Volta, Inc. Class A

Welcome to the Volta, Inc. 3rd Quarter 2022 Earnings Call. At this time, all participants will be in a listen-only mode. Later, we will conduct a question-and-answer session. I will now turn the call over to your host, Drew Lipscher, Chief Development Officer. Mr. Lipscher, you may begin.

Good afternoon, and thank you for joining us on today's conference call to discuss Volta's 3rd Quarter financial results. This call is being broadcast over the web and can be accessed on the Investors section of our website at investors.voltacharging.com. With me from Volta on today's call are Vince Kovic, Interim CEO, Brad Hastings, Chief Commercial Officer, and Stephen Palofsky, Chief Accounting Officer. We would like to remind you that during this conference call, management will be making forward-looking statements. including statements regarding our expectations related to financial conditions, outlook for the sector and company, and our expected investment and growth initiatives. Please note these forward-looking statements are based on current expectations and assumptions, which are subject to risks and uncertainties. These statements reflect the company's views only as of today, should not be relied upon as representative of the views as of any subsequent date, or publicly release the results of any revision to these forward-looking statements considering new information or future events. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For further discussion of the material risks and other important factors that could affect our financial results, Please refer to the company's filings with the SEC, including its annual report on Form 10-K for the year ended December 31st, 2021, and its subsequent quarterly reports on Form 10-Q. In addition, during today's call, the company will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of voltage performance. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. You will find additional disclosures regarding the non-GAAP financial measures discussed on today's call in Volta's press release issued this afternoon and its filings with the SEC, each of which is posted on Volta's website. With that, I will turn the call over to Vince Kovach, Volta's intern CEO. Thank you, Drew, and hello, everyone. Thank you for joining us today to review our company's third quarter results. Volta has completed four quarters as a public company and over this period has evolved tremendously. Volta was certainly one of the first companies to understand that to sustainably pursue the enormous opportunity of public EV charging, one would have to solve the issue of how to generate revenue before there was widespread adoption of electric vehicles. Our founder and talented employees solved this problem by creating Volta's proprietary and beautifully designed dual median public EV charging stations along with a robust portfolio of intellectual property rights that set Volta in a class by itself. Today, Volta has over 3,000 chargers in 31 states and has been recognized as having the country's most innovative public charging strategy, generating revenue and economic benefits far beyond just the intermittent sale of electrons to the early adopting EV driving communities. An understandable desire to build out a national charging network all at once and to do it on our own led our prior management into a high-cost structure that was out of step with Volta's limited capital and unnecessary given the ability to leverage other public and private resources. In a significant course correction that is well underway, Volta is taking the necessary steps to reduce our cost structure, improve our operations, professionalize our organization, and bring our headcount back to rational levels. Specifically, in the last few months, we realigned our organization to become more efficient, which enabled us to reduce our U.S. workforce by 54%. This change alone resulted in a 33% reduction in our cash labor expense. We didn't just make the workforce smaller. We managed to make it better by significantly upgrading our talent in a number of key areas. For instance, our new finance and accounting team has reworked their department to significantly reduce the use of expensive outside consultants and contract employees by simultaneously addressing the four financial control material weaknesses and related control deficiencies that were identified in our prior management. Our team's work not only improved processes, procedures, and systems across the company, but also eliminated approximately $15 million in annual unnecessary spending from the department. These are just a few examples of the changes in the cost side of our business. The financial benefits of these changes are ahead of us, as the structural costs we were saddled with are unwound and the efforts across the company to do more with less are implemented. As of today, We expect that the cost reduction measures implemented have already reduced run rate cash expenses by over $35 million per year on an annualized basis. Management is continuing to aggressively implement additional cost reduction measures across all aspects of the business, which are not currently reflected in these numbers. And while these and future plans cost savings initiatives are certainly meaningful, We do not expect or believe them to impede our progress on improving our core business or accomplishing our internal and external priorities. A good example of this resilience is our revenue this quarter. Despite the challenging macro environment and reductions in workforce, Volta was still able to grow its overall revenue to $14.4 million, a 69% increase year over year, and achieve record media revenue of $12.2 million, This is a direct result of our media network's front of store effectiveness, our exceptional direct and programmatic media sales team, our upgraded internal marketing team, and most importantly, the support of our valued national advertisers. This quarter, we