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.

Thank you, Patar. I'll walk us through a summary long-term of our plans for this facility. Flexible loan structure allows EBGO to build over 1,500 new public and dedicated stalls over the next three years and finances the 400 existing public stalls we added as collateral. As Patar mentioned earlier, the facility allows us to finance stalls that wouldn't have been eligible for debt financing under the DOE loan. The interest rate is so far plus .25% with a 25 basis point increase at the beginning of year five. Facility has a five-year term and a three-year deployment period. EBGO will be able to draw against the loan facility monthly after stall is operationalized for 60% of costs including capex, capitalized GNA, and $31,000 of deployment expenses. As collateral for the loan, EBGO contributed 400 operational stalls into a project level SPV and we received 48 million gross proceeds in July after closing. We expect to see incremental network growth from this facility starting in 2026 as it typically takes EBGO 12 to 18 months to get the site operational. In terms of expected stalls operation we are now including estimates of growth net of removals averaging roughly 130 per year through our EBGO renew program over this entire period where we are removing legacy equipment from the network. EBGO now is fully capitalized to have roughly 14,000 projected public stalls by the end of 2029 which will increase operational efficiencies by leveraging economies of scale. This is approximately 3,500 stalls more than our previous estimate. As described in our fourth quarter 2024 earnings call in March, our unit economics continue to grow and we expect to realize the operating leverage in our model through increased throughput per stall per day, leveraging fixed costs and stall dependent costs such as rent and a reduction in maintenance costs through our next charging architecture. EBGO anticipates that in 2029 our stalls will generate 90,000 to 104,000 per year in revenue charging net gross margin per stall in the range of 50 to 52 percent and annual cash flow per stall in the 38,000 to 47,000 dollar range. Adjusted EBIDOT generation is particularly strong because these per stall cash flows include all costs other than fixed costs which will be covered by this year. These stall based cash flows fall straight to the bottom line so by 2029 the additional roughly 5,000 stalls that we plan to build that year will generate approximately 200 million incremental adjusted EBIDOT annually. As we have discussed before this represents a very compelling annual return on a one-time net cap tax per stall of 95,000 dollars. Applying this high and low end annual cash flow per stall from our unit economics to the anticipated stalls in operation at the end of 2029, you have a very compelling business with 1.2 to 1.5 billion in annual revenue from the owned and operated charging business generating 380 million to 570 million in annual adjusted EBIDOT at 32 percent to 38 percent margins. We

