EVgo Inc.

Hello and welcome to the EVGO Inc. Q1 2025 earnings 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, and if you would like to ask a question during this time, please press star 1 on your telephone keypad. I would now like to turn the conference over to Heather Davis, Vice President of Investor Relations. You may begin.

Good morning. Welcome to EVgo's first quarter 2025 earnings call. My name is Heather Davis and I'm the Vice President of Investor Relations at EVgo. Joining me on today's call are Badr Khan, EVgo's Chief Executive Officer, and Stephanie Lee, Executive Vice President, Accounting and Finance. Our CFO, Paul Dobson, is out this week due to a loss in the family a few days ago. Today, we will be discussing EVgo's first quarter 2025 financial results, followed by a Q&A session. Today's call is being webcast and can be accessed on the investor section of our website at investors.ebgo.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 quarterly reports on Form 10-Q. The company's SEC filings are available on the investor section of our website. These forward-looking statements apply as of today, and we undertake no obligation to update these statements after the call. Also, please note that we will be referring to certain non-GAAP financial measures on this call. Information about these non-GAAP measures, including a reconciliation to the corresponding GAAP measures, can be found in the earnings materials available on the investor section of our website. With that, I'll turn the call over to Badr Khan, EVGO's CEO.

EVGO had yet another record quarter of strong results. Customer consumption on our network continues to rise, with average daily throughput per public stall rising by 36% versus the same quarter last year, and up more than five-fold in three years. combination of higher throughput per stall and more stalls resulted in an overall public network throughput growth of 60% versus last year, with Q1 representing the 13th consecutive quarter of double-digit year-over-year growth in charging revenues, which is every single quarter since we've been public company. Total revenue grew 36% year-over-year and a near tenfold growth in three years. We added over 180 new operational stalls this quarter, including extend stalls, and now have over 4,200 operational stalls. And finally, we began the year with a strong cash balance and prospects. We ended the quarter with 171 million in cash, cash equivalents and restricted cash. And at the start of April, we received the next quarterly advance from the DOE loan as expected. As you all know, In December 2024, after an 18-month process, we closed at a $1.25 billion loan guarantee with the Department of Energy Loan Programs Office that secures financing for our trajectory past adjusted EBITDA breakeven this year, leveraged free cash flow breakeven next year, and more than triples our installed base over the next five years throughout the United States. This puts us in a particularly strong the EV fast charging landscape. Looking at the macro environment, the impact of tariffs on EVgo, both directly and indirectly, is expected to be relatively minimal. That's because only approximately 25% of the total capex cost per store is subject to tariffs, with the remainder being domestically sourced equipment and raw materials and construction costs. Our fiscal 2025 net capex estimates as well as spend incurred in 2025 for 2026 vintage stalls. And in fiscal 25, we expected to incur around $45 to $50 million on imported chargers. However, we already have either inventory or on shipping containers just under half of that spend for imported equipment. Therefore, we expect an impact of around $4 to $5 million, depending on what the final tariff rate might be for these imports, what we negotiate with our suppliers, and whether we're able to expand our existing U.S. source production. In addition, we expect to deliver $10 million in capex efficiencies this year that more than offset the estimated impact of tariffs in 2025. Because we on Tesla EV sales, which grew over 35% compared to Q1 last year. Chevy Equinox EV, Honda Prologue, and Hyundai Ioniq 5 are among some of the best-selling non-Tesla models. It's especially encouraging to see this as the MSRP for the Equinox starts at around $35,000. Importantly, our business is increasingly not reliant on new EV sales in any one year. and is instead reliant on the overall number of evenings on the road. We estimate less than 10% of 2025 revenue to come from new EVs purchased this year. That percentage will shrink going forward as the EV car park grows. In addition, EVs sold in the US appear to have more domestic content on average versus ICE vehicles. Therefore, tariffs may have According to the DOE, the nationwide growth of DC fast charging stations has in fact been flat for the past seven quarters, with Q1 actually showing a 16% decline from the prior quarter. In a higher tariff environment, we expect the supply of new fast charging will continue to fall. That is because roughly half of new fast chargers deployed are sold to site hosts by companies like ChargePoint. which will likely see slower growth as site hosts pause or reconsider what they may view as discretionary investments outside of their core business, especially if these companies were relying on federal incentives that may also be on hold. Seven percent of new fast chargers that are funded by automotive OEMs other than Tesla are also likely to see slower growth as OEMs allocate capital to other priorities. Tesla's share of new fast charging has declined from around 70% in 2022 to less than 20% in the most recent quarter. Unlike other OEMs, it's unclear whether Tesla remains committed to the growth of fast charging given their other priorities. Oil and gas companies funding DCFC chargers made up only 1% of new chargers this past quarter, according to DOE. and have already announced changes to their capital allocation priorities. That leaves 14% of new chargers funded by a large number of small private companies that we expect will struggle to attract financing in this environment, especially because of their small scale. Unlike almost every other fast charging owner and operator, EVGO is singularly focused on fast charging, As a result, demand for fast charging represented by the growth in EVVIO far exceeds the supply of fast charging stations nationwide. This supply-demand imbalance has been one of the factors driving the five-fold growth in EVVO's throughput per public stall over the past three years