Given current industry headwinds, we are being prudent in our guidance. While Q2 revenue was down 28% compared to prior year, Q3 is expected to be 18% lower at the midpoint of our guidance range as compared to Q3 of last year. Looking ahead, we expect Q2 to be the bottom of the trough in terms of year-over-year growth barring seasonality.

Operator: To be able to take as many of your questions as possible, we ask that you please limit yourself to one question and one follow-up.

Speaker Change: To be able to take as many of your questions as possible, we ask that you please limit yourself to one question and one follow-up.

Colin Rusch: Again, press star 1 to join the queue, and your first question comes from the line of call and rush with Oppenheimer. Your line is open. Thanks so much, guys. I appreciate the incremental detail you're offering here.

Speaker Change: Again, press star one to join the queue.

Speaker Change: And your first question comes from the line of Colin Rush with Oppenheimer. Your line is open.

Mansi Khetani: Can you talk a little bit about the target revenue level to reach that EBITDA break even and how you see the existing inventory working off in your ability to reduce working capital along the way towards that break even level? Hi, Colin. I'll take that question.

Colin Rush: Thanks so much guys, and appreciate the incremental detail you're offering here. You talk a little bit about the target revenue level to reach that either dog break even, and how you see the existing inventory working off in your building to reduce working capital along the way towards that break even level.

Mansi Khetani: So we don't typically guide on operating expenses. Given the reorganization announced today, we wanted to help reset everyone to a new level for the remainder of this year. With an annualized reduction of approximately 38 million of non-gap operating expenses, we expect non-gap operating expenses to be in the low 60 million in Q3 and to reduce further in Q4 when we will see the full quarter impact of the reductions. About 50% of the reductions are in sales and marketing with the remainder split between R&D and GNA.

Mansi Khetani: I'll start with the second part, which is the inventory level. Based on our guide for Q3, based on the macro conditions that we would expect to be a lot better than the second half, which we're clearly not seeing now, we believe that inventory levels will stay high for the rest of the year, basically around the same as we are right now. This is kind of the peak, but I don't see it coming down this year. I believe that we should see some inventory balance coming down around Q1, Q2 around the little of next year, as we saw through the inventory on hand.

Speaker Change: Hi, Colin, I'll take that question. So I'll start with the second part.

Speaker Change: which is the inventory of levels.

Speaker Change: So based on our guide for Q3 based on the micro-conditions

Speaker Change: that we were expecting to be a lot better in the second half which we're clearly not seeing now. We believe that...

Speaker Change: You know, inventory levels will stay high for the rest of the jail, basically around the same as we are right now. This is kind of the peak, but I don't see it coming down this year.

Mansi Khetani: We have pre-lining functions and becoming more efficient across the company. We are focusing on leveraging the channel, eliminating redundancies with fewer people touching every deal while increasing the mix of quota bearing reps. We are committed to being adjusted even at a positive. The fourth quarter target previously laid out was dependent on modest revenue growth in a better macro backdrop. Despite the tough external environment, the steps we have taken to improve operational efficiencies will enable us to continue on the path to profitability by reducing our adjusted EBITDA loss sequentially, except for seasonally impacted quarters, as we reach adjusted EBITDA partners during fiscal year 2026.

Speaker Change: I believe that we should see some inventory balance coming down, I don't want you to or on the love next year as we sell through the inventory on hand.

Mansi Khetani: On the second part of your question, which was related to the revenue level needed for adjusted EBITDA breakeven, which we've now guided or targeting to get to next year. So few thoughts here. So this year, as you mentioned, was about focusing on improving efficiency and operational excellence, and next year, we're focusing on returning to revenue growth. So we've made significant changes to our cost structure, as you saw today, and we will continue to look for efficiencies to continue to bring our tax down. That's one part. On the margins, we expect margin improvements to be realized next year as we start seeing the benefit of our Asia manufacturing and improve subscription margins.

Speaker Change: On the second part of your question, which was related to the revenue levels needed for a justice event of the event which we've now guided or targeting to get to next year.

Speaker Change: So few thoughts here. So this year, as you've mentioned, was about focusing on improving efficiency and operational excellence. And next year, we're focusing on returning to whatever you grow.

Speaker Change: So we've made significant changes to our cost structure, as you saw today, and we will continue to look for efficiencies to continue to bring up x-down, that's one part. On the margins, we expect margin improvements to be realized next year as we start seeing the benefit of Asia Manufacturing and improve subscription margins.

Mansi Khetani: In summary, we believe Q2 was the bottom for revenue growth and EBITDA loss, and we have guided prudently to Q3. We continue to invest in all the right areas of the business, and operationally we put ourselves in a position to execute better and faster as the macro turns.

Mansi Khetani: And as inventory will come down around the middle of next year. Now that said, we obviously need to see a moderate amount of revenue growth next year, which we think could be possible from a number of things. First, the deals pushing out from this year will materialize next year. And in many cases, they're even expanding. Second, we see an increase in opportunities. Some of which are pretty large on the fleet side, again, something that Rick had mentioned, which typically take longer to close. And the third would be we are seeing signs of gradual improvement in the overall macro, where we're seeing some green shoots.

Hannah: Hannah's inventory will come down around the middle of next year. Now that said, we obviously need to see a moderate amount of revenue growth next year, which we think could be possible from a number of things. Right. First, the deals pushing out from this year will materialize next year. And in many cases, they're even expanding.

Operator: With that, I will turn the call back to the operator for questions. Thank you, and we will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your questions, simply press star 1 a second time. If you are called upon to ask your question and are listening via speaker phone on your device, please pick up your handset and ensure that your phone is not on you when asking your question. To be able to take as many of your questions as possible, we ask that you please limit yourself to one question and one follow-up. Again, press star 1 to join the queue.

Hannah: Second, we see increase in opportunity. Some of which are pretty large on the fleetside, again something that Rick had mentioned, which typically take longer to close.

Hannah: And the third would be the same sign of gradual improvement in the overall macro, where we're seeing some brain shoots. And overall subscription revenue will also continue to grow due to our large install base.

Mansi Khetani: And overall, you know, subscription revenue will also continue to grow due to our larger install base.