are

assuming our total adjusted GNA increases up to two times in real dollar terms as we add to our growth GNA to build out the network which again demonstrates the operating leverage in this business as the With the full utilization of the current loans we expect to exit 2029 with a low net debt to adjusted EBIDOT ratio of under 2.5 times which provides us with additional debt capacity to finance growth well into the future. Since infrastructure companies with predictable adjusted EBIDOT generation and margins typically have higher leverage ratios of five to six times our expected ratio of less than 2.5 would provide us with significant incremental leverage capacity. Now turning to more detail on our second quarter results. Over the past three years we have grown our operational stall base by 2.6 times while our revenues have grown 14 times. Increasing our scale and maintaining our focus on costs allows us to deliver improving online performance. Our public network throughput per stall has grown 2.5 times in the last two years significantly outpacing our public charging network stall growth of 1.4 times. Throughput per public stall was 281 kilowatt hours per stall per day in Q2 compared to 230 a year ago a 22 percent increase and up six percent sequentially. After a recent firmware update and incremental investment in Q2 maintenance July average daily throughput approached 300 kilowatt hours per stall per day. In the second quarter total public network utilization increased 22 percent up from 20 percent a year ago. Total throughput on the public network during the second quarter was 88 gigawatt hours a 35 percent increase compared to last year. Revenue for Q2 was 98 million which represents 47 percent year over year increase with growth to nearly all revenue categories. Total charging network revenues were 51.8 million exhibiting a 46 percent year over year increase. Extend revenues for 37.4 million delivering growth of 35 percent. We delivered more charging equipment to PFJ in the second quarter and anticipated as they accelerated their purchasing. Ancillary revenues of 8.8 million were 157 percent versus last year driven primarily by growth of the hubs business for autonomous vehicle companies. Charging network growth margin in the second quarter was 37.2 percent up 210 basis points from the prior year. Adjusted gross profit 28.4 million in the second quarter of 2025 is up from 17.7 million in the second quarter of 2024. Adjusted gross margin was 28.9 percent in Q2 an increase of 240 basis points compared to last year. Adjusted GNA as a percentage of revenue also improved from 38.5 percent in the second quarter of 2024 to 30.9 percent in Q2 of this year demonstrating the operating effort to the fact. Adjusted EBITDA was negative 1.9 million in the second quarter of 2025 a six million dollar improvement versus the second quarter of 2024. Now turning to our 2025 guidance. DDCO anticipates will add 800 to 850 new public and dedicated stalls in 2025 with over half the stalls going operational in the board of total fiscal net cap tax has been reduced to 140 million to 160 million reflecting the capital efficiencies we are realizing this year and faster expected development time line resulting in less capital span in 2025 for 2026 into stalls. In addition we forecast to add new extent stalls of 375 to 525 this year. Revenue for the full year is expected to be 350 to 380 million dollars an increase of 5 million at the midpoint compared to our prior guidance. Charging network revenue are estimated to be roughly 60 percent of total revenues in 2025. We're expecting sequential improvement in the third and fourth quarters for charging network revenues. We expect a 2025 charging network margin profile to be like 2024. Our third quarter charging network margin will decrease seasonally due to higher summer electricity rates and resume its upward trajectory in 2024. Full year extend revenues are anticipated to increase around 25 percent versus last year and ancillary revenues will be more than double this year. We expect both extend and ancillary revenues will be lower than Q2 in the third quarter. Extend revenues are expected to be relatively evenly distributed in the third and fourth quarters and ancillary revenues are anticipated to have a much higher fourth quarter following revenue recognition milestones. We're investing in accelerating the growth of EVgo including investments in our operations and deployment team to increase stall growth as well as our next generation architecture. Adjusted GNA for 2025 is expected to be flat to the Q4 2024 run rate plus inflation, reflecting investments in growth with some offsets due to efficiency. These investments for accelerated growth will continue in 2026 and we therefore anticipate similar growth in adjusted GNA next year. EVgo continues to make progress towards adjusted EBITDA break even. In 2025 we continue to expect adjusted EBITDA in the range of negative five million to positive 10 million. Following our anticipated revenue trajectory for the back half of the year we expect Q3 adjusted EBITDA to be negative and lower than Q2 and positive on the fourth quarter. Top-line growth financed with low cost non-dilutive capital coupled with leverage in our operating models expected to deliver compelling shareholder returns. We look forward to keeping you apprised of our progress. Operator you can now open a call for Q&A.

At this time I would like to remind everyone in order to ask a question press star then the number one on your telephone keypad. We encourage everyone to limit yourselves to one question and follow up. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of David or Carl with Morgan Stanley. Your line is open.

Well hi thanks good morning. Morning. Maybe first on the capex trends and offsets here great to see and I was just wondering if there was a geographic trend that's driving the capital offsets going to 45 percent. Were you targeting states in a different way based on demand that you're seeing or were there changes in state incentives just wondering what shifted that geographic trend around?

Yeah well I think thank you David for the question. I think that one of the key things we wanted to communicate here is that not only are we focused on EBITDA generation with strong margins um we are also very much focused on delivering strong returns on capital for shareholders and so being able to lower our vintage capex per stall by almost 30 percent is very much aligned with that. Our first priority of course is to lower gross capex per stall which is a trajectory we've been on for some time and we've been successful at and we are looking to continue with our next generation architecture. On the offsets you know we're absolutely pleased with where we are this year. We had a very high level of offsets for vintage 2024 in the first 50 percent range. This year the offsets are also looking like they're going to be very strong. We've seen that already for our first half year deployments where offsets are at that sort of 45 percent range and these grants are really coming from all over the United States to be perfectly honest. For the first half of the year we have a lot of grants and incentives from California but the rest are coming from states like Florida, Ohio, Pennsylvania, Washington and so it's you know it's really all over the United States. I think a key point here of course is that you know regardless of what happens with federal incentives, state grants and utility incentives remain alive and well.

