EVgo Inc.

Thank you for standing by. At this time, I would like to welcome everyone to the EVGO third quarter 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. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Heather Davis.

Good morning, and welcome to EBGO's third quarter 2025 earnings call. My name is Heather Davis, and I am the Vice President of Investor Relations at EBGO. Joining me on today's call are Badar Khan, EBGO's Chief Executive Officer, and Paul Dobson, EBGO's Chief Financial Officer. Today, we will be discussing EBGO's third 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.enigo.com. The call will be archived and available 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 in the risk factor 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 Thad Arkhan, EVGO's CEO.

Thank you, Heather. EVGO delivered another solid quarter of results, furthering our position as an industry leader built for long-term success. We delivered total revenue of $92 million and record charging network revenues. We ended the quarter with almost 4,600 stalls in operation and expect to see a very large fourth quarter for stall deployment. And we continue to see improvement in adjusted EBITDA. From a liquidity standpoint, we are in a very strong position with a higher cash balance at the end of the quarter than last quarter. In October, we received the latest advance for $41 million from the DOE loan, which has been used to accelerate the nationwide build out of EV charging infrastructure, offering American drivers more choices on where they charge. As you recall from the last call, we closed on a first of its kind transformational commercial financing facility in July for $225 million with potential to expand up to 300 million, which we believe reflects the confidence these banks have in the resilience of the cash flows generated by our ultra-fast charging infrastructure. We have now received two draws from this facility for a total of $59 million. We've expanded our pilot for J3400 connectors, more commonly known as NACs, and now have roughly 100 NACs cables installed. We're encouraged to see an increase in Tesla's charging at EVO. And we continue to improve returns on capital deployed by lowering net capex per stall, with 2025 vintage net capex per stall now expected to be lower than our initial plan by 27%. Unlike other companies in the EV charging space, EVgo's revenue has grown consistently and predictably faster than the growth in EV vehicles in operation, growing at double the CAGR of VIO growth over the past four years. This is due to both market factors and company-specific factors, and we believe this outperformance of revenue growth over VIO growth is set to continue for the foreseeable future. Today's market-wide tailwinds include higher usage fueled by rideshare electrification, expansion of affordable vehicles, bringing more drivers to public charging, faster vehicle charge rates with a shift towards larger, less efficient cars. And historically, EV vehicle miles traveled has steadily closed the gap to their ICE counterparts. Company-specific factors that are driving EVGO's outsized growth include our network planning, which looks for better locations with high utilization compared to the rest of the industry, building better charging stations, and our expanding network effect of more than 1.6 million customer accounts. The third quarter saw a historic number of EV sales in the U.S., ahead of the federal tax credits expiring. While we won't speculate on the level of EV sales in Q4 and 2026, it will result in an ever-increasing number of EVs on the road. Although EV projections today are lower than in the past, the latest forecast for EV VIO growth remains strong, albeit with a slower rate of growth. Our charging revenue forecast based on our updated unit economics and forecasted store growth we discussed last quarter also conservatively assumes a lower rate of growth than we've delivered historically, and yet still represents three to four times annualized growth from today. As we noted earlier, we are nearing a critical milestone, delivering break-even adjusted EBITDA, which we expect to achieve in the fourth quarter. Over the past four years, quarterly revenue and gross profit have accelerated 15 to 19 fold, whereas quarterly adjusted GNA has only grown modestly because most of our GNA is actually fixed. As a result, we are predictably reaching adjusted EBITDA inflection to positive in the fourth quarter. But after this inflection, EVGO has two sources of operating leverage that will position us for accelerated adjusted EBITDA growth in the future. First, and something we have been benefiting from over the past four years, is that we have leverage within our charging network cost of sales. Approximately 28% of our cost of sales is fixed on a per-stall basis. So as throughput per-stall grows, so does the charging network gross margins. These fixed costs on a per-store basis include rent and property taxes. Secondly, once store-based cash flow or charging network gross profit less sustaining G&A exceeds the total of growth and corporate G&A, which are largely fixed, all profits from the charging network fall straight to the bottom line, accelerating adjusted EBITDA growth. With approximately two-thirds of our G&A cost base largely fixed today, This represents very strong operating leverage. In fact, excluding growth G&A, EVGO is already adjusted EBITDA positive, but we are choosing to incur growth expenses given the strong returns associated with deploying new stalls. Making this even more attractive for investors is that we have the financing in place through 2029 to deploy all these new stalls without the need for any additional equity capital. The expected result is a very attractive business by 2029, with half a billion in adjusted EBITDA at mid-30s adjusted EBITDA margins. For almost two years, EVGO has been delivering one of the highest levels of network usage across the industry. Again, this is driven by both market and company specific factors. Average daily throughput per stall is an important KPI to view network performance, and it is growing. driven by both time-based utilization as well as charge rates, both of which have been growing for the past four years. Rising charge rates are a significant tailwind we benefit from, as higher charge rates deliver more kilowatt