Mansi Khetani: So based on these, we're targeting to see break even sometime during next year, but the exact timing of it will depend on actual revenue growth.

Hannah: So based on these, we're targeting to see break even sometime during next year, but the exact timing of it will depend on actual revenue growth.

Colin Rusch: Okay, thanks so much.

Colin Rusch: I'll take a follow-up offline. But in, you know, while I have you, the technology side, obviously there's an awful lot happening in terms of incremental improvement on batteries, you know, move toward higher voltage and higher wattage on the chargers. Can you talk a little bit about, you know, key areas and investment around the development mentioned AI and your ability to optimize routes and a variety of other things?

Speaker Change: Okay, thanks so much for taking a follow-up offline, but in what I have you, I'm going to take now, I'll be saying obviously there's an awful lot happening in terms of incremental improvement on batteries.

Colin Rush: And your first question comes from the line of Colin Rush with Oppenheimer. Your line is open. Thanks so much, guys, and I appreciate the incremental detail you're offering here.

Speaker Change: You know, moved toward higher voltage and higher wattage on the charters can you tell me a little bit about, you know, key areas and investment around the development, you mentioned AI and your ability to optimize routes and, and...

Mansi Khetani: You know, can you talk a little bit about the target revenue level to reach that EBITDA break even, and how you see the existing inventory working off in your ability to reduce working capital along the way towards that break even level? Yeah, hi Colin, I'll take that question. So I'll start with the second part, which is the inventory level. So based on our, you know, guide for Q3, based on the macro conditions that we were expecting to be a lot better than the second half, which we're clearly not seeing now, we believe that, you know, inventory levels will stay high for the rest of the year basically around the same as we are right now.

Rick Wilmer: But, you know, how should we be thinking about the kind of one or two key priorities for you guys from a technology investment perspective?

Speaker Change: and a variety of other things, but you know how should we be thinking about the kind of one or two key priorities for you guys from a technology investment perspective.

Rick Wilmer: Yeah, hi, Colin. This is Rick. Good to talk to you.

Rick Wilmer: We've got two major areas of focus. Simply put, software and hardware. As we announced a couple of months ago, we hired a new chief development officer for software, and he's really now coming up to speed and starting to refine our go-forward roadmap for software. And I really expect a lot of exciting innovation in that area. And then on the hardware side, as we mentioned in the prepared remarks, we continue to work with our co-development partners, W and C, and Act Bell. And as I, again, said in the prepared remarks, we've got some really exciting new hardware products.

Speaker Change: Yeah, hi, Colin, this is Rick, good to talk to you. We've got two major areas of focus, simply put software and hardware. As we announced a couple of months ago, we hired a new chief development officer for software.

Speaker Change: He's really now coming up to speed and starting to refine our GoFore roadmap for software and I really expect a lot of exciting innovation in that area. And then on the hardware side, as we mentioned in the prepared remarks, we continue to work with our Code of Work Development Partners, WNC and Act Bell.

Mansi Khetani: This is kind of the peak, but it should, I don't see it coming down this year. I believe that we should see some inventory balance coming down around Q1, Q2 around middle of next year, as we saw through the inventory on hand.

Speaker Change: and as I again said in the prepare of remarks, we've got some really exciting new hardware products coming out in the future. I can't wait to get those in the market. So those are the two big areas of focus for us.

Rick Wilmer: Coming out in the future, I can't wait to get those in the market. So those are the two big areas of focus for us.

Mansi Khetani: On the second part of your question, which was related to the revenue level needed for adjusted EBITDA breakeven, which we've now guided or targeting to get to next year. So few thoughts here. So this year, as you mentioned, was about focusing on improving efficiency and operational excellence. And next year, we're focusing on returning to revenue growth. So we've made significant changes to our cost structure as you saw today. And we will continue to look for efficiencies to continue to bring our tax down.

Colin Rusch: Okay, thanks, guys.

Steven Gengaro: Our next question comes from the line of Steven Genjaro with Steve Full. Your line is open. Thanks. Good afternoon, everybody. I guess two for me, but what I'd start with is regular fuel free. You have some optimism around some green shoots in your prepared remarks.

Speaker Change: Okay, thank you guys.

Speaker Change: Enter a next question comes from the line of Stephen Ginger, with Stiefle, your line is open.

Stephen Ginger: Thanks, good afternoon everybody.

Stephen Ginger: I guess two for me, but what I start with is Ricky Wilmer, you are free.

Steven Gengaro: And I'm just curious when you think about what you're seeing in the market right now, and you think about your expectations on the event outside next year, when do you think we start to see a revenue inflection point based on some of the positives that you're seeing in the market right now?

Stephen Ginger: Yeah, it's an optimism around some green shoots in your particular remarks and I'm just curious when you think about what you're seeing in a market right now and you think about kind of here.

Mansi Khetani: That's one part. On the margins, we expect margin improvements to be realized next year as we start seeing the benefit of our Asia manufacturing and improve subscription margins. And as inventory will come down around the middle of next year. Now, that said, we obviously need to see a moderate amount of revenue growth next year, which we think could be possible from a number of things. First, the deals pushing out from this year will materialize next year.

Speaker Change: Extractations on the exhaust line next year. When do you think we start to see kind of a revenue and flexion point based on some of the positive you're seeing in the market right now?

Rick Wilmer: Um, hard to predict, you know, again, the green shoots, I think are very specific. And one is we've seen a number of current customers significantly expand their deployment plans by, in some cases, in order of magnitude. In other cases, specifically in fleet, which we've talked about, we've seen the pipeline and the opportunities that are coming our way in fleet expand very significantly, doubled over last year. So that, again, feels like a pretty strong green shoot. Third, we're seeing a trend now where we've got a number of deals. This is, you know, by far more than one that we're lost on an RFP six months, 12 months ago, where the competition has not been successful, executing on their commitments, and those deals have now come back to us.

Speaker Change: Hard to predict, you know, again, the green shoes I think are very specific and one is we've seen a number of current customers.