Excellent, yeah thanks for that caller. Good to see and I was just wondering any updates on the DOE loan in terms of availability, any recent conversations you've had around drawdowns that you would highlight. I know you're not currently looking for one but curious just any background out there.

Yeah I mean the project is performing very strongly and that's the nature of the dialogue that we have with the DOE. It represents excellent credit quality which hopefully you can see from the earnings today. We are not dependent on the IRA or 30C remaining in place and so our dialogue with the DOE LPO staff remains you know a very productive conversation. I think the big strategic news this quarter is that we are no longer reliant on just one source of financing. The proceeds as we just laid out today from the commercial bank loan and the gross proceeds from 30C are three times what a quarterly advance would have been if we from the DOE this quarter and so we're very focused on not just being disciplined in our allocation of capital but also disciplined in the growth of our balance sheet and I think the good news or one of the many sources of good news is that there's really no time limit on when we request advances for eligible CAPEX with the DOE loan other than the five-year availability period and so we can incur the CAPEX now and if we want to drop it into the DOE loans you know at some point within the next five years we can or with the commercial bank facility. Of course the commercial bank facility also allows us to fund stores that are not eligible for the DOE loan which I think is also very attractive. It allows all of our stores at this point to be left open for

people. Yeah absolutely. Okay great well thank you so much.

Your next question comes from the line of Chris Dendrinos with RBC Capital Markets. Your line is open.

Yeah good morning thank you. I wanted to ask a little bit on the utilization rate this quarter and I think you mentioned that there was a firmware update that went through it and then in July you all had like I guess maybe a significant increase in the utilization rate as that got rectified. Maybe just provide a bit more detail about that maybe how long the issue was lasting and sort of what you're seeing now coming out of that.

Thanks Chris. Yeah we did have a faulty firmware update at the beginning of the quarter in Q2 which you know is largely addressed at this point. Given that we had these issues we did proactively take that opportunity to address some legacy charger issues at the same time and invested in maintenance to get really just to get a stronger network. We thought that made sense to tackle both issues at the same time and then as we said on the call we can see average throughput per stall for July approached 300 which is quite bit higher than what we saw in the Q2 average. I think what's really kind of most interesting here is that as an indication of true demand on the network the average throughput on the chargers that where we weren't experiencing these issues was meaningfully higher than the chargers where we were taking these steps on maintenance and the firmware and I think that actually also really validates the decision and the path that we're on with our next generation architecture where as I said before I don't believe that really anybody else in our sector or very many others in our sector is able to do where we own the firmware and the development of critical components like the dispenser and it's very much part of our journey of taking that customer experience to the next level.

Got it thanks and then maybe on the next cable and you highlighted some promising I guess call it initial results from some of the deployments that you've done so far. I guess how are you thinking about deploying those longer term and sort of what are you looking for that would maybe drive you to accelerate deployment or are you already seeing things given the kind of results you've seen so far that would would drive you to maybe try to accelerate the deployment of those next cables thanks.

Chris I mean I think that the autonomous vehicle space are both I think really interesting sources of upside for the company here and up we can talk about the AV space maybe later on but on the next you know we had a couple of pilot sites in the first half of the year one was around technology validation it's super important that we are you know focusing on the customer experience making sure the technology works but the second site was really geared around are we able to attract more Tesla drivers and I would say that I think the team is you know really pretty excited about the results they're early but you know what what they said on the call is that Tesla driver usage was significantly higher on that site than pre-installation of the next cable. I do think it's early days we're going to have about 30 cables next cables installed in August and we're at this point we're looking at 100 for the full year these all retrofit before we start doing native so not retrofit but original equipment connectors in next year but like I mean I think that if we continue to see what we saw so far you know for sure we'll be looking at our ability to deploy more next cables but you know we want to just be certain about this everything that we've done at AVgo has been very thoughtful and very analytically based whether it's the algorithms site selection you know through to the AI in our marketing or AI agents in our marketing customer outreach here we don't want to pull out a productive CCS cable unless we're sure we can make it an even more productive next cable which again the first site is definitely showing but that's what we're looking at.

