EVgo Inc.

there will be a question and answer session. If you would like to ask a question during this time, simply press star followed with the number one on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you. I would now like to turn the call over to Heather Davis, VP of Investor Relations. Please go ahead.

Good morning and welcome to EVGO's second 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 Badar Khan, EVGO's Chief Executive Officer and Paul Dobson, EVGO's Chief Financial Officer. Today we will be discussing EVGO's second quarter 2025 financial results followed by a Q&A Today's call is being webcast and can be accessed on the investor section of our website at .edgo.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 risk and uncertainties, including expectations about future performance. Factors that could cause actual results different materially from our expectations are detailed in our SEC filings, including in the risk factors section of our most recent annual report on form 10K and quarterly reports on form 10Q. 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 BatterCon's Edigo CEO.

Thank you, Heather. Edigo had yet another excellent quarter with strong operational performance and achievement of important strategic milestones. We had particularly strong revenue this quarter, up 47% versus the same quarter last year. Adjusted EBITDA was more than $6 million better than last year, bringing us closer to our goal of breakeven Adjusted EBITDA for the full year. We had 4,350 stalls in operation and the end of the quarter with $183 million in cash, cash equivalents, and restricted cash, which is $12 million higher than the prior quarter. And most importantly, does not include $65 million in gross proceeds from the first drawdown from our commercial bank facility and expected 30 C sale proceeds in August. On July 23rd, we closed in the largest and first of its kind commercial bank financing for charging infrastructure in the U.S. for $225 million, with the ability to expand to $300 million and have already received a $48 million first drawdown. This is a major strategic milestone for the company, enabling us to accelerate our expansion and diversifying our funding sources with low cost, non dilutive capital. As you will see, we expect to be able to increase our ending 2029 public store guidance by approximately three and a half thousand more stalls than we had previously estimated to roughly 14,000 stalls. Strategically, EBITDA is now very well positioned competitively as one of the best capitalized players in the sector. As always, we are focused on being disciplined and allocating capital, leveraging debt funding sources and the growth of our balance sheet. At this time, we do not have a request in front of the DOE LPO for our next advance. One of the many attractive features of the DOE loan is that there is no time limit where we need to request advances for specific tranches of eligible costs we incur, other than the overall five-year availability period. Finally, we've passed enough milestones this year to be able to forecast a reduction in net capex per stall for 2025 vintage stalls by 28% versus our initial expectations. A reduction in net capex per stall of this magnitude results in significantly higher returns. The outlook for EVGo as an owner and operator of DC fast charging remains very bright, with demand growth outstripping supply growth. The latest independent forecasts project that the increase in electric vehicles in operation is outpacing the more modest increase in the number of DCFC stalls in the US. These latest forecasts take into account all of the federal administration's policies in electric vehicles, which results in EVVIO over four times higher than today by 2030. As we're seeing from GM, Ford, and many others, major automakers continue to prioritize a growing lineup of affordable electric vehicles that appeal to all customer segments. Forecasts of the growth in DCFC stalls are not as robust, but anecdotally, we see a slowdown taking place among both the number of smaller companies who are likely going to struggle to attract capital in this environment and also the small number of larger companies whose parents may be allocating capital to other priorities. The DCFC forecast shown here represents the industry continuing to grow at the same pace it did over the last 12 months. As a result, we expect that the recent trend of more electric vehicles per fast charger is likely to continue, resulting in a promising macro environment for in this coming five-year period, which we expect will continue to drive up both EVVIO market share and throughput per stall. This macro environment continues to be supplemented by multiple additional tailwinds that continue to show positive trends, like the electrification of ride share, autonomous electric vehicles, and more affordable vehicles in both the new and used electric vehicle markets, attracting more customers without at-home charging and thus reliant on public fast charging. In June, Uber disclosed that the number of their EV drivers globally was up more than 60% versus the year prior, and in the US, only just over a third had a dedicated home charger. We are very pleased to close the commercial bank facility provided by a syndicate of global project finance led by SMBC, and includes World Bank of Canada, ING, Bank of Montreal, and Investec. With an initial 325 basis point spread, this loan demonstrates the creditworthiness of our business that these commercial banks see, and the confidence the banks have in the resilience of the cash flows generated by the ultra-fast charging infrastructure EVGO is building across the United States, to give customers more choices to charge their electric vehicles. This facility is complementary and incremental to our $1.25 billion DOE loan with a similar structure with standard project finance terms. It offers tremendous flexibility and can be used to finance the build-out of more EVGO-owned store types, including dedicated hubs for autonomous vehicle partners. We received a $48 million advance on July 24th, and we have the ability to draw down on the facility monthly. We have the ability to go faster and build a higher number of stalls or go slower with lower deployment targets. All new EVGO-owned stalls can now be levered going forward. Additionally, this bank facility represents an important milestone in establishing long-term relationships with commercial lenders. We believe the opening of the commercial bank project financing market as a source of capital for public fast charging infrastructure reflects the majority of the company, the profitability of the EVGO network, and confidence in management. With the financing we now have in place, together with our targeted capex per stall and reinvesting excess operational cash flow over the next five years, we now expect to be able to more than quintuple our annual stall build schedule from 825 stalls in 2025 to up to 5,000 by 2029. That rate of growth in 2029 is more than double our earlier estimates. This accelerated pace meaningfully differentiates EVGO amongst US fast charging companies and results in a level of scale that will