EVgo Inc.

Greetings. Welcome to the EVGO fourth quarter and full year 2021 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero and your telephone keypad. Please note this conference is being recorded. I'll now turn the conference over to your host, Ted Brooks of Investor Relations. You may begin.

Hi, everyone. Welcome to EVgo's fourth quarter and full year 2021 earnings call. My name is Ted Brooks, and I head investor relations at the company. Today's call is being webcast and can be accessed from the investors section of our website at investors.evgo.com. The call will be archived and available there, and the company's results, investor presentation, and a transcript of today's proceedings will be available at the events and presentation section of the investors page after the conclusion of today's call. Joining me on today's call are Kathy Zoe, EVGO's CEO, and Olga Shevarenkova, the company's chief financial officer. Today, we will be discussing EVGO's latest financial results for the fourth quarter and full year 2021, followed by a Q&A session. During the call, management will be making forward-looking statements regarding the 2022 fiscal year and our outlook for expected growth and investment initiatives. 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, including, among other risks and uncertainties, the severity and duration of the effects of the COVID-19 pandemic. 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 factors that could cause actual results to differ, please refer to our Form 10-K filed soon with the SEC and posted to the investor section of our website. Also, please note that certain financial measures we use on this call are on a non-GAAP basis. For historical periods, we provide reconciliations of these non-GAAP financial measures to GAAP financial measures, and the investor presentation can be found on the investor section of our website. With that, I will turn the call over to Kathy Zoe, EVGO's CEO. Kathy?

Thanks, Ted, and good morning, everyone. EVGO has another strong quarter, wrapping up a tremendous first year as a public company. We made significant progress in solidifying our position as the nation's largest public fast charging network for electric vehicles in a rapidly growing EV market. I'd like to begin this morning with some observations about the EV industry, given the escalating market momentum and enthusiasm we're seeing across the U.S. In 2021 alone, the market share of electric vehicles more than doubled, along with U.S. driver purchases of EVs. Approximately 475,000 electric vehicles were purchased in the U.S. last year, roughly double of sales from just the year before. This is just the beginning. Auto manufacturers are planning to introduce approximately 50 new EV models just over the next 24 months, including the arrival of EVs in segments like SUVs and pickup trucks that will unlock new demographic frontiers in EV adoption. And by 2025, dozens more will follow, creating an abundance of EV choice for every type of driver. We expect these trends will be further accelerated by tailwinds in the macro environment, as electrification of transportation has never been more widely accepted and anticipated. The improving cost and breadth of offerings comes at a time when rising commodity prices makes EV ownership more economically attractive than ever. As the pace of EV adoption accelerates, forecasters expect annual EV purchases to triple by 2025 and then triple again by 2030. It's worth remembering that we expect the demand for DC fast charging to outpace this already rapid market growth. Automakers are meeting the consumer demand for fast charging solutions with battery technologies capable of supporting significantly higher levels of charging throughput. With EVgo's growth and ability to scale profitability tied to EV adoption, we are energized by the powerful secular trends bringing more EVs to the road. Everything we're witnessing across the industry reinforces our confidence in this market and EVgo's leading position within it. It's why we have more conviction than ever in the investments we're making and the plan we're executing against. Let me now highlight some of EVgo's remarkable accomplishments in fiscal year 2021. we delivered 26.4 gigawatt hours of charging throughput, a 68% increase over 2020. This demand for EVgo's charging services led to $22.2 million in revenue, a 52% increase over 2020. We ended the year with 340,000 customer accounts as more drivers chose EVgo as a key charging partner, up from 231,000 at the start of 2021. This equates to about 80% of non-Tesla EVs sold in the U.S. last year coming to EVgo. This demand for EVgo and our charging services extends past individual drivers and is illuminated by our numerous partnerships throughout the industry, further cementing our market leadership in the EV charging space. We hear it time and again when potential partners call us, and we're often that first phone call they make. They recognize EVgo's experience, track record, and leadership positions. Over the last year, we signed several new landmark partnerships with key OEMs, including Subaru and Toyota. EVgo is now the charging partner of automakers responsible for over 40% of U.S. light-duty vehicle sales. As each of these OEM leaders ramps their own EV production, EVgo is exceptionally well positioned to be the charging network of choice for new EV drivers. We've also grown our fleet