Thank you.

Your next question comes from the line of Bill Peterson with JP Morgan. Your line is open.

Good morning this is Kani on for Bill thanks so much for taking our questions. Your updated build schedule looks you know quite robust especially in the 28 to 29 time frame. Can you help us understand why the builds are so back half-weighted if you have the you know liquidity available to you now and how do you think about balancing the EV-VIO to DCFC ratio across the market versus capturing market share early on from you know competitors potentially?

Yeah I mean I look I think the on the build schedule there are really three things that have increased the schedule versus what we last indicated which would have been about six months ago after the DOE loan. Those are the the commercial bank facility and the fact that we are lowering our capex per stall. We've been talking about it for a year but we never reflected that lower capex per stall in our long-term forecasts and then lastly we are generating you know quite significant excess operational cash flow and so we thought for simplicity's sake we would assume that we'd be reinvesting that cash flow into into new stalls. To be honest the reality is as Paul said we've actually got fairly you know fairly you know a reasonable amount of capacity for additional leverage in the back half of this five-year period but regardless we think that's a good enough proxy in term and that results in a very significant increase in and of stalls that we deploy that we're now fully capitalized for which I think is the important point. In terms of whether we could go faster in the very near term the next year or two we know we really are we've been talking about a 12 to 18 month timeline that takes from start to finish to deploy stalls and that's that's still you know I think in place. I think in the in the medium term though you know we are looking at ways where we can reduce that overall elapsed time. We know and the market knows that it is possible to deploy at a much higher rate. We've seen certainly one competitor deploy at a significantly higher rate and of course we've got a lot of folks in our team from Tesla today and so you know I expect that over the course of the next year or so you may hear me provide updates on what we're doing to be able to reduce that elapsed time and effectively go bigger and faster.

I appreciate that Koli thank you. Maybe to follow up on an question about utilization should we expect to see any kind of seasonality from here on out and do you maybe expect to see increased usage by Tesla users with the NACS integration driving higher utilization over time? Also totally recognize that also we've seen third party reports that utilization kind of fell in the second quarter across the US public network so if there's anything else to call out there that'd be great.

Well for sure on the NACS I mean that's been the hypothesis that we've talked about and so to the earlier question you know we are quite excited about that. It's early days and we don't want to get carried away but I think it's really important just to bring out something that we've also been talking about which is that we saw pretty healthy growth in throughput per stall sequentially and that was because of rising charge rates. The higher the charge rate the less the utilization we need for the same kilowatt hours dispensed. Our long-term forecast is actually only 23 to 26 percent utilization but with an 80 kilowatt charge rate and that actually translates to about a usage per stall kilowatt hours per stall that's about 60 percent greater than today. If we look back over the last three years our charge rates have actually grown about 20 kilowatts in the last three years and that's when we had slower chargers. Three years ago only 12 percent of our chargers were 350 kilowatt today it's about 57 percent. Three years ago the charge rates in the cars were slower so you know 20 kilowatts in three years going backwards our long-term unit economics as you can see in the charts suggests a growth of just around 30 kilowatts but in four and a half years but with faster machines and faster charging cars and so we're you know this is a tailwind that we've been talking about and I think we're really seeing that come through and so you know it's really not just about utilization it's really also about utilization and charge rate that's driving the throughput per stall up and we're really pleased to see that. And to your question about seasonality, yes we do have seasonality in charge rates typically. We've seasonality in different parts of our business but on charge rates you know there tend to be a little lower in the winter months tend to be a little higher in summer months but the you know the growth that we've seen in the last three years you know. Operator can we go to the next question?

Your next question comes from the line of Andrea Shepard with Cantor Fitzgerald your line is open.

Hey good morning everyone congratulations on the quarter and thanks for taking our questions. Yeah I think a lot of our key questions have been asked but I wanted to maybe hone in on self-driving technology you know as we're ramping up robotaxis and self-driving across the country. I'm curious if you can maybe give us a sense of kind of your strategy to capture you know as much of this market share as possible you know. How are you thinking about capturing these autonomous vehicles that are ramping up and what are some plans to maybe differentiate eVgo. Thank you.