also continued our industry-leading pace of installing new charging stations, adding 56 new sites in the quarter, bringing our total sites to 983 in 31 states. and installing an additional 173 charging stalls, ending the quarter with an installed base of 3,093 stalls. That's up 45% year over year. While our pace of installation is still one of the best in the industry, this quarter saw fewer total stalls installed due to management's decision to preserve our very limited capital during our ongoing capital raising process. In response to current market conditions, and in part due to the attractive investment tax credits which become available at the beginning of next year under the inflation reduction. One impact of that decision is a reduction in network development activity and corresponding revenue in the quarter. Network development revenue for Q3 was $1.9 million versus $3.6 million in the prior quarter, which offset the increase in record media revenue in Q3. Given the difficult capital constraints that we face, Volta will continue to slow its installation cadence until capital, including the focus of the funds through the myriad of federal programs previously announced, is more readily available. In the meantime, Volta will continue to support its media business and serve our excellent brand partners who value our unique offer. Going forward, Volta is initiating discussions with our site partners to develop ways to accelerate network development One example of these discussions is prioritizing a site partner's installations where they are willing to complete the permitting, engineering, and site prep work necessary in advance, essentially make ready, taking Volta out of the construction process and speeding installation. We are also realigned and significantly expanded our policy team to better focus on identifying and pursuing public-private partnerships that align with the $7.5 billion in public grants the federal government has allocated toward public EV charging infrastructure build-out under the bipartisan infrastructure law. Volta isn't just asking for money and applying for NEVI and committee grants, however. Like we did with the city of Hoboken, we have a much higher value-add approach, offering to work with local, state, and federal governments and NGOs to plan and optimize their public projects using our proprietary planning tool, PredictDB. Our AI-driven PredictDB planning tool can ensure that all drivers in all communities have access to convenient and safe public charging, something that is core to our Charging for All initiative. And our media model provides an added advantage to communities by serving as a public communications platform for delivering essential messaging like emergency alerts, weather alerts, and information about community events. Volta currently has approximately 4,000 science stalls that we believe may align with the objectives of these many, many government programs. In short, we believe that Volta has the absolute right solution at the absolute right moment in time for this inevitable transition and evolution. We're not just a network of chargers. We're a powerful dual energy and media network delivering charging for all. We connect drivers to clean, safe, and accessible charging, brands to customers, and partners to opportunity. We remain as excited as ever about the opportunity in front of us and the prospects for Volta's business and are working nonstop to address our near-term challenges. With that, I'll hand it to Brant to review our commercial operations. Thanks, Vince. Volta's commercial organization made tremendous progress in the third quarter. as demonstrated by the 69% year-over-year revenue growth that Vince just shared. One example, which you may have seen, is AdExchanger recently named Volta the best commerce media technology for our 2021 holiday campaign with Coca-Cola, demonstrating the power of Volta Media Network to drive measurable sales results for leading brands. And we continue to invest in our digital media capabilities including launching 3D creative support and they're receiving recognition for using our nationwide media network to educate drivers on the benefits of electric vehicles and reminding voters to cast their ballot in the midterm elections. On the government and policy front, Volta recently highlighted the power of our media model to fund critical EV charging in disadvantaged communities with our collaboration with Tucson Electric Power, which will bring eight EV chargers to communities in Tucson, Arizona, with a high percentage of renters. And we're sharing this differentiated message with key audiences, including the recent National Governors Association Conference, where Vince took the stage to explain the benefits of Volta's model for cities and communities. And I'm excited to provide several additional updates with you all today And before I go any further, I'd like to address how we're thinking about Volta's revenue in the context of the market conditions many other advertising-powered businesses have discussed on recent earnings calls. The World Federation of Advertisers and media analyst firm Ubiquity recently surveyed marketers from the largest multinational brands to understand how current economic conditions are of these companies are actively scrutinizing marketing spend, and advertising leaders must justify every investment. And under conditions like these, marketers prioritize digital media investments that deliver measurable business results. The Volta Media Network sits squarely at the intersection of where budgets are being reallocated, setting us up better than most to protect against economic uncertainty. Volta constructs its dual EV charging and media screens in prime locations, steps away from popular grocery, shopping, and entertainment venues. By being immediately beside the front doors of those locations, our media network delivers the last message a shopper sees on their way to grab a cart, providing