become harder for others to replicate over time and deepens the competitive moat around our business. The second strategic development this quarter is that we're now forecasting a 28% reduction in 2025 vintage net capex per stall from our original estimate. This is an exciting milestone. Even including the impact of global tariffs, we are still expecting an 8% improvement in vintage pros capex per stall versus what we initially expected for 2025. This improvement is driven by savings from lower contractor pricing, material sourcing, and increased use of pre-fabricated skids, some of which we shared in the last earnings call. Today, however, I'm able to share that we now expect vintage capex offsets to be around 50% higher than we originally expected, because more stalls we're operationalizing this year are expected to have state grants associated with them. Unlike many other charging companies, we have a large enough project pipeline where we can now move the timing of operationalizing assets from one quarter to another and from one year to another. That flexibility allows us to capture more state grants wherever those opportunities may arise. As a reminder, capital offsets come from three sources, state and utility incentives, OEM infrastructure payments, and federal incentives like 30C. Our forecasted performance this year is a reminder that regardless of recent changes to federal incentives, state grants incentives are alive and well. 30C will remain in effect for assets placed in service until the end of June 2026, nine months longer than many other incentives created by the IRA. As a result, we expect net vintage capex per stall to be significantly lower this year, materially enhancing our return on especially considering the top 15% of our stalls are already generating $50,000 in cash flow per stall per year against a net one-time average capex of $74,000. Two consequences of shifting our project portfolio to capture state grants is that a certain number of stalls that were due to be operationalized in Q3 will now shift to Q4. And secondly, stalls with state grants tend to be a less productive in terms of throughput per stall in the first year or two than other stalls without state grants. However, the lower capex more than makes up for it when we look at project returns. Our long-term expectation is to continue lowering gross capex per stall as a result of our next generation charging architecture that remains on track for the end of next year. That said, we conservatively do not assume capital offsets are as high as the last two years, which still results in very favorable project returns, especially given the higher annual cash flow per stall levels we expect to reach by 2029. That's now briefly turned progress on our four key priorities, improving the customer experience, operating in capex efficiencies, capturing and retaining high-value customers, and securing additional complementary non-dilutive financing to accelerate growth. Improving customer experience remains our number one priority, and our strong momentum from last year continues. This quarter, we experienced lower uptime on certain equipment types due to faulty firmware updates that were largely rectified in July, and we decided to take that opportunity to tackle some legacy hardware issues across multiple charger types that resulted in higher associated maintenance costs. These efforts are fully aligned with our goal to continually improve the customer experience, and we are already seeing these efforts pay off with much higher throughput per stall in July. Building larger public sites with six to eight stalls is now our standard configuration. At the end of the second quarter, 24% of our sites had six stalls or more. We continue to deploy high-power chargers. The number of stalls served by a 350 kilowatt charger is now 57%, up from 41% a year ago and 25% two years ago. AutoCharge Plus, our seamless plug and charge capability, continued to gain traction, accounting for 28% of sessions initiated. Finally, our customer success metric, or one and done, increased one percentage point this quarter versus last year, with 95% of sessions resulting in a successful charge on the first try. As we detailed in our first quarter earnings call in May, we expect that the impact of increased tariffs on our CAPEX will be more than offset with capital efficiencies we've identified and implemented, and there is near zero impact on our operating costs from tariffs. If you go continues to meet all our milestones in the development of our next generation charging architecture, we are jointly developing with Delta Electronics. We are on track to have prototype and initial deployment in the back half of 2026. We remain focused on improving the profitability of the overall business while investing in the future growth of the company. We expect continued improvement in G&A as a percent of revenue throughout 2025. Over half of our throughput in Q2 came from frequent use sources, ride share, OEM charging programs, and EVGO subscription plans. This quarter, we've added to our dynamic pricing, digital marketing, and customer acquisition and reactivation capabilities with the deployment and use of AI agents to optimize and increase the effectiveness of our campaigns. Certain geographies, we launched seasonal based pricing to help cover the increased costs from summer utility tariffs. Our second pilot site with native Naxx cables went live in June. The focus of the initial pilot in February was to validate technology, and for the second pilot, our focus is to get an early read on our ability to attract Tesla drivers with the Naxx cables installed. What remains very early, we are encouraged by the fact that since going live to the Naxx cables, this site has had significantly more usage from Tesla drivers as it had prior to installing the Naxx cables. Once we scale these cables across the rest of our network, and because our charging stations are faster than Tesla and closer to where Tesla drivers live, work, and go about their lives, we expect to see potentially significant growth in usage per stall. This is because we expect to greater share of Tesla drivers than before, and these drivers still make up the majority of EVs on the road. In August, we expect to add 30 more Naxx cables to more sites, and we expect to add around 100 Naxx cables to sites on a retrofit basis through the rest of the year. And finally, we are in construction of our first flagship sites with General Motors. We look forward to opening these stations, which will feature up to 20 stalls and offer features like overhead canopies, lighting for an elevated customer experience. We've made huge strategic progress on financing this quarter with the closing of a low-cost commercial bank facility. We expect to close our second sale of 30-seat income tax credits this week for our 2024 vintage portfolio for an estimated $17 million of gross proceeds. As I said earlier, we now expect 45% capex offsets for our 2025 vintage stalls. Paul will now cover more detail on the commercial bank facility and how that relates to higher long-term estimates, our financial performance for Q2, and our updated outlook for 2025.