Yeah I mean look we you know along with the Naxx cable I think that this is a one of the two sources of upside in the business it's probably not in anyone's forecasts. We do think it's a really interesting and potentially significant source of upside if indeed the AV space grows which certainly it does seem as though it's going to. I know as you as I think you pointed out and others have these are these are these are electric these are going to be charged in slow charging locations that makes zero sense. So we know we have been building and operating dedicated sites for autonomous vehicle partners for a number of years. Last year we more than doubled the number of stalls at these dedicated sites to serve this space to 110 stalls and we actually separated it out in our stall disclosure and our public disclosure. It's sort of wrapped up in what we call ancillary at the beginning of this year. As Paul said in our guidance we do expect to see you know more than doubling of ancillary revenues this year over over last year and so we're we're pretty excited by it. You know we think that the counterparties that we work with are are pleased with the way that we're able to deploy fast charging speeds that are appropriate for those vehicles. Obviously we're pretty good at it building charging sites whether they're public or for dedicated and so you know we think that we've got you know a great relationship with these folks and we're excited about the dialogue that we're having with them and of course now that we're fully capitalized and the commercial bank facility allows us to to lever those stalls where we don't think they're eligible for DOE loan funding. We think we're in actually a really pretty good space and pretty good place.

God thanks Vidar that's super helpful appreciate that and maybe just a quick follow-up can you just remind us you know what are maybe the the key catalysts to look for maybe in Q3 and Q4. Thank you.

Well look I mean you know we are just focused on on executing the business. You know Andres we are we're we're we're fully capitalized at this point. We know the the charger issues that we talked about the firmware and our choice to invest in the maintenance of some of these legacy issues is largely behind us but we expect to be pretty much wrapped up with that activity by you know the early part of this Q3 period. You know I think that just sort of just watch us execute that's we're just heads down executing and that's really what we're focused on.

Got it thank you so much congrats again I'll pass it on. Thanks a lot.

Your your next question comes from the line of Stephen Gingaro with Steve Phil your line is open.

Uh thanks and good morning everybody. Hi Stephen. Two things for me the first is I'm not sure you'll want to answer but when we think about your guidance for this year do you think as you get into next year you'll be positive even though in every quarter?

Yeah Stephen you know we're not gonna we're we're not going to get into the guidance for 2026 just so early you know but you know I think that if you think about what's really driving EBITDA for us it is the measure that we've spoken about for the last year you know the last couple last several years now which is that throughput per stall per day and that's rising. That continues to rise it's rising sequentially yes there's sometimes seasonality in that again in the you know that's going to be a big driver of of growth in the business and you know that's what we're seeing so I think that's probably all I'm going to share this point in terms of 2026.

That's fair and I guess the other thing you mentioned earlier in the call and you prepared remarks about the the economics of some of the chargers that are being driven by grants and maybe being a bit later in the beginning of the life cycle. Is that something that we will observe in the numbers we're shopping through throughput per stall like just so we kind of know what to look out for or it's just not big enough to kind of really move those numbers around too much?

You know it can a little bit Stephen you know and I think that you know the I think the really important point here is a couple points here is that these are not federal incentives right so that's I think number one I think that the the state and utility space is very productive and supportive for EV charging infrastructure build out. You know I think that the second point is that even if they're a little less productive in the first sort of periods first few periods these are phenomenally strong returns on capital invested and so you know from our perspective you know yes we're obviously looking at EBITDA generation and at very strong EBITDA margins which is you know the business that we played out here but it's also important to us that we're deploying capital that's delivering strong returns you know for shareholders on the capital invested and I think that's what we're seeing with some of our choices. I think the fact that we've got such a large pipeline which you know a lot of other you know smaller charging companies just don't have allows us to move some stalls where we think we can get some some great grants from one quarter to another or from one year to another and that's what we saw this year where we did actually move some of our sites around we had reported it forced us to push some sites from Q3 into Q4 but we thought that was worth it because the just the level of offsets is just so great and returns of course that capital is so strong.