Mansi Khetani: And in many cases, they're even expanding. Second, we see increase in opportunities. Some of which are pretty large on the fleet side, again, something that Rick had mentioned, which typically take longer to close. And the third would be we are seeing signs of gradual improvement in the overall macro where we're seeing some green shoots. And overall, you know, description revenue will also continue to grow due to our larger install base.

Speaker Change: Significantly expand their deployment plans by, in some cases, in order of magnitude.

Speaker Change: In other cases, specifically in Fleet, which we've talked about, we've seen the pipeline and the opportunities that are coming our way in Fleet expand very significantly, doubled over last year.

Colin Rush: So based on these, we're targeting to see break even sometime during next year, but the exact timing of it will depend on actual revenue growth. Okay, thanks so much. I'll take a follow-up off line.

Speaker Change: Again, feels like a pretty strong green shoe. Third, we're seeing a trend now where we've got a number of deals. This is, you know, by far more than one.

Rick Wilmer: But in, you know, while I have you, the technology side, obviously, there's an awful lot happening in terms of incremental improvement on batteries, you know, move toward higher voltage and higher wattage on the chargers. Can you talk a little bit about, you know, key areas and investment around the development mentioned AI and your ability to optimize routes and, and a variety of other things? But, you know, how should we be thinking about the kind of one or two key priorities for you guys from a technology investment perspective? Yeah, hi, Colin. This is Rick. Good to talk to you.

Speaker Change: that were lost on an RFP six months, 12 months ago, where the competition has not been successful executing on their commitments and those deals have now come back to us.

Rick Wilmer: So those are good examples of the green shoots we're seeing.

Rick Wilmer: I guess the fourth one would be we continue to see the dislocation in workplace between the correlation of EV sales and charge or adoption. We've had specific examples of, you know, large workplace customers, for example, talking about, you know, very aggressive growth and the employees that their workplaces that are subscribing to their EV charging programs. And it appears to be growing faster. Again, it's indicated through our utilization data, specifically in workplace that also looks like a green shoot. So we are seeing some, some positive signs in these areas.

Speaker Change: So those are good examples of the green shoots we're seeing. I guess the fourth one would be we continue to see that this location and workplace between the correlation of EV sales and charter adoption.

Speaker Change: We've had specific examples of

Speaker Change: in a large workplace customer's, for example, talking about, you know, very aggressive.

Rick Wilmer: We've got two major areas of focus, simply put software and hardware. As we announced a couple of months ago, we hired a new chief development officer for software and he's really now coming up to speed and starting to refine our go-forward roadmap for software. And I really expect a lot of exciting innovation in that area. And then on the hardware side, as we mentioned in the prepared remarks, we continue to work with our co-development partners, WNC and ActBell. And as I, again, said in the prepared remarks, we've got some really exciting new hardware products coming out in the future. I can't wait to get those in the market.

Speaker Change: Gross in the employees at their workplaces that are subscribing to their EV charging programs.

Speaker Change: and it appears to be growing faster again. It's indicated through our utilization native specifically in workplace. That also looks like a green shoe. So we are seeing some positive signs in these areas.

Mansi Khetani: Okay, thank you. And then the other question I was on a gross margin side. I think you mentioned, Monty mentioned the Asian manufacturing on, I guess, on the product side, but then also better subscription margins. What are the, what are the couple of, was there were some think about quantify the impact that could have on the gross margins that, you know, even if we assume just kind of modest revenue growth.

Speaker Change: Great, thank you and then the other person I was on my head.

Speaker Change: Gross margin side. I think you mentioned Montenegro, mentioned the Asian manufacturing on the, I guess, on the product side, but then also better subscription margins. What do you think? What do you like a couple of? But you're wondering what you're going to think about going to qualify the impact.

Speaker Change: That could have on the gross margins, even if we assume just kind of modest revenue goes what, what the manufacturing side, how that helps to gross margins on the products and where should the description margin get to in the next four to six quarters.

Mansi Khetani: What, what the manufacturing side, how that helps to gross margin on the products and, and where should the description margins get to in the next four to six quarters. Yeah, so specifically from the Asian manufacturing side, there are significant benefits to the hardware margins. We're not able to quantify exactly because we'll be selling through existing inventory, which is at different levels for different products. And so we'll be introducing the Asian manufacturing product for the same different parts at different times. So that is a blend. So I would think that we would see a gradual improvement in gross margins through each of the quarters next year, as we start, you know, eating through the inventory that we currently have.

Colin Rush: So those are the two big areas of focus for us. Okay, thank you.

Steven Gengaro: And your next question comes from the line of Steven Gingaro with Steve Full. Your line is open. Thanks. Good afternoon, everybody. I guess two for me, but what I'd start with is regular pre. You have some optimism around some green shoots in your prepared remarks. And I'm just curious when you think about what you're seeing in the market right now and you think about kind of your expectations on the event outside next year, when do you think we start to see kind of a revenue inflection point based on some of the positive you're seeing in the market right now?

Speaker Change: So specifically from the Asia Manufacturing site

Speaker Change: There is significant benefits to the hardware margins, we are not able to quantify it exactly because

Steven Gengaro: Um, hard to predict, you know, again, the green shoots I think are very specific and one is we've seen a number of current customers significantly expand their deployment plans by in some cases in order of magnitude. In other cases, specifically in fleet, which we've talked about, we've seen the pipeline and the opportunities that are coming our way in fleet, we've seen it expand very significantly, doubled over last year. So that, again, feels like a pretty strong green shoot.

Speaker Change: will be selling through existing inventory, which is at different levels for different products, and so we'll be introducing the agent manufacturing.

Steven Gengaro: Third, we're seeing a trend now where we've, we've got a number of deals. This is, you know, by far more than one, that we're lost on an RFP six months, 12 months ago, where the competition has not been successful, executing on their commitments and those deals have now come back to us. So those are good examples of the green shoots we're seeing. I guess the fourth one would be, we continue to see the dislocation and workplace between the correlation of EV sales and charge or adoption.

Speaker Change: Porter, four of the same different types of different types. So that is a blend.

Speaker Change: So I would say that we would see an agreement in the last few days to do each of the quarters next year. As we start, you know, meeting through the inventory that we currently have.

