ChargePoint Holdings, Inc.

Good afternoon, ladies and gentlemen. At this time, I would like to welcome everyone to the ChargePoint fourth quarter fiscal 2024 earnings conference call and webcast. I would now like to turn the call over to Mr. Patrick Hamer, ChargePoint's vice president of capital markets and investor relations. Patrick, please go ahead.

Good afternoon. Thank you for joining us on today's conference call to discuss ChargePoint's fourth quarter and full fiscal 2024 earnings results. This call is being webcast and can be accessed on the Investors section of our website at investors.chargepoint.com. With me on today's call are Rick Wilmer, our President and Chief Executive Officer, and Monty Katani, our Interim Chief Financial Officer. This afternoon, we issued a press release announcing results for the quarter ended January 31, 2024, which can also be found on the Investors section of our website. We'd like to remind you that during the conference call, management will be making forward looking statements. These forward looking statements involve risks and uncertainties, many of which are beyond our control and could cause actual results to differ materially from our expectations. These forward looking statements apply as of today, and we undertake no obligation to update these statements after the call. For a more detailed description of certain factors that could cause actual results to differ, please refer to our Form 10-Q filed with the SEC on December 8, 2023, and our earnings release, which was posted today on our website and was filed today with the SEC on Form 8-K. Also, please note that we use certain non-GAAP financial measures on this call, which we reconcile to GAAP in our earnings release and for certain financial periods in the investor presentation post on the investor section of our website. And finally, We will be posting the transcript of this call to our investor relations website within the quarterly results section. With that, it's my pleasure to introduce our president and CEO, Rick Wilmer.

Thank you all for joining us. In today's call, we will review our financial results for Q4 of fiscal 2024 and the corresponding annual results. After giving an overview of Q4, we will outline ChargePoint's strategy moving forward as promised during the Q3 earnings call. Later in the call, our interim CFO, Mansi Kitani, will outline how we plan to achieve our commitment to being adjusted EBITDA positive in the fourth quarter of this year, and she will also provide top line guidance for Q1 of fiscal 2025. I will begin by reviewing the results for Q4 fiscal 2024, as well as a few highlights of the quarter. Critically, our inputs to the business are beginning to make a difference. as evidenced by the operational efficiencies and cash management improvements I will outline shortly. Our revenue for the quarter increased sequentially to $116 million in Q4. The quarter also saw improvements to the underpinnings of the business. These include our non-GAAP gross margin increasing to 22%, a decrease in operating expenses to $75 million, or 65% of our revenue, and a significant reduction in our cash usage. Also of note was our subscription revenue, which was up 30% year-over-year. This is particularly exciting because it represents our highest margin revenue strength. For the full fiscal year 2024, revenue was $507 million. Our CFO, Monty Kitani, will give an annual review in her portion of the call. In Q4, we had quite a few highlights. As the industry moves towards the NACS connector in North America, ChargePoint lived up to our promise of being first to market and ready for the transition. In Q4, NACS connectors rolled out across both our residential and commercial product lines, and the first NACS cable installations at DC Public Fast Chargers went into operation. This represents the first time Tesla vehicles have been able to fast charge outside of their own ecosystem without a costly adapter. With additional NAX cables being installed regularly, we are well ahead of the transition. We kicked off the quarter with the launch of the Mercedes-Benz HPC charging network in North America. The network represents the pinnacle of our full-stack offerings. Mercedes drivers can reserve a charging session, seamlessly authenticate, charge, and pay with plug-in charge convenience on a new network. These features are enabled by ChargePoint for the MercedesMe InDash experience and mobile app. At the end of the year, we expanded our relationship with Verizon Communications. ChargePoint will now begin deploying fleet charging solutions at Verizon service areas. These locations will support the Verizon fleet operations. In January, we received our FedRAMP authority to operate, whereby ChargePoint became the only end-to-end EV charging provider to receive this authorization from the United States federal government. So, what exactly does this mean? ChargePoint is now able to pursue tens of millions of dollars in available government contracts, and all our cloud software products are live for selection on the FedRAMP marketplace. Also in Q4, we expanded upon our existing relationship with WEX, a leading payments and software provider to businesses representing more than 19 million commercial vehicles serviced globally. WEX's U.S. customers and their drivers are now able to use WEX's mobile app, DriverDash, to find, use, and pay for charging within the ChargePoint network. DriverDash enables fleet operators to gain enhanced insight and metrics into driver performance, including preferred pricing, proactive monitoring, and reporting through a single integrated payment platform. For our business, this solution represents an exciting new application of an existing product and an additional revenue stream to pursue in the realm of fleet. We are actively working with WEX on additional applications for our existing products. Sales volume