Great that's great detail and if I could ask you one other quick one I understanding the next cable rollout are we big fans of Tesla but not everybody is these days is there any targeted marketing that you're thinking about or you've done for Tesla drivers can you make sure these stickers on Tesla's that owners that are mad at etc is there has anybody thought about something like that you've done or are you thinking about any kind of campaign like that?

Yeah I mean look as a look I know that this space is very feels like it's very heavily politicized we know we're running this business as an infrastructure business where we're deploying capital that's returning strong returns for shareholders and strong generations strong margins we try not to get too political about stuff we just think that's not necessarily always the best thing however you know we're very analytical so where we're putting these next cables over the course of this year are in locations where we know there are Tesla drivers where we those Tesla drivers we expect will come over to our stations because there isn't a Tesla supercharger nearby and as I said on the call today you know we're just taking our capabilities to the next level we've got these AI agents now that are creating messages and they are figuring out you know which customers to send which message to at what time and I think that we're you know that's sort of you know broadly what we're doing to get to the right level of interest at our stations at the right time and I think that for the next cables we're attracting Tesla drivers with with frankly charging stations that are faster these are 350 largely 350 kilowatts tools that we're deploying today versus the supercharger network at 250 and closer to where they label their amenities we think that it's a very interesting and successful should be a very successful approach

thanks as always great detail I appreciate it

your next question comes from the line of Craig Urban with Ross Capital Partners your line is open

Good morning and thanks for taking my questions. Paul in your prepared remarks you mentioned the ancillary revenue progression over the next couple quarters the fact that we should have a pretty strong fourth quarter can you maybe give us a little bit of color as far as the strength we had in the second quarter and how that's likely to materialize relative to you know your execution over the last couple months and anything else you could share to help us understand you know the way this is rolling out

sure yeah so yeah we did have strong non charging revenue overall in the quarter both ancillary and the extend business so the extended business I'll just talk about that one for a quick second so we what we saw was higher level of equipment sales with extend as as our partners sought to bring forward equipment purchases and then with that ancillary revenue a large part of that growth is due to our due to our hubs business so when we set our guidance for the year the hubs business is a relatively new business we're still learning you know what what the economics could be and negotiated contracts and so now we've got better line of sight overall into what our hubs business is going to generate this year in terms of in terms of revenue so with their in the ancillary revenues which is you know largely the hubs business we expect it's going to more than double uh from last year from 2024 we're expecting also to have a much higher fourth quarter as well given some of the revenue recognition nuances in the in the hubs business again it's largely because we now a better line of sight into the nearer term as to where we expect it's going and there is some lumpiness to it I will admit with the hubs business due to some of the accounting and as we go forward and it becomes a much bigger part of our of our revenue mix we'll provide more specific guidance on it that I think will be helpful

thank you for that but so then botter um you're clearly executing well um versus your financial targets right you're you're delivering you know and you have been for several quarters but it does look like you're adding a little bit of expenses to the model so maybe maybe there's a bigger opportunity or a different opportunity set can you talk a little bit about your priorities as you as you look for opportunities for investment over the next couple years you know real time pricing I guess is one thing that's got a lot of attention over the last several months you know there's several things we could touch on what do you see as as the most important areas for investment at EB go over the next over the next several quarters

thanks Greg I mean look the the the single biggest use of cash in this business is the capital that goes into the charging infrastructure and so you know we are very focused on both capital efficiencies uh per stall that's gross capex per stall you know which we've talked about in the else sets for quite a bit here but the first priority is on gross capex per stall which we've been lowering uh but I think in part of that journey in terms of your question is the investment we're making into our next generation charging architecture you know we are you know our strategy is to be able to get the benefits of being vertically integrated without being vertical without the the risks and the costs of manufacturing that's why that partnership with delta electronics is so important it's why the you know our taking ownership of the firmware which is the the issue that we saw in q2 is so important and it takes that customer experience the next level that is what we're investing in and we see that investment show up in op ex but ultimately it's the goal there is to lower our gross capex per stall in line with the slide that we showed uh earlier uh you know for the second half of 2026 but you're right we're also investing in marketing in customer marketing custom approach the databases these ai agents we've invested in over a long period in the algorithms behind our site selection which we think is one of the many sources of competitive advantage for us so you picked up on dynamic pricing is in an area of investment since last year again which we can see paying off in the unit economics schedule so we're we're thrilled but you know I think the I think one major maybe the last point to leave is that the company has tremendous operating leverage if you look at the fixed costs in this business versus the total g a it's pretty high and so once you cover your fixed costs all of that cash flow above fixed costs falls at the bottom line and that's why this business model is just so to me so compelling the the eva generation uh after this year is it's really pretty exciting uh and that's what we're trying to do with long-term financials