Mansi Khetani: And on the subscription side, you've seen us improve subscription margins three nicely over the last few quarters. This was on the non-gab basis, where, you know, above 50%, so we're very excited about that. Most of that is coming from improvements in our support talks, which we have been able to get to by outsourcing to India. And most of our software team is now, or support team, sorry, is now based out of our India offices. And as we continue to see economies of scale, the top line on the subscription side, increasing with contributing relatively flat, that should improve margins as well.

Speaker Change: And on the subscriptions I have seen as a group subscription margin pretty nicely over the last few quarters

Speaker Change: and Piscwalk on the non-gab bases were above 50%.

Speaker Change: So we're very excited about that. Most of that is coming from improvements in our support hot.

Speaker Change: which we have been able to get to by our shorting to India. The most of our software team is now supporting, so it is now being dealt with in India offices.

Speaker Change: and as we continue to see economy of scale, the top line on the subscription site, including the Internet, which means we're constantly thinking that we're going to have a lot of

Mansi Khetani: The other comment, a lot to that is innovation continues to play a role in this as well. The AI technology we recently released, we call this picture to resolution, has been having a surprising, very quick impact on station repair costs that are under warranty. This reduces the need to do multiple truck rolls, one to go diagnose a problem, and then a second to go repair a problem. We've been very pleased with the early results, and innovation like that continues to drive down cost of operations around the services side.

Speaker Change: The other comment a lot to that is innovation continues to play a role in this as well. The AI technology we recently released, we call this picture to resolution.

Speaker Change: has been having a surprising, very quick impact on station repair costs that are under warranty. This reduces the need to do multiple truck rolls. One to go diagnose a problem and a second to go repair a problem. We've been very pleased with the early results.

Steven Gengaro: We've had a specific examples of, you know, large workplace customers, for example, talking about, you know, very aggressive growth and the employees that their workplaces that are subscribing to their EV charging programs. And it appears to be growing faster. Again, it's indicated through our utilization data specifically in workplace that also looks like a green shoot. So we are seeing some, some positive signs in these in these areas. Right. Thank you.

Speaker Change: and Rift. Innovation like that continues to drive down cost of operations around the service society.

Mansi Khetani: Good, thank you for the details.

Bill Peterson: And their next question comes from the line of Bill Peterson with JP Morgan. Your line is open. I a good afternoon and thanks for taking the questions and the details that's far on the call. One of the double click on the third quarter guidance. Can you provide some additional context on the quarter quarter to climb? How much is this related to competitive dynamics or pricing? You also talked about push outs. I think you even talked about that last quarter on the order of eight digits. Is that just further push outs, or is this something new?

Speaker Change: Good, now thank you for the details.

Speaker Change: and their next question comes from the line of Bill Peterson with JP Morgan. Your line is open.

Bill Peterson: I did after I ended and thanks for taking the questions and the details that I saw on the call.

Bill Peterson: One of the double click on the third quarter guidance. Can you provide some additional context from the quarter quarter decline?

Rick Wilmer: And then the other question I was on the gross margin side. I think you mentioned, Monty mentioned the Asian manufacturing on, I guess, on the product side, but then also better subscription margins. What are the, what are the couple of, there were some think about the quantity impact that could have on the gross margins that, you know, even if we assume just kind of modest revenue growth, what, what the manufacturing side, how that helps to gross margin.

Speaker Change: and the United States. It's a competitive, diverse, surprising, units, product mix, maybe policy uncertainty in the US and Europe. You also talked about pushouts, I think you even talked about that last quarter.

Speaker Change: on the order of eight digits, is that just further pushouts, or is this something new? And maybe other things that related to product change over, or maybe focus on software, anything to help us understand the quarter or near and near decline.

Bill Peterson: And maybe other things like related to product changeover or maybe focus on software. Anything to help us understand the quarter quarter and you're on your decline.

Rick Wilmer: On the products and, and where should the description of margins get to in the next four to six quarters. Yeah. So specifically from the Asian manufacturing side that is significant benefits to the hardware margins, we're not able to quantify exactly because we'll be selling through existing inventory, which is at different levels for different products. And so we'll be introducing the Asian manufacturing product for the same different parts at different times. Right.

Rick Wilmer: Bill, let me make a couple of comments, and then I'll hand it over to Mansi to add to it. The one thing I'll tell you on the guide for this quarter is that we've really made a significant change to our sales and marketing organization that was part of this restructuring we announced today. We have flattened that organization, increased the ratio of sellers to non-quoted carrying people. As we mentioned, we're expecting to close our CRO search here shortly. So, with this much disruption in the go-to-market organization, we're cautious about Q3. And that was one of the reasons we gave a more conservative guide.

Speaker Change: Yeah, but let me make a couple of comments and then I'll hand it over to Mansi to add to it.

Speaker Change: The one thing I'll tell you on the guide for this quarter is that we've really made a significant change to ourselves in marketing organization.

Speaker Change: that was part of this restructuring we announced today. We have flattened that organization increased the ratio of sellers to non-coded curing people, as we mentioned.

Rick Wilmer: So that is a blend. So I would think that we would see a gradual improvement in gross margins through each of the quarters next year as we start, you know, eating through the inventory that we currently have. And on the subscription side, you've seen us improve subscription margins pretty nicely over the last few quarters. This was on the non-gab basis, where, you know, above 50%, so we're very excited about that. More to that is coming from improvements in our support talks, which we have been able to get to by outsourcing to India.

Speaker Change: We're expecting to close our CRO Church here shortly.

Speaker Change: So with this much disruption in the go-to-market organization, we're cautious.

Speaker Change: About Q3, and that was one of the reasons we gave him more conservative guide.

Mansi Khetani: I'll let Mansi add some more color from a financial perspective. Yeah. And just generally, as I've mentioned before, guidance methodology does take into consideration. Some of the push out of deals, the large deals we've seen it happen many times before. So we do take it into consideration. However, this quarter we saw a higher magnitude of deals getting pushed out because of the uncertainty in the macro. There are multiple reasons delayed; you know, permitting. Extended construction timelines or just delayed buying decisions. So we saw fleet revenue come in lower than we had expected. And obviously we're factoring in all of this information and knowledge that we've gained from Q2 into our Q3 guidance, which we believe is prudent given the uncertainty in the market.