and will continue to drive growth S&P Global's most recent base case forecast from March this year that takes into account the new administration's policies in electric vehicles suggests 31% of new car sales being fully electric by 2030, slightly above where China already is today. The downside forecast is 21% of new car sales below where China is today, translating to between 19 and 26 million EVs on the road by 2030. This is half of the target established by the Biden administration of 50% of new car sales by 2030. S&P Global's forecast for the supply of DCFC grows to 135,000 stalls by 2030, from around 50,000 at the end of 2024. In order to maintain the current ratio of EV to DCFC, the industry would need to deploy 40,000 fast chargers a year, which is over three times what was built in 2024. Given that we've now had seven flat to declining quarters of growth in DCFC supply, a flat growth scenario of no faster growth than today may even be too optimistic in a higher tariff environment. The result is a growing ratio of EV-VIO to DCFC which has driven the growth in easy-go throughput historically and a significantly higher ratio in both S&P's base and downside forecasts, which we expect will drive ongoing growth in easy-go throughput and utilization per stall, in addition to growth due to network expansion for the foreseeable future. In a higher tariff environment, we may see impacts to both the numerator and denominator in this ratio. leaving the overall supply-demand picture potentially even more attractive for EVGO than without the impact of tariffs. Let's now turn to progress on our four key priorities. Improving our customer experience, operating in CapEx efficiencies, capturing and retaining high-value customers, and securing additional complementary non-diluted financing to accelerate growth. As always, improving our customer experience remains our number one priority, and our strong momentum from last year has continued this quarter. Customers want a charger to be available when they pull up to an EVGO station, and we are deploying larger sites where our standard configuration is now six to eight stalls per site. At the end of the first quarter, 21% of our sites had six stalls or more. we continue to deploy ultra-fast high-powered chargers. The number of stalls served by a 350-kilowatt charger is now 52 percent, up from 38 percent a year ago. AutoCharge Plus, our seamless plug-and-charge capability, continued to gain significant traction in Q1 with auto-enrollments from OEM partners. percentage points this quarter versus last year, with 95% of sessions resulting in a successful charge on the first try. In summary, another great quarter of achievement in improving our customer experience. We've also made excellent progress on our efficiency priorities. Most notably, we took the MOU with Delta Electronics we signed last October and converted it into a signed joint development agreement to co-develop the next generation of charging architecture. EVGO and Delta are making meaningful progress on this initiative that's expected to lower our gross capex per stall by 30 percent. We anticipate production of these stalls to begin in the second half of 2026 and we plan to have a prototype by the second quarter of this year. We continue to drive operational efficiencies in our business with call center costs vintage stalls, including the impact of tariffs. EVgo's operations team has been diligently working to lower capex, and we're delivering savings from lower contractor construction pricing, material sourcing, and increased use of prefabricated skids. We expect further improvements in G&A as a percentage of revenue for 2025, while investing in the growth of our business. We also continue to make great progress on our growth priority of capturing and retaining high-value customers. 55% of EVGO's throughput came from rideshare, OEM charging credit, and subscription accounts in Q1. This provides EVGO with a relatively predictable baseload level of demand on our network. In order to drive overall utilization up while mitigating the impact of congestion, thanks to the investments effectively opening up capacity for more drivers during the peak hours. We expect the next major update to our dynamic pricing algorithms in the fourth quarter of this year. We launched native NAX connectors at our first site in February. The pilot of the technology validation is going well. We anticipate adding more NAX connectors to sites over the course of 2025. Later this year, we plan to launch the first of 400 new flagship stalls in partnership with GM with the goal of delivering an elevated customer experience. As a reminder, these sites will feature up to 20 stalls. They come with ultra-fast 350-kilowatt chargers, canopies, ample lighting, pull-through stations, and security cameras. And like all EVgo sites, will be located near a diverse set of amenities that customers can take advantage of while charging. Finally, we expect to expand the number of dedicated stalls serving autonomous vehicle partners, which could represent a very attractive source of potential growth for EVGO given we estimate we have a 20% share of operational sites serving this segment today. As for financing the growth of the business, we have now received both the first and second quarterly advances on our $1.25 billion loan guarantee with the DOE LPO. Sloan ensures we are fully funded to add at least 7,500 stalls, more than tripling our installed base over the next five years. Looking ahead to the rest of the year, we expect a complete transfer of our 2024 vintage 30C income tax credits. Over the course of this year, we expect around 30% of our 2025 vintage capex to be offset from state, local, and federal grants utility incentives, OEM payments, and 30C. Federal incentives in the form of the technology-neutral 30C alternative fuels credit and NEVI represent approximately 10% of our 2025 vintage capex. As we've said before, we are not particularly reliant on federal incentives, and our next-generation stall significantly more than the value of these federal incentives. And finally, given the very strong cash flows from our operating assets, we continue to receive inbound interest and evaluate additional complementary non-dilutive financing opportunities that would help fund the growth of any charging stations not included in the DOE loan funding to accelerate our growth and to provide diversity in our funding sources. Stephanie Lee will now cover our financial performance for Q1, together with our outlook for 2025.