of our home charging station, the ChargePoint Home Flex, was up 37% year-over-year and set another annual sales record. This was highlighted by record home charger sales in Q3 and in Q4. Our NAFSA offerings for Home Flex have become approximately 10% of the total orders on the ChargePoint e-commerce store, showing that Tesla drivers are also choosing ChargePoint for their home charging needs. HomeFlex installations are a critical entry point into the ChargePoint ecosystem, so we are encouraged by the excellent sales volume the product has seen lately. We expect these sales to reign strong in fiscal year 25. As I mentioned in our last earnings call, network reliability is critical. There's a barrier to EV adoption, and we have dedicated considerable resources to improving charger uptime. When we launched the Network Operations Center in August of last year, the ChargePoint network was measured at 96% uptime. Since then, we have made improvements to the functionality of the operation center itself, as well as remedied many of the issues it has identified. I am pleased to report that as of January 31st, we are at 99.6% uptime based on what we currently measure. As a reminder, ChargePoint defines uptime as the percentage of ports capable of dispensing energy at any given moment. But uptime metrics mean nothing if any driver pulls up to a charge point station and walks away without a successful charging session. So we aren't stopping there. We are continuing to expand the remote diagnosis and predictive analytics capabilities of our network operations center, and incremental measurements will be added this year. To be transparent about where we fell short of our expectations in Q4, we had a sluggish quarter in the EU. This was a result of lower hardware sales to commercial customers, but the European software business remained steady. In North America, sales to U.S. automotive dealerships remained at a somewhat slow pace of Q3. Here are the latest non-financial statistics of note. We count 74% of the Fortune 50 and 60% of the Fortune 500 as customers. We finished the quarter with more than 286,000 global active ports under management on the ChargePoint network, of which approximately 24,000 are DC fast chargers. We provided drivers with access to more than 631,000 roaming ports worldwide for a total of more than 917,000 places to charge. Of particular note, in Q4, we hit a milestone of 100,000 active ports under management in Europe. which is another nod to our growth in subscription revenue. Q4 also saw considerable growth in the e-mobility metrics ChargePoint tracks. We estimate we now have enabled more than 9 billion electric miles driven. That would mean over 1.9 million metric tons of greenhouse gas emissions have been inverted by EVs on our network. In summary, ChargePoint made incremental progress in the fourth quarter. We have a revised strategy for the road ahead, and we remain committed to the goal of becoming profitable on an adjusted EBITDA basis in the fourth quarter of this year. To give market context for the strategy we will be outlining shortly, I'd like to report what we see in terms of EV adoption. Based on the latest sales reports, EV growth continues at a double-digit pace, but not at the aggressive rate OEMs had expected. Looking at the year ahead, Bloomberg NEF estimates passenger EV sales will grow at 32% year-over-year in North America and 10% year-over-year in Europe. There is expected dependable charger access for these vehicles, and ChargePoint remains a leading infrastructure solution. We outline vehicle data because EV sales are a leading indicator for us. To directly address the EV charging industry, we are seeing a few trends. First, we are seeing disaggregation between hardware and software purchases, particularly amongst larger customers that prefer a multiple sourcing model. This represents an opportunity for us with software, which I will discuss later in the call. The second trend is the commercial hesitation brought on by the noise surrounding the EV segment lately. Institutions want and need EV charging, but are hesitant to commit at a time when the news is questioning EV adoption. They are still buying, but not as freely or quickly as they were last year. The third trend is in the consumer market, where patterns contradict that of commercial. Home charger sales are up considerably, a knock-on effect of new EV sales. This tells us that despite the noise, EV adoption is continuing. Chargepoint utilization data backs this up. Regardless of sector, one thing is clear based on our network utilization data. Pressure for more charging infrastructure continues to build. Last year, the ChargePoint network dispensed over one terawatt of energy, which is an increase of more than 70% year over year. While active port count continued to grow, utilization drastically outpaced it with charging sessions increasing 53% for the year. This data makes it clear that charging infrastructure must scale up faster to keep up with demand and soon. As a result of these trends, we are evolving our strategy to meet the current needs of the market. Here are the four cornerstones of our strategy moving forward. Our first cornerstone is operational excellence. In our Q3 earnings call, we emphasized the importance of operational rigor with laser focus on execution. The better we execute, the better our results. Scale, efficiency, speed, and managing cash all represent priorities. While we are confident in our strategy, it is nothing without a continual focus on operational excellence and execution. This will remain a core focus. We are making progress, but not yet where we want to be. To demonstrate measurable progress, here are two recent actions that had a major operational impact on our business. In January, we took the tough decision to reduce our global workforce by approximately 12%. This represented a reduction of