Alette Mansi: and Alette Mansi has more color from a financial perspective. Yeah, and just generally as I've mentioned before.

Alette Mansi: Guidance Methodology does take into consideration some of the push-out of deals. A large deal. We've seen it happen many times before, so we take it into consideration, however.

Alette Mansi: This quarter we saw a higher magnitude of these getting pushed out because of the uncertainty in the macro that are multiple reasons delayed permitting extended construction timelines or just delayed buying decisions.

Rick Wilmer: And most of our software team is now, or support team, sorry, is now based out of our India offices. And as we continue to see economies of scale, the top line on the subscription side, increasing with constraining relatively flat, that should improve margins as well. The other comment a lot to that is innovation continues to play a role in this as well. The AI technology we recently released, we call this picture to resolution, has been having a surprising, very quick impact on station repair costs that are under warranty.

Alette Mansi: So we saw sleet having you come in lower than yet expected and obviously we're factoring in all of this.

Alette Mansi: Information and all this as we've gained from Q2 into our Q3 guidance, which we believe is prudent, given the uncertainty in the markets. But I would like to point out all of this is about timing of deals.

Rick Wilmer: This reduces the need to do multiple truck rolls, one to go diagnose a problem, and then a second to go repair a problem. We've been very pleased with the early results. And innovation like that continues to drive down cost of operations around the services side. Thank you for the details.

Mansi Khetani: But I would like to point out all of this is about timing of deals, meaning deals getting pushed out. It's not the size or the quantity of deals.

Speaker Change: Meaning, do you getting pushed out? It's not the size or the quantity of deals.

Bill Peterson: Okay. Thanks for that. One of the kind of also asked about margins, but on the equipment side, you know, obviously you're approving margins.

Speaker Change: Okay, thanks for that.

Speaker Change: One of the kind of also asked about margins, but on the equipment side, you know, obviously you're proving margin some of this is related to mixed, but

Mansi Khetani: Some of this is related to mix, but how should we think about now you're one quarter on about the target you have when the new charges from Asia are really sold and buying next year? Is there a way you can kind of quantify the margin uplift for both sort of level two and DC fast for these products? Yeah, I think it's going to be fairly significant just the cost reduction we have on the existing product portfolio. But the other thing that will begin to contribute next year and then in full force in fiscal 27 is our new product introductions.

Speaker Change: How's we think about now you're one quarter on about the target you have when the new charges from Asia are really sold in volume next year? There's your way you can kind of help quantify the Mars and Uplift for both sort of level two and DC fast for these products.

Bill Peterson: And their next question comes from the line of Bill Peterson with JP Morgan. Your line is open. I a good afternoon and thanks for taking the questions and the details.

Rick Wilmer: That's far on the call. One of the double click on the on the third quarter guidance. Can you provide some additional context on the quarter quarter to climb? How much is this related to competitive dynamics or pricing? You also talked about push outs. I think you even talked about that last quarter on the order of eight digits. Is that just just further push outs or is this something new? And maybe other things like related to product change over or maybe focus on software. Anything to help us understand the quarter quarter and you're on your decline.

Speaker Change: Now, I think it's going to be fairly significant just the cost reductions we have on the existing product portfolio. But the other thing that will begin to contribute next year and then in full force and fiscal 27 are new product introductions.

Mansi Khetani: And when I get the question, "Rick, what's a good charger?" It's very simple answer. It's very reliable, very durable, and low cost. And we are focused on improvements on all of those areas with our next gen products. And those again, we'll start to see the beginning of that impact next year and then really in full force in fiscal 27.

Speaker Change: and when I get the question, Rick, what's a good charger? It's very simple answer. It's very reliable, very durable, and low cost, and we are focused on improvements on all of those areas with our next gen products and those again.

Speaker Change: We'll start to see the beginning of that impact next year and then really in full force in fiscal 27.

Stephen FOX: Thank you. And your next question comes from the line of Stephen Fox with Fox Advisors. Your line is open.

Speaker Change: Thanks for watching!

Rick Wilmer: Bill, let me make a couple of comments and then I'll hand it over to Mansi to add to it. The one thing I'll tell you on the guide for this quarter is that we've really made a significant change to our sales and marketing organization that was part of this restructuring we announced today. We have we have flattened that organization increased the ratio of sellers to non quoted carrying people. As we mentioned, we're expecting to close our CRO search here shortly. So with this much disruption in the go to market organization, we're cautious about Q three and that was one of the reasons we gave a more conservative guide.

Speaker Change: Thank you for watching!

Speaker Change: And your next question comes from the line of Stephen Fox with Fox Advisors, your line is open.

Stephen FOX: Hi, a couple of questions, if I could, just to understand the backdrop in which you guys think you're now operating. So first of all, in terms of any kind of revenue recovery, it seems a lot of it is hinging on fleet, but that's only 14% of buildings today. Like, can you give us perspective on how big fleet can get to over the next couple of years? And then secondly, when you say that EVs have sort of stabilized a predictable growth rates, is there any kind of sense for what that growth rate you think will be over the next couple of years?

Stephen FOX: Hi, a couple questions if I could just understand the backdrop in which you guys think you're now operating. So first of all, in terms of any kind of revenue recovery, it seems a lot of it is hinging on fleet.

Speaker Change: But that's only 14% of Billings today. Can you give us perspective on how big we can get to over next couple of years? And then secondly, when you say that EVs have...

Speaker Change: has sort of stabilized a predictable growth rate. Is there any kind of sense for what that growth rate you think will be over the next couple of years and paid all these objectives? Thanks.

Stephen FOX: Hit all these objectives. Thanks.

Mansi Khetani: I'll let Mansi add some more color from a financial perspective. Yeah. And just generally, as I've mentioned before, guidance methodology does take into consideration. Some of the push out of deals, the large deals. We've seen it happen many times before. So we do take it into consideration. However, this quarter, we saw a higher magnitude of deals getting pushed out because of the uncertainty in the macro. There are multiple reasons delayed. Permitting extended construction timelines or just delayed buying decisions.