hours at the same utilization level and tend to result in higher levels of EV adoption, in turn increasing demand for our fast chargers. Higher charge rates also improve returns on capital deployed because they allow us to dispense more kilowatt hours from the existing assets without the need to deploy more capital. Higher charge rates come from improved battery technology and EVs, as well as easy-go deploying more 350-kilowatt ultra-fast high-powered infrastructure. Average daily throughput per stall has grown more than sixfold from less than 50 kilowatt hours in Q1 2022 to 295 this quarter. And we conservatively assume only slightly higher utilization by 2029. But with rising charge rates, we expect to see 450 to 500 average daily throughput by 2029. This higher throughput per stall combined with many more stalls deployed is what has been and will continue to drive growth in revenues. Not only have we been delivering some of the best performing usage across the industry, we're focused on ensuring our chargers perform to their maximum potential and can maintain increasing utilization rates. Today, nearly all stalls deployed are 350 kilowatt chargers, which delivered almost 60% of our throughput in the quarter. These chargers are the most representative of our expected future network, since we estimate well over 90% of our throughput in 2029 will come from these chargers. Utilization on the EVGO network has surpassed others in the industry, our expectations and the expectations of the equipment providers. This high usage placed stress on our Cignet chargers, which were the first 350-kilowatt chargers we deployed. After performing root cause analysis in conjunction with Cignet in 2024, we embarked on a number of tech enhancements, and a year later, Cignet chargers are performing very strongly with usage already close to our long-term target in 2029. We are now at a similar junction with our Delta chargers, which have comprised almost all new bills since 2024. EVO is embarking on the same kind of tech enhancements we did with Cignet, and we're confident we will see the same strong performance step up as we've seen with the Cignets. As an industry leader, we are focused on ensuring we have the best quality hardware through ongoing maintenance, periodic enhancement of specific components, and our next generation charging stations, which we are actively developing at our innovation lab in El Segundo. Our new generation of charging architecture is being designed not only for a better experience and lower cost, but also being developed and qualified for these higher levels of utilization from the start. This project is being led by the EVGO team and features a robust design for reliability methodology, including best-in-class hardware design and software, taking into account our learnings from our 15 years of experience in EV charging and over 1.6 million customer accounts, all of which sets us apart from the rest of the industry. The next generation of charging architecture is expected to lower our gross CapEx per stall by over 25% in 2029 versus 2023, delivering even stronger returns on capital deployed. In the meantime, we've been driving down both gross and net CapEx per stall over the last three years. In 2025, vintage gross CapEx per stall is expected to be 17% lower than 2023, driven by savings from lower contractor pricing, material sourcing, and increased use of prefabricated skids. When you include capital offsets, our capex per stall is expected to be reduced by 40%, resulting in vintage net capex per stall of $75,000. 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 despite the fact that federal incentives for EV charging will sunset in the summer of 2026, state grants and utility incentives are alive and well. As we said last quarter, in order to capture some of these state grants, a certain number of stalls that were due to be operationalized in the second half of the year have shifted out by a few weeks, lowering the total number of stalls that we expect to deploy in calendar 2025. Our long-term expectation is to continue lowering gross capex per store as a result of our next generation architecture. But we conservatively assume we do not have the same level of offsets as we've seen in the past couple of years. Let's now briefly turn to progress on our four key priorities. Delivering a best-in-class customer experience, operating in capex efficiencies, capturing and retaining high value customers, and securing additional complementary non-dilutive financing to accelerate growth. As we discussed earlier, our next generation charging architecture will take our customer experience to the next level. We've completed the enhancement of a number of components in our Cignet 350 kilowatt chargers and are now embarking on a similar campaign for our Delta 350 kilowatt chargers. In terms of efficiencies, while the next generation charging architecture is expected to deliver capex efficiencies by 2027, we're making great progress in the near term too, lowering 2025 vintage net capex by 27% versus our plan for the year. And we continue to see a reduction in G&A as a percent of revenue for 2025 versus prior years. The EVgo app has now reached an overall rating of 4.5 on the Apple App Store, which is a key threshold above which we would expect to see accelerated organic customer acquisition. And we're thrilled with reaching this milestone. Our NACS pilot has continued to expand from two sites last quarter to almost 100 stalls as of the end of October. And this pilot would continue to test our ability to attract native NACS vehicles to our network. And we remain encouraged by the higher number of Tesla drivers at these stalls than they had prior to installing the NACS cables. This is a key part of our iterative learning process before a much wider scale rollout plan for 2026. And on financing, we've made excellent progress this year. Between continued advances under the DOE loan, closing the sale of our 2024 vintage 30 C portfolio. And of course the transformational first of its kind commercial financing facility. As we noted earlier, we expect 40% capital offsets for the 2025 vintage CapEx. We have the financing in place to increase our annual store build to up to 5,000 stalls a year by 2029, without the need for any new equity capital. Now, Paul will share more detail on our third quarter results.