approximately $33 million in annual non-GAAP operating expenses and was concentrated in hardware engineering for reasons beyond simply cutting our OPEX. To explain why the reductions were focused on hardware, in February we announced a new approach to hardware development. We now have an agreement with a leading power supply manufacturer, ACBEL, to jointly develop future hardware. Under the agreement, ACBO and ChargePoint will co-design for our portfolio, and ACBO will then manufacture that hardware for ChargePoint. This represents an extension of our existing agreement, and the arrangement enables us to bring new hardware to market faster because the development of the hardware is integrated with the manufacturing. We will also have more engineers than ever working on ChargePoint hardware. We expect to do this at lower cost, all while improving our benchmark quality standards. To summarize my comments on this operational cornerstone, in the last six months, we have taken nearly 70 million in annual non-GAAP OpEx out of the business when compared to our OpEx high point in Q2 of last year. In the process, through partnerships, we have increased our hardware engineering bandwidth, and we are improving our speed to market. There are many further initiatives planned, but we wanted to relay the demonstrable progress to our shareholders today. We are confident we are on the right track. The second cornerstone is delivering world-class driver experiences. We now serve more than a million quarterly active EV drivers representing one of the largest charging platforms in the world. To attract and scale this driver base, we need to deliver outstanding experiences at every step of the driver journey. for any type of EV in North America or Europe. At home or on the road, while the driver eats, sleeps, works, or plays, ChargePoint is committed to providing a driver experience that is intuitive and reliable. Our drivers are key to our success. and whether they plug into one of the 286,000 active ports on the ChargePoint network or tap into the over 631,000 more ports with one of our roaming partners, we must make it easy to charge. We not only need to deliver a great experience, but also surprise and delight our drivers with new, even more useful features. We will continue to execute a roadmap for this, and we will report progress as we go. The third cornerstone of our strategy is to double down on the development of our software platform. Historically, we have focused on selling full-stack hardware and software solutions. Our future will include a significant focus on software solutions for all EV charging use cases. Our software margins are considerably better than they are for hardware, and the revenues are recurring. This pivot comes at a good time as we're seeing the disaggregation trend I mentioned earlier. For those needing a comprehensive charging solution, we remain a formidable one-stop shop with class-leading hardware, but we will not exclude those who already have hardware and seek a leading software platform to manage it. We will also continue to build out our in-dash integrations for auto OEMs and payment providers. which improves both the driver experience and our own margins. ChargePoint is reinforcing our software platform to empower our customers. We will continue to share more details about our software offerings, demonstrating their value to the business and our margins. For now, we would like to give an overview of what our platform can do. It already enables charging station owners to manage costs, optimize fleet operations, integrate loyalty programs, manage payments, and more. It powers our seamless integrations with customer workflows, EV and EVSE manufacturers, fuel and fleet cards, payment processors, utilities, and other energy services. The software platform powers ChargePoint's networked charging stations, thoughtfully designed for usability and uptime. Third-party charging stations and e-mobility service providers can also run on ChargePoint's platform, uniquely enabling these service providers to deliver their own charging solutions to the market faster. ChargePoint empowers our customers and ecosystem partners to connect with EV drivers when they want to charge, providing a valuable benefit, increasing brand loyalty and engagement, and unlocking powerful tools to generate revenue or optimize fleet operations. Now and in the future, we aim for this platform to be the enabler of any institution's EV charging needs, fostering the realization of their own goals. The final cornerstone is our hardware strategy. As evidenced by the aforementioned ACBEL partnership, we have big plans for hardware. Our software has a strong focus under this plan. It will continue to compete in the hardware space. We will develop new hardware for as long as the industry requires innovation because better software runs better on better hardware. Across the board, EV chargers are still too expensive and have room for improvement in areas such as reliability and durability. Support for the future of green energy meaning compatibility with vehicle to home, grid, and other connected energy points, is the future of charging hardware. The Acrobat partnership enables us to bring these technologies to market faster and in more configurations. We will also continue to focus on developing innovative hardware for home charging, fulfilling our commitment to those great driver experiences which are critical to our success. In conclusion, we are making ChargePoint fast, lean, and efficient, all with the goal of returning higher margins. Moving forward, our strategy of enhancing the experience for our drivers will ultimately maximize the results for our shareholders. We intend for ChargePoint to be the enabler of the transition to e-mobility. Thank you for listening, and I will now hand the call over to our CFO, Mansi Kitani, to review the financials.