Rick Wilmer: I can take the first part, which is where we expect fleet business to go. It's definitely going to be a pretty significant portion of our overall revenue. And don't know the exact timing, but it could be expected to be about a third over a period of time. We're seeing that, based on the number of opportunities that are in the system right now, we're alluded to this earlier. We're already seeing twice the number of opportunities that we were seeing last year. These just take a little bit longer to close. So the business is there. The vehicles are coming.

Speaker Change: I can take the first part, which is where we expect fleet business to go. It's definitely going to be a pretty significant portion of our overall revenue.

Speaker Change: Don't know the exact timing, but it could be expected to be about a third.

Speaker Change: Over a period of time, we're seeing that based on the number of opportunities.

Speaker Change: that are in the system right now alluded to this earlier, we're already seeing twice the number of opportunities that we were seeing last year. These just take a little bit longer to close. So the business is there, the vehicles are coming, and so it will be a pretty significant portion of our overall revenue.

Mansi Khetani: So we saw fleet revenue come in lower than we had expected and obviously we're factoring in all of this information and all is where we've gained from Q two into our Q three guidance, which we believe is prudent given the uncertainty in the market. Yes, but I would like to point out all of this is about timing of deals, meaning deals getting pushed out. It's not the size of the quantity of deals. Okay, thanks for that.

Rick Wilmer: And so it will be a pretty significant portion of our overall revenue.

Rick Wilmer: In terms of passenger vehicles, you know, again, I think we're starting to see, you know, positive signs from the market mixed in with, you know, concerns from the auto OEMs. You know, as they evaluate their transition to, you know, full BEV and how they intersect first plug and hybrids in the mix. I think it varies from auto OEM to auto OEM. But, you know, as we mentioned in the prepared remarks, you know, we've seen, you know, these prices and pricing go down to clear out this model year and prepare for the next model year. The other thing that I believe particularly is that improved selection and reduced cost of a vehicle and hopefully with reduced interest rates and the affordability of car loans will all be a positive contribution to passenger EV adoption.

Speaker Change: In terms of passenger vehicles, you know, again, I think we're starting to see, you know, positive signs from the market, mixed in with, you know, concerns from the auto Williams.

Speaker Change: As they evaluate their transition to full BV and how the inters are first plugged in hybrids in the mix.

Mansi Khetani: One of the kind of also asked about margins, but on the equipment side. Obviously, you're approving margin. Some of this is related to mixed, but how should we think about now you're one quarter on about the target you have when the new charges from Asia are really sold and volume next year? Is there a way you can kind of quantify the margin uplift for both sort of level two and DC fast for these products?

Speaker Change: I think it varies from Ottawa to Ottawa, but as we mentioned in the prepared remarks, you know, we've seen.

Speaker Change: Lee's price is in price and go down to clear out this model year and prepare for the next model year.

Speaker Change: The other thing is that I believe particularly is that improved selection and reduced cost of a vehicle and hopefully with reduced interest rates in the affordability of car loans will all.

Mansi Khetani: Yeah, I think it's going to be fairly significant just the cost reduction we have on the existing product portfolio, but the other thing that will begin to contribute next year and then in full force and fiscal 27 our new product introductions. And when I get the question Rick, what's a good charger? It's very simple answer. It's very reliable, very durable and low cost and we are focused on improvements on all of those areas with our next gen products and those again. We'll start to see the beginning of that impact next year and then really in full force and fiscal 27.

Rick Wilmer: I think that the JD Power statistic we mentioned is pretty meaningful where 24% of car buyers are now very likely to consider an EV for their next vehicle. So again, we see those positive pieces of news mixed in with, you know, other news from auto OEMs, whether evaluating their transition to full BEV.

Speaker Change: The Apostle of Contribution, the Passinger, EV adoption. I think that the JD power statistic we mentioned is pretty meaningful work.

Speaker Change: 24% of car buyers are now very likely to consider an EV for their next vehicle. So again, we see those positive pieces of news mixed in with, you know, other news from auto OEMs, whether evaluating their transition to full B.E.V.

Stephen FOX: Great. That's helpful.

Mark Delaney: Thank you. Your next question comes from the line of Mark Delaney with Goldman Sachs. Your line is open. Yes. Good afternoon. Thank you very much for taking my questions.

Speaker Change: Great, that's helpful. Thank you.

Speaker Change: Your next question comes from the line of Mark Delaney with Goldman Sachs. Your line is open.

Rick Wilmer: And your next question comes from the line of Steven Fox with Fox Advisors. Your line is open. Hi, a couple questions if I could just to understand the backdrop in which you guys think you're now operating. So, first of all, in terms of any kind of revenue recovery, it seems a lot of it is hinging on fleet, but that's only 14% of. Billings today, like, can you give us perspective on how big fleet can get to over the next couple of years.

Mark Delaney: First of all, you can provide an update on customers looking to store charging hardware from multiple providers in North America. And to what extent you're seeing that influence revenue this fiscal year, can you speak about that both as a potential headwind to your hardware revenue, but also as an opportunity to sell more software revenue? Yeah, that's a good question. I think we're in the early stages of this, but it's clearly going to happen. I think in North America, you've seen an indication from the largest of the large customers to want a multi-source hardware. That's largely brand and intent, so far as opposed to actual action.

Mark Delaney: Yes, good afternoon. Thank you very much for taking my questions.

Rick Wilmer: And then secondly, when you say that EVs have sort of stabilized a predictable growth rates, is there any kind of sense for what that growth rate you think will be over the next couple of years. Hit all these objectives. Thanks.

Mark Delaney: First of all, you can provide an update on customers looking to store charging hardware from multiple providers in North America to what extent you're seeing that influence revenue this fiscal year. Could you speak about that both as a potential headwind to your hardware revenue, but also as an opportunity to sell more software revenue?

Speaker Change: Yeah, that's a good question. I think we're in the early stages of this, but it's clearly going to happen.

Speaker Change: I think in North America you've seen an indication from the largest of the large customers to want a multi-source hardware.

