EVgo Inc.

Good day and welcome to EVgo's third quarter earnings results call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. Instructions will be given at that time. I would now like to turn the call over to Heather Davis, Vice President of Investor Relations.

Hello, everyone, and welcome to EVgo's third quarter 2022 earnings call. My name is Heather Davis, and I am the new head of industrial relations at EVgo. Joining me on today's call are Kathy Zoi, EVgo's CEO, and Olga Shevrenkova, the company's chief financial officer. Today, we will be discussing EVgo's financial results for the third quarter of 2022, followed by a Q&A session. Today's call is being webcast. and can be accessed from the investor section of our website at investors.eveco.com. The call will be archived and available there, along with the company's earnings release and investor presentation after the conclusion of this call. During the call, management will be making forward-looking statements that are subject to risks and uncertainties including expectations about future performance. Factors that could cause actual results to differ materially from our expectations are detailed in our SEC filings, including the risk factors section of our most recent annual report on Form 10-K and in the quarterly report on Form 10-Q that we will be filing soon and which will be available on the investor section of our website. These forward-looking statements apply as of today, and we undertake no obligation to update these statements after the call. Also, please note that we will be referring to certain non-GAAP financial measures on this call. Information about these non-GAAP financial measures including a reconciliation to the corresponding gap measures, can be found in the earnings materials available on the investor section of our website. With that, I'll turn the call over to Kathy Zoe, EVGo's CEO. Kathy?

Good afternoon, everyone, and thank you for joining today. Before I begin with an update on the quarter, I'd like to take a moment to recognize a few new additions to our team at EVGo. First, I'm pleased to welcome Heather Davis, our new head of IR, who kicked off our call today. Heather brings more than 20 years of investor relations and corporate finance experience. I know you all will enjoy getting to work with her. Second, we recently hired a new chief revenue officer, Tanvi Chaturvedi, who joins us from Google. Tanvi will focus on turbocharging our retail revenue growth by transforming the fast-charging user experience. As CRO, Tandy will lead our go-to-market functions, including all consumer revenue growth initiatives, marketing, advertising, and expansion and use of the PlugShare app. Prior to joining EVGO, Tandy held numerous leadership positions at Google, most recently responsible for delivering growth and monetization of the Google Nest smart home product portfolio and services business. Previously, she also held leadership positions at Procter & Gamble's consumer businesses, and served as a technology investment banker at JP Morgan. Now, turning to the quarter. EVgo experienced a solid quarter as we continue to harness our technology-driven approach to lead the ultra-fast EV charging marketplace. On today's call, I'll focus on a few themes from the quarter that we see as key drivers of growth. One, the strength of our operational foundation. Two, Our strong commercial progress as we make headway with existing and new partners. Three, our commitment to technology as a source of advancement and innovation. And lastly, some important updates across the regulatory front, which we expect will drive substantial investment in the EV charging space in 2023 and beyond. Today, nearly 140 million Americans live within 10 miles of an EVgo charger, which is a testament to the foundation of operational excellence we established in order to now accelerate our growth. Our footprint continues to grow across the country, and we're excited to see accelerating momentum as more and more Americans adopt EVs. In fact, we recently announced that we have surpassed 500,000 customer accounts on our platform. The third quarter of 2022 saw a record number of EVs sold in the U.S., with more than 210,000 new fully electric vehicles purchased during the three months, according to EV volume. The market share for EVs continues to increase every quarter, and we expect these trends to only accelerate as we head into 2023. Reuters recently calculated that the world's top automakers are planning to spend nearly $1.2 trillion through 2030 to develop and produce EVs. This is a 2x increase over the estimates that they had projected just a year earlier. The market is coming, and EVgo is at the forefront. A major component of this effort is the work we are doing on the commercial side of the business, as we continue to build out our partnerships across all aspects of the ecosystem. On the fleet side, we signed a new behind-the-defense deal with MHX Solutions, which is a full-service logistics operation based in California, and our first EVgo Optima deployment for a Class 8 truck fleet. This comes on the heels of the agreement we signed with a major investor-owned utility last quarter. Additionally, EVgo signed a new agreement for a dedicated fast-charging hub with an existing autonomous vehicle fleet partner, as well as an agreement with a different AV fleet partner to repurpose a former dedicated site to meet its own growing needs. We're really excited about the progress in our fleet business, which we believe is driven in large part by our technology advantage, and