advertisers a critical opportunity to directly influence the items that end up on that shopper's list. Involta's suite of sophisticated measurement tools allows us to clearly demonstrate the revenue-generating power of these desirable locations. McKinsey estimates commerce media, otherwise known as retail media, this new category of advertising that closes the loop between media impressions and commerce transactions, could represent as much as $100 billion in ad spending by 2026. The Volta team, however, is wasting no time in capturing growing retail media budgets today by proving the sales driving potential of our media network, which we've highlighted in previous quarters. Finally, we are currently in the middle of the Q4 holiday advertising season. Regardless of the state of the economy, this is a critical time for brands to promote their products and services. Volta is winning holiday campaigns with brand name advertisers like Coca-Cola, seeking to preserve and grow market share as consumers consider trading down for more affordable options. The placement of our media network outside of grocery stores and pharmacies also allows Volta to win campaigns for these retailers' private label brands. Nature's Promise, which is owned by Ahold Delhaize USA, is one such example. As shoppers look to make their dollars go even further this holiday season, these more affordable store brands are attracted to Volta's media network as the optimal canvas to promote their cost savings potential. While Volta's media network is set up better than most to protect against economic uncertainty, our business is not immune to macroeconomic forces. One such factor is the automotive industry's ongoing supply chain constraints. Without available inventory, many auto manufacturers are postponing vehicle launch campaigns, which often account for the largest advertising budgets. Despite this and other market forces, Volta's media network is yielding positive results. In the third quarter, our media revenue grew 66% year over year and became further diversified across consumer packaged goods brands running retail media campaigns entertainment clients, and financial services brands. Exemplary of this strategy is the fact that our consumer packaged goods, or CPG, business grew 135% year over year. We welcomed many notable first-time advertisers in the third quarter, including Google, Neiman Marcus, Fiji Water, Peacock, and Capital One. 79% of Q3 media revenue was from repeat customers, including Jeep, Target, Disney, Bank of America, and Coca-Cola, demonstrating the ongoing value our media platform delivers to leading brands. Now I'd like to move on to our charging solutions business and reemphasize what Vince discussed regarding Volta's focus on capturing federal grants. The Biden-Harris administration has made installing EV charging infrastructure along highways and within cities priority of the bipartisan infrastructure law in Inflation Reduction Act. And under this legislation, the equal distribution of critical charging infrastructure across all communities is of the utmost importance. And to that end, the federal government has announced its Justice 40 goal, which seeks to ensure that 40% of the overall benefits of these bills flow to disadvantaged communities. BOLTA's media-powered model generates revenue regardless of how many EVs are charged, allowing us to construct chargers in disadvantaged communities where EV ownership may be lagging in making Volta particularly competitive for these federal grants. Volta's dedicated charging solutions team continues to use our award-winning PredictEV infrastructure planning software to evaluate which of the nearly 8,000 EV stalls in our sign construction and technical evaluation pipeline best satisfy the government's requirements. By analyzing multiple data sources, including local economic and equity data, aligned with the administration's Justice for the Initiative, PredictEV can identify locations that will simultaneously be competitive for community government grants and valuable for Volta's media business. This analytical review of our installation pipeline will allow Volta to continue expanding our network in the most capital effective manner possible in the years ahead. In closing, I want to reiterate the measurable value Volta's model brings to all of our stakeholders, drivers, advertisers, commercial properties, retailers, and municipalities. While we continue to monitor macroeconomic conditions, including the impact on advertising spending by marketers, we believe Volta is set up better than most. The prominent placement of Volta's charging stations and media screens near the front doors of businesses and our roster of digital native media capabilities enable Volta to continue attracting new customers and commanding larger digital advertising budgets. With that, I'd like to thank told his chief accounting officer to comment on our Q3 financial results. Thanks, Brent. Turning to our Q3 financial results, for the third quarter, Q3 revenue grew 69% year-over-year to $14.4 million. Q3 media revenue grew 9% sequentially and 66% year-over-year to $12.2 million. We ended the quarter with an installed base of 983 sites adding 56 new sites in the quarter. Volta's installed base of stalls was 3,093 on September 30, 2022, up 6% quarter over quarter and 45% year over year. The company installed an incremental 173 stalls during Q3. For the third quarter, we exited the quarter with 1,378 sites and 3,930 stalls in our signed construction pipeline. Our gross margin excluding station depreciation for the quarter was 34% as compared to 32.5% gross margin in Q3 of 2021. We continue to forecast a 25 to 30% gross margin for the full year. Including stock-based compensation and one-time expenses, SG&A was $40.0 million for the third quarter, compared to $55.7 million in the prior year period. We have made significant improvements to our SG&A levels and continue to work to reduce our recurring spend.