Speaker Change: That's largely brain and intent so far as opposed to actual action. But one thing I will tell you is that our investments in our support organization, all the innovation we've done around network time.

Rick Wilmer: But one thing I will tell you is that our investments in our support organization, all the innovation we've done around network time, has really created some differentiation for us. And we're seeing some of those customers, while they may express an intent to multi-source, still gravitate towards our solution just because of the reliability we've been able to provide in their networks in Europe. It's different where the market is much further ahead in Europe.

Rick Wilmer: I can take the first part, which is where we expect fleet business to go. It's definitely going to be a pretty significant portion of our overall revenue and don't know the exact timing, but it could be expected to be about a third over a period of time. We're seeing that based on the number of opportunities that are in the system right now, we're alluded to this earlier. We're already seeing twice the number of opportunities that we were seeing last year.

Speaker Change: has really created some differentiation for us and we're seeing some of those customers.

Speaker Change: While they may express an intent to multi-source still, you know, gravitate towards our solution just because of the reliability we've been able to provide in their networks.

Rick Wilmer: What we're seeing is a lot of brown field opportunities now, which really drives software. So we've got multiple examples of customers that have a large installed base of non-charge point hardware. They want to standardize on a software platform to manage that entire infrastructure of both their existing hardware and new. And in those cases, we're obviously selling software without hardware for the installed brown field and then having the opportunity to also sell new hardware as they expand their network.

Speaker Change: and Europe is different where the market is much further ahead and Europe what we're seeing is a lot of brownfield opportunities now which really drives off to Earth.

Rick Wilmer: These just take a little bit longer to close. So the business is there. The vehicles are coming. And so it will be a pretty significant portion of our overall revenue. In terms of passenger vehicles, you know, again, I think we're starting to see, you know, positive signs from the market mixed in with, you know, concerns from the Auto OEMs. You know, as they evaluate their transition to, you know, full BEV and how they intersect first plug and hybrids in the mix.

Speaker Change: So we've got multiple examples of customers that have a large installed base of non-charge point hardware. They want to standardize on a software platform to manage that.

Speaker Change: The entire infrastructure of both are existing hardware and new, and in those cases we're obviously selling software without hardware for the installed brownfield and then having the opportunity to also sell new hardware as they expand their networks.

Rick Wilmer: The other question was around utilization rates. Last quarter, the company mentioned that utilization rates were rising with the continued growth in the number of EVs on the road, as well as the lower shipments. The company is seen in a second half of this fiscal year. I think utilization rates are rising further. Maybe you can give more color around where utilization rates stand, and is there any specific level you think would trigger additional charging investments from customers. Thank you. Yeah, they're still continuing to increase, and it's now at least again back to the green shoots, starting to pull through some demand.

Speaker Change: This couple of other questions was around utilization rates. Last quarter, the company mentioned that utilization rates were rising with the continued growth in the number of EVs on the road, as well as the lower shipments, the company is seen in the second half of this fiscal year. I would think that utilization rates are rising further. Maybe you can give more color around where utilization rates stand. And as there is a specific level, you think would trigger additional charging investments from customers. Thank you.

Rick Wilmer: I think it varies from Auto OEM to Auto OEM. But, you know, as we mentioned in the prepared remarks, you know, we've seen, you know, these prices and pricing go down to clear out this model year and prepare for the next model year. The other thing that I believe particularly is that improved selection and reduced cost of a vehicle and hopefully with reduced interest rates and the affordability of car loans will all be a positive contribution to passenger EV adoption.

Speaker Change: Together still continuing to increase, and it's now, at least, again, back to the green shoot, starting to pull through some demand. Again, I've had specific customer conversations where...

Rick Wilmer: I think that the JD power statistic we mentioned is pretty meaningful. We're 24% of of car buyers are now very likely to consider an EV for their next vehicle. So again, we see those positive pieces of news mixed in with, you know, other news from Auto OEMs, whether evaluating their transition to full BEV. Great. That's helpful. Thank you.

Rick Wilmer: Again, I've had specific customer conversations where they have told me that their employees can't find a place to charge at work, and they're starting to, again, invest in expanding their network. So that number goes up, and it now looks like it's hit a point where at least it's beginning to start to pull through demand for expansion opportunities. Opportunities with our, especially our existing workplace customers. The other trend we're beginning to see is in hospitality where it looks to me like some of the larger brands are starting to get serious about a brand standard for their, their entire chain, as opposed to letting their franchise owners, you know, do what they want to do with charging at their individual hotel.

Speaker Change: They have told me that their employees can't find a place to charge at work, and they're starting to, again, invest in expanding their network.

Speaker Change: That number goes up and it now looks like it's hit a point where at least it's beginning to start to pull through demand for expansion opportunities with our, especially our existing workplace customers.

Rick Wilmer: And your next question comes from the line of Mark Delaney with Goldman Sachs. Your line is open. Yes. Good afternoon. Thank you very much for taking my questions. First, I hope you can provide an update on customers looking to store charging hardware from multiple providers in North America. And to what extent you're seeing that influence revenue this fiscal year, could you speak about that both as a potential headwind to your hardware revenue, but also as an opportunity to sell more software revenue?

Speaker Change: The other trend we're beginning to see is in hospitality.

Speaker Change: where it looks to me like some of the larger brands are starting to get serious about a brand standard for their entire chain, as opposed to letting their franchise owners do what they want to do with charging at their individual hotels.

Rick Wilmer: So again, I think utilization pressure is starting to show some green shoots of pull-through demand for expansion business again, with some, I think, maturity in the hospitality market that can pull through some demand as well.

Speaker Change: Again, a big utilization pressure is starting to show some green shoots of poultry demand for expansion business. Again, with some, I think maturity in the hospitality market that can poultry some demand as well.

Rick Wilmer: Yeah, that's a good question. I think we're in the early stages of this, but it's clearly going to happen. I think in North America, you've seen an indication from the largest of the large customers to want a multi-source hardware. That's largely brand and intent so far as opposed to actual action. But one thing I will tell you is that our investments in our support organization, all the innovation we've done around network time has really created some differentiation for us.