fantastic and and just another one if I may firmware you mentioned the firmware issue in the quarter um can you maybe um share with us what a what sort of a headwind this was on throughputs across the network or any other color for us to understand the financial impact

yeah I mean look we we said that in july um the firmware issues they're kind of at this point they're largely behind us we are we we did at the same time decide to take some put some stalls into maintenance because we're seeing these issues anyway um in terms of customer experience so that will be largely addressed through the first part of q3 but if you look at our july throughput it's it was approaching 300 kilowatt hours per stall per day and that's you know that's quite a bit higher than what we saw in the average in q2 and that's you know that's probably a good enough proxy for uh you know where where throughput you know for your question in terms of what throughput could have been

excellent well thanks again and congrats on the strong performance thanks so much

your next question comes from the line of Christopher Piers which need to have manned company your line is open

hey good morning everyone I was just wondering is it are you seeing increased competition for ride share drivers I mean I know it's just one article one headline but you know we talked about 40 plus stalls going in at lax and things like that I just was wondering if sort of more people are realizing how interesting this business is or the frequency of which these drivers you know have to charge

uh I mean look it's it's hard but because there's so many companies in the space that are private and small um uh you know it's hard it's hard to know to perfectly honest when we look at our own throughput your ride share you know it's it's been pretty steady in the 20 to 25 percent of our total kilowatt hours for I don't know how many quarters at this point um it's easily maybe a couple of years at this point so uh you know ride shares going great for us has been a steady contributor to our kilowatt hours in aggregate that remains the case we're thrilled we've been saying forever that ride share is a uh a significant source of of upside that's beyond that battery electric vehicle to dcfc charging ratio which is also a a macro supply demand factor that benefits the business so yeah we're thrilled I mean I think that a lot of companies smaller private companies in this space uh you know you know anecdotally you know we we we wonder whether they'll they'll be able to attract capital uh quite honestly just because there's more scale

got it okay and can you just touch on lastly asp per watt it looks like it was up pretty smartly quarter over quarter and that's after a one q increase from four q last year I just wanted to kind of you could touch on pricing power or is this dynamic pricing that you're kind of able to flex or is this you know people that are on a monthly plan but because of the firmware issue the the charger that they go to down so you had a one-time benefit there

yeah so I'll take that one so yeah we have seen our revenue particular pricing increase as we've talked about on other other calls as well we're continuously testing um you know our pricing and our pricing programs dynamic pricing we're just talking about ride share and trying to incentivize ride share drivers to go you know off-peak and it's all resulted in us you know having the ability and you know watching customers reaction to seeing you know how much we can move prices up we also though you know when we look to price we also look at you know what is the what is the revenue minus our our throughput costs which mostly are energy costs and so as energy costs increase or decrease you know we want to make sure that we maintain a spread or you know widen that spread to some degree and I think that's the most important point you know in the quarter where we saw that spread increase last year from I think 29 cents a kilowatt hour to 32 cents kilowatt hour which is right in the middle of our long-term guide so we're kind of approaching the spread where where we think you know long-term you know it could end up but we'll continue to test these programs with customers making sure that we're delivering value to our customers retain them looking at the long-term value of customers as well not just for the short-term pricing opportunities uh to make sure that we're maximizing the value and increasing retention as well

okay thanks for the detail appreciate it

I will now turn the call back to Bidar Khan CEO for a closing remark.

Thank you everyone.

Ladies and gentlemen that concludes today's call you may now disconnect thank you and have a great day.