more on that in a few moments. Building on the momentum created in July with the announcement of the EVGO extend deal with the pilot company, we are pleased to report that pre-engineering work has already begun at certain Pilot Flying J sites. we also received our first extend workplace purchase orders to deploy and manage L2 and some DC fast charging stalls for General Motors employees at four different company facilities. This highlights EVgo's ability to partner with large commercial organizations for workplace solutions. As we've shared previously, we're open to both owning sites or managing them on behalf of others. And in many cases, it's better for us and our partners for them to own the chargers. In this case, GM is able to provide a unique benefit for its employees, relying on EVgo to install and operate the chargers. The key to winning the land grab for charging infrastructure is site control, and we secured multiple new agreements with national brand names, which will provide EVgo with access to high-quality properties in prime locations across the U.S. Among these is our agreement with home improvement powerhouse Vogue, Additionally, we expanded our existing site footprint at several large grocery chains, including Kroger, Safeway, and WinCo. We also energized the first of many sites in development at Target, which are now available on the EVgo app and PlugShare. The addition of new national retail site host partners in the home improvement, grocery, and restaurant sectors, complemented by deepening engagements with a number of our existing portfolio partners, has significantly increased EVgo's pipeline for station locations to every corner of the U.S. In fact, when we overlay specific store locations of these well-known brands with EVgo's own proprietary network planning tool that accounts for the numerous factors that make charging infrastructure pencil, we've added nearly 10,000 potential charging cells that pass our internal investment hurdles today and could be added to EVgo's development pipelines. This rapidly expanding pipeline of premium station locations with strong unit economics combined with the cost-sharing potential arising from forthcoming federal funding provides EVGO with the opportunity to widely invest capital to expand our footprint to new places. With this in mind, after we file our third quarter 10Q, EVGO is planning to file a prospective supplement to our recently filed S3 in order to facilitate at-the-market sales of up to $200 million of our common stock. We plan to use the proceeds of this ATM program to opportunistically raise additional capital in order to take advantage of this robust and accelerating EV infrastructure sector. Turning to our performance. Once again, the theme is about growth and execution. During the quarter, stalls in operation or under construction increased to 2,625. We added a record 188 stalls during this quarter, and year-to-date, we have energized 487 new stalls on our network, 2.4 times more than the same period last year. Additionally, our active engineering and construction development pipeline reached its largest point ever at 4,534 stalls. As a reminder, while we want to invest in growing our networks, we also remain laser focused on overall profitability in the business and building sites that clear our internal rate of return or margin hurdles. The biggest issue we're facing on the installation front right now is timing on the utility side. At the end of the quarter, EVGO had installed over 130 stalls that were still awaiting utility power, with more than 100 of those being delayed more than six weeks. Unfortunately, persistent utility labor shortages and transformer supply chain constraints exacerbate utility work backlogs at the front and back end of the charger development process. We expect utility-related delays will continue to be an issue as power companies gear up for transportation electrification and work to make power systems resilient to the effects of climate change. EVGO will continue to work cooperatively with our utility partners and local governments to address these issues. We believe these challenges can be addressed working side by side. Throughput this quarter was 12.1 gigawatt hours, an increase of 51% over the third quarter of 2021, driven by ongoing EV adoption across the US and increasing rideshare electrification. While the rebound in rideshare electrification was a bit slower than anticipated during the first part of 2022, due to the dearth of EVs available to rideshare drivers, both Uber and Lyft have indicated that their electrification plans will be accelerating going forward. Uber recently stated that the company is focused on doubling the number of EVs on the road over the next year, from 25,000 to 50,000, as it strives to be fully electric by 2030. Remember, EVgo sees an outsized impact as rideshare drivers convert to EVs, given that they drive about three times more than average. On the retail side, we're encouraged by recent developments on the OEM front. Despite the challenges some of our OEM partners have had supplying cars to the market earlier this year, the future is bright. Cadillac has begun shipping its new Lyric model. Chevy Bolt and Bolt EUV sales have recovered following resolution of their battery recall. And Toyota and Subaru reopened sales for the BZ4X and Solterra following their recall. We expect to see greater contributions from our preferred partners moving forward. and we continue to see growth in Tesla drivers charging on the EVgo network. Which brings me to the topic of