Rick Wilmer: And we're seeing some of those customers while they may express an intent to multi-source still gravitate towards our solution just because of the reliability we've been able to provide in their networks. In Europe, it's different where the market is much further ahead. In Europe, what we're seeing is a lot of brownfield opportunities now, which really drives software. So we've got multiple examples of customers that have a large installed base of non-charge point hardware.

Chris Dendrinos: Thank you. And, as a reminder, it is star one if you would like to ask a question, and your next question comes from the line of Chris Dendrino's with RBC Capital Markets. Your line is open. Yeah, good evening, and thank you. I apologize; I'm seeing an airport, so hopefully no announcements come in, but just one for me. You mentioned competition, and you saw, I guess, maybe one of your competitors unable to deliver, and then the customer's going back to you. I guess maybe can you just expand on the competitive landscape right now. I'm curious; you know, how it's evolved over the past year.

Speaker Change: Thank you.

Speaker Change: And as a reminder, it is star one if you would like to ask a question and your next question comes from the line of Chris Dendrinos with RBC Capital Markets. Your line is open.

Chris Dendrinos: Yeah, good evening and thank you, apologies and seeing an airport so hopefully no announcements come in, but I just want for me. You mentioned competition and you saw, I guess maybe one of your competitors unable to deliver and then the customers coming back to you. I guess maybe can you just expand on the competitive lens gate right now, I'm curious how it's evolved over the past year if you've seen.

Chris Dendrinos: If you've seen competitors exit the market, obviously we've seen Tesla change some things up, but any kind of color. I guess maybe across, you know, home fleet and general commercial, how that how that's kind of evolved. Thanks.

Speaker Change: and Petriger's ex at the market, obviously, was being testled, changed, and things up. But any kind of color, I guess, maybe across, you know, home, fleet, and general commercial, how that's kind of evolved, thanks.

Rick Wilmer: Yeah, hi Chris. Good to hear your voice. It hasn't changed a lot in terms of the level of competition we're facing. The fact that I mentioned earlier, where we're seeing deals come back to us that we had lost on an RFP. That's more than one example. There are a number of examples where that's happened, and there are fairly significant opportunities in all cases. By vertical, I think you're seeing, you know, companies come and go in all three areas, whether it's home, workplace, or commercial, or fleet. But again, the overall level of competition appears to be fairly consistent, but some of the names are changing.

Rick Wilmer: They want to standardize on a software platform to manage that entire infrastructure of both their existing hardware and new. And in those cases, we're obviously selling software without hardware for the installed brownfield and then having the opportunity to also sell new hardware as they expand their network. The other question was around utilization rates. Last quarter, the company mentioned that utilization rates were rising with the continued growth in the number of EVs on the road, as well as the lower shipments.

Speaker Change: Yeah, hi, Chris. Good to hear your voice.

Speaker Change: It hasn't changed a lot in terms of the level of competition we're facing.

Speaker Change: The fact that I mentioned earlier where we're seeing deals come back to us that we had lost on an RFP. That's more than one example. There are a number of examples where that's happened and there are fairly significant opportunities.

Speaker Change: in all cases.

Speaker Change: By Vertical, I think you're seeing...

Speaker Change: Company's come and go in all three areas, whether it's home, workplace, or commercial, or fleet. But again, the overall level of competition appears to be fairly consistent with some of the names for changing.

Rick Wilmer: The company is seen in a second half of this fiscal year. I think utilization rates are rising further. Maybe you can give more color around where utilization rates stand, and is there any specific level you think would trigger additional charging investments from customers. Thank you. There's still continuing to increase, and it's now, at least again, back to the green shoots, starting to pull through some, some demand. Again, I've had specific customer conversations where they have told me that their employees can't find a place to charge at work, and they're starting to, again, invest in expanding their network.

Operator: Thank you. That's it for me.

Rick Wilmer: So, that number goes up, and it now looks like it's hit a point where at least it's beginning to start to pull through demand for expansion opportunities. Opportunities with our, especially our existing workplace customers. The other trend we're beginning to see is in hospitality, where it looks to me like some of the larger brands are starting to get serious about a brand standard for their entire chain, as opposed to letting their franchise owners do what they want to do with charging at their individual hotels.

Speaker Change: Thank you, but that's it for me.

Operator: And ladies and gentlemen, this concludes our question-and-answer session as well as today's conference call. We thank you for your participation in. You may now.

Speaker Change: And ladies and gentlemen, this concludes our question and answer session, as well as today's conference call. We thank you for your participation, and you may now disconnect.

Speaker Change: [inaudible]

Rick Wilmer: So, again, I think utilization pressure is starting to show some green shoots of pull through demand for expansion business. Again, with some maturity in the hospitality market that can pull through some demand as well. Thank you.

Rick Wilmer: And as a reminder, it is star one, if you would like to ask a question, and your next question comes from the line of Chris Dendrino's with RBC Capital Markets. Your line is open. Yeah, good evening, and thank you. I apologize I'm sitting in the airport, so hopefully no announcements come in, but just one for me. You mentioned competition, and you saw, I guess maybe one of your competitors unable to deliver and then the customer is going back to you.

Rick Wilmer: I guess maybe can you just expand on the competitive landscape right now? I'm curious, you know, how it's evolved over the past year, if you've seen competitors exit the market, obviously, we've seen Tesla change some things up, but any kind of color. I guess maybe across, you know, home fleet and general commercial, how that how that's kind of evolved. Thanks. Yeah, hi Chris, good to hear your voice. It hasn't changed a lot in terms of the level of competition we're facing.

Rick Wilmer: The fact that I mentioned earlier where we're seeing deals come back to us that we had lost on an RFP, that's more than one example. There are a number of examples where that's happened and there are fairly significant opportunities in all cases. By vertical, I think you're seeing, you know, companies come and go in all three areas, whether it's home workplace or commercial or fleet. But again, the overall level of competition appears appears to be fairly consistent, but some of the names are changing. Thank you, that's it for me.

Operator: And ladies and gentlemen, this concludes our question and answer session as well as today's conference call. We thank you for your participation in you may now.