business with numerous new and expanded partnerships that include Uber, merchant fleet, and leaders in the autonomous vehicle space. And we're introducing our EVgo Extend business line to the market today, an offering we're extremely excited about. Operationally, we ended the year with over 1,600 DCFC stalls in operation and increased the size of the EVgo development pipeline to approximately 3,100 new stalls, marking a 26% rise since the end of the third quarter in this crucial element of our growth story. Over the longer term, we have a funnel of approximately 4,000 additional sites, each to host at least four charging stalls, which represents close to five times the number of fast charging station locations we currently operate. In terms of technology, EVgo continues to add value to our infrastructure business, by developing innovative software products that attract new customers and deepen relationships with existing drivers and B2B partners. This includes the rollout of EVgo Optima, our customized software for fleets, a new mobile app, and EVgo Inside, our proprietary software and API suite, all designed around the same principle of anticipating how to meet our customers' charging needs in a comprehensive and intuitive way. In short, EVGO has been busy in 2021 laying the foundation for a comprehensive electrified transportation future. I'll return to these achievements and expansions of our business in some more detail in a few moments. But let me now touch on the passage of the federal government's infrastructure legislation in November, an important moment that will certainly generate material effects. The National Electric Vehicle Infrastructure Program, or NEVI, will allocate $5 billion to states over the next five years, with an initial $615 million being made available later this year. This federal support for fast-charging infrastructure may cover as much as 80% of a project's cost and may include coverage of operating costs as well as capital expenditures. This federal support may be complemented by local or private sources of funding, marking a significant benefit to developers like EVgo and incentivizing the continued widespread build out of a more comprehensive national fast charging network. As EVGO expected, preference of federal infrastructure funds will be toward build out along highway corridors first, with requirements that chargers be at least 150 kilowatts in capacity with at least four charging stalls per location. Those locations are meant to be no more than one mile off a highway in most cases. must submit their fast-charging infrastructure plans to the federal government by August 1st, with approvals of those plans expected by the end of September. And while EVGO is looking forward to participating in MEBI once the program structures are finalized at the state level, our guidance for 2022 does not incorporate any financial benefits that might arise from these incentives. Over the coming quarters, we will provide investors with updates on state-level implementation, the role EVgo is playing in different geographies, and the financial upshot for the company. As we look back on the rapid evolution of the EV charging industry in 2021 and look ahead to what we expect will be even more substantial growth ahead, I thought it was timely to revisit EVgo's approach to the market. We've always had a driver and customer-centric focus, building chargers where we think they will help spur the adoption of EVs and where they will be used. The complement to that, of course, is providing solutions to the auto manufacturers and the site hosts that need EV charging infrastructure built to accommodate their own customers' needs. As a leader in the sector, EVgo has a finely honed methodology for determining where and when to build, own, and operate fast charging infrastructure to meet our investment hurdles and unlock long-term cash flow and profitability for our investors. Hence, EVgo's historical focus on owning assets in high traffic metropolitan areas. With interest in the EV market expanding to lower traffic, rural geographies and corridors, EVgo is receiving requests to parlay our world-class experience in building stations and operating the most expansive and reliable public network in America to new geographies. Geographies in which we would prefer to be the services provider rather than the asset owner. Fueling along interstates is an example of such an opportunity. We expect growth in this area to be bolstered by the passage of the infrastructure legislation, whose policy objectives include national charging infrastructure ubiquity. With this in mind, EVGO is excited to announce the formalization of our white-label services, provided for years to partners like Kaiser Health, Green Mountain Power, and Salt River Project, in the form of a new offering under the banner EVGO Extend. EVgo Extend partners will leverage all the end-to-end benefits of EVgo's decade-plus of planning, building, operating, and maintaining the nation's most reliable charging network, while the partners themselves purchase and then retain ownership of the charging assets. Formalization of EVgo Extend into our solution suite puts customers and drivers first, unlocks another avenue for value creation and near-term growth upside, Expand EVgo's geographic reach and potential partners and complements efforts in the rest of our business that relate to fleet, software, and scaling