technology. Simply put, EVgo is a technology powerhouse. This is our key differentiator and sets us apart. Our investments to create a seamless integration between EVgo's hardware and software aim to create a differentiated experience for our customers, as well as high value margins for our investors and other stakeholders. We often hear from our B2B partners that EVgo has pioneered functionality that no one else has cracked. One example of this is Auto Charge Plus. Launched in September across the country, Auto Charge Plus sets a new bar for a streamlined EV charging experience by simplifying the process between a charge and a payment session. Once EV drivers self-register to the EVgo app, they can start a charging session at an EVgo station without a credit card, RFID, or even swiping the app on their phone. In the few weeks since we've launched, we've seen enrollment skyrocket and positive feedback from both new and existing drivers taking advantage of this faster and more convenient program. Notably, as Auto Charge Plus is also available for Teslas, EVgo is looking forward to welcoming even more Tesla drivers to our network. On the fleet side, as I mentioned earlier, our technology here is truly a game changer. EVGO Optima is our homegrown proprietary cloud-based software platform that helps ensure fleet EVs are charged in a manner that optimizes fleet logistics needs and operating costs. The user-friendly interface provides fleet managers with easy access to the most important data, while integrated customer service provides seamless communication. helping to ensure fleet uptime and service-level agreements are met. The early feedback from fleet managers has been extremely positive, as EVgo Optima has been built from the ground up as a fleet-centric application, rather than a repurposed adaptation of software meant for retail drivers like that being offered by some of our competitors. On the OEM front, we continue to work with our partners to leverage EVgo Inside's APIs, which are designed to seamlessly integrate into an automaker's branded app. This provides an automaker with the ability to offer its customers a fully integrated EVgo charging experience without switching between apps. We believe we're truly ahead of the market here. And finally, we're really proud of our efforts to lead the EV charging industry forward in terms of global standards and interoperability testing. EVgo is on the board of Charin, the leading global association promoting global charging standards, with CCS, MCS, and 15118 emerging as a de facto fast charging standard. And our EVgo Innovation Lab is a go-to for OEMs developing new EVs and for manufacturers developing new equipment to charge those EVs. In fact, in addition to a principal EVgo Lab location in El Segundo, California, We also have three remote testing locations set up at OEM facilities. This distributed approach enables automakers to test vehicles much earlier in the process, sometimes even before a prototype has been officially released. EVGO retains access to the testing software and remotely manages the process in support of the OEM design and commercialization process. Turning to slide eight. you'll find a brief update on the National Electric Vehicle Infrastructure Program, or NEVI. In late September, the U.S. government approved all 50 state plans, plus Washington, D.C., and Puerto Rico, meaning that states are now eligible to start the process to award their fiscal year 2022 and fiscal year 2023 allocated funds. The first round of investment in fiscal year 2022, which totaled $615 million, will help to build EV chargers covering approximately 75,000 miles of highway. We anticipate the first solicitations from the states this quarter or in Q1 2023 with initial funds deployed during the course of the year in 2023, which will be based on state procurement, RFP processes, and finalization of federal minimum standards. Additionally, the tax credits in the Inflation Reduction Act, or IRA, And in particular, the changes to U.S. Code 30C represent tailwinds for our industry and our business. We are pleased with these developments and believe they will serve to reduce carbon emissions as the world continues to embrace electric vehicles. That said, we expect it to take some time for the benefits to be recognized in our financial performance, as the Treasury Department is conducting requests for information prior to issuing guidance on the specifics of how the 30C tax credit will be applied. Other key provisions in the IRA, including the revisions to the Consumer EV Tax Credit 30D, First Ever Used EV Tax Credit 25E, and Commercial Vehicle Tax Credit 45W, should also support acceleration of EV adoption, with some key implementation questions also pending IRS guidance. We believe 30C and the other tax credits in the IRA will benefit EVgo, but we're not expecting to realize those benefits financially in the very near term. As one of the longest running, largest, and most reliable public fast charging operators in the US, EVgo's mission is to expedite mass adoption of electric vehicles for everyone. This quarter, in service to that mission, EVgo launched the Connect the Wants national EV charging recognition program. This program will celebrate leaders in the EV charging ecosystem for their achievements in driving the electrification of transportation. By recognizing these leaders, EVGO hopes to bring awareness and inspiration to the community working to electrify our transportation system. And with that, I will turn the call over to Olga to talk more about our financial results.