efficiencies. EVgo Extend leverages our core competencies to expand our network footprint beyond sites that currently meet our underwriting hurdles for asset ownership, creates another way to grow recurring revenue, and mitigates risk associated with sites that are likely to have low utilization in the intermediate terms. We're working on several exciting potential EVgo extend partnerships that will provide upside to our overall growth in the years to come. We're hopeful that we will be able to communicate more concretely about these efforts soon. Please stay tuned for updates. As mentioned at the outset, you may have seen recent announcements from EVgo on new partnerships with two major auto OEMs, Subaru and Toyota. With Subaru, EVgo was proud to become the preferred charging partner for their first electric vehicle, the Solterra EV, which is expected to become available in the U.S. this summer. EVgo's business deal with Toyota provides for one year of unlimited charging on EVgo's network for buyers or lessees of Toyota's first widely available electric offering, the BZ4X, which Toyota anticipates will be available later this year. This marks Toyota's first move in significant plans to become fully electric, and EVgo was delighted to have been selected as their fast-charging partner. As I noted earlier, with Toyota and Subaru, along with existing partnerships with other OEMs, EVgo now has charging relationships with auto manufacturers that together represent over 40% of annual auto sales in the U.S. This provides clear evidence of the success EVgo has had in building and operating America's most robust fast charging network over the last dozen years. One of the many reasons EVgo is able to attract and retain high-quality partnerships is a commitment to technology-enabled innovation across the company. One of these innovations is EVgo Inside. which is a suite of software and APIs that helps EVgo partners manage the customer experience process from enrollment to charging to billing. We recently released an updated mobile app that showcases both a sophisticated and a friendly design that welcomes drivers to the EVgo charging experience. And our EVgo reservations and EVgo Advantage software products have broadened their reach into new locations during 2021. and EVgo's plug share surpassed 2 million registered users. Electrification activity in the fleet segment has rapidly expanded during the last 12 months, with EVgo's current fleet clients like Uber, Lyft, and two leading AV companies ramping their EV deployments, and dozens of new fleet operators placing their first orders for EVs. These newcomers to electrification are beginning to engage in charging infrastructure planning as they await arrival of their EVs. EVgo's fleet team is at work helping fleets craft infrastructure programs that will meet their needs through our EVgo Optima, EVgold, and EVgo Inside solutions. We look forward to sharing updates with you in the coming quarters. Before I turn the call over to Olga, I want to underscore the EVgo investment opportunity in the context of the growing EV ecosystem as a whole. As we shared, EVgo is a pure play EV charging company with a special focus on DC fast charging and a history of executing and operating at a superior level with uptimes in the high 90% range for our chargers historically and with over a decade of delivering on our promises to site hosts and drivers. We are a pioneer with a first mover advantage in this sector including being powered by 100% renewable energy. Our relentless focus on innovation in technology, products, and solutions has provided us with an edge in designing and engineering charging locations in a way that attracts partners and drivers. We have a world-class executive leadership team with deep expertise in clean energy and that has a clear vision for leading an electrified future. And the superstar employees across every function at EVgo are not only committed to excellence and delivery of EVgo charting services, but to the larger mission of a decarbonized transportation future. EVgo has ESG in our DNA. EVgo's experience and track record of execution are durable advantages in a sector with tremendous growth opportunities. We've done this all with a keen focus on financial discipline, long-term margin potential, risk mitigation, and underwriting that prioritizes profitability and the prudent allocation of investor capital. As Olga will share, even in these early stages, we have realized positive results of this discipline, with growth in both customers and throughput driving cash flows and providing concrete evidence of what the future will bring across the EVgo platform as EV adoption continues. We are more excited than ever about the immense opportunity in this space and Indigo's position in the market as EV adoption is set for takeoff. We expect a lot of positive inflection points in 2022 with increasing driver demand, OEMs introducing new vehicles, and the implementation of supportive policy. But we would also point to the long term and remind everyone that we're in the early innings of a major sectoral transformation. the electrification of the multi-trillion dollar transportation sector is just getting started. EVGO is poised to be a key player in this transformation, and we couldn't be feeling better about the future. And with that, I will turn it over to Olga to discuss some of our financial and operational highlights. Olga?