Adjusted EBITDA was $30.9 million loss for the third quarter of 2022, as compared to a $22.1 million loss in the third quarter of 2021. Net loss was 42.5 million for the third quarter compared to a net loss of 69.7 million in the prior year period.

The company had a cash and marketable securities balance of 15.6 million as of September 30th, 2022. Our anticipation for the full year 2022 CapEx is dependent on the company's ability to raise capital.

Our weighted average shares outstanding for the third quarter were approximately 169 million. And with that, we would like to open the line for Q&A.

Thank you. If you would like to ask a question, please press star 1 on your telephone keypad now. You will be placed into the queue in the order received. Please be prepared to ask your question when prompted. Once again, if you have a question, please press star 1 on your phone now. Our first question today comes from Matt Somerville from DA Davidson.

Thanks. Good evening. A couple of questions. A couple of things we didn't hear about tonight. I'd love to get an update on where you're at with rolling out charge for charge. I guess if I remember back to prior calls, the thought was, you're going to go through kind of a pilot process maybe in the first half of the year and come into the second half of the year ready to talk about sort of the game plan for that revenue stream. And I guess in that regard, it sort of struck me a little bit that your charging network operations revenue was essentially negligible in the quarter. So maybe start there, and then I have a follow-up.

Hey, thanks for the question. Garrett, do you want to cover that?

Yeah, great. Great question, Matt. So at a high level, charge for charge on our DC network was deployed in Q2 and towards Q3. And as a result, 80% of our DC network currently does charge for charge. That probably explains why the increase you see is so small. In addition, on the financial statement line within charging operations, we do have our LC on our charge-for-charge, the TC network, and continue to track the utilization and look forward to presenting metrics as we grow that segment of the business. And then, again, something that wasn't mentioned, what's sort of the update on on Europe. We haven't heard much about that. What's the status of the business there? What are you doing headcount-wise? Are you still investing there? Are you pulling back? Just maybe dig in a little more detail where you're at in Europe, where your site count install base, whatever metrics you can kind of talk about and what you're doing strategically right there as we sit here today. Thank you.

Hey, maybe I'll take a shot at that. Europe's a very interesting market, and I think most everyone knows that we've deployed a team and we've We've kind of started the process there that we're well up the curve on in the U.S. The reception in Europe is very good. Volta is looked at just as attractively as it is here. We have a very good team on the ground. They are busy lining up potential counterparties, which we refer to as site partners, and have been very successful in generating interest and kind of early stage indications. From an overall strategic perspective, we have not yet initiated a significant build-out in Europe, in part because of capital availability and in part because of a strong desire to have the business systems and organizational infrastructure well in place ahead of launching into an aggressive CapEx program. We expect to look at part of our year in planning. We're evaluating kind of every aspect of it. We like it.

It's quite interesting, but we should be able to update you in the future on it. Great. Thank you, guys.

And our next question will come from Mark Delaney with Goldman Sachs.

Yes, good afternoon. Thank you very much for taking the questions. The first was on potential capital raising. Could you please clarify if you've done any since the end of the counter third quarter at U.S. Sony capital raising that's potentially been done quarter to date and maybe talk a little bit around what potential options there might be for the company to raise capital and how much you think you may need to raise?

Mark, next question.

Drew has been coordinating all of the efforts in that entire area. Drew, do you want to take that? Sure. Thanks, Mark. As you know and as I think everyone knows, the capital markets and the market macroeconomic conditions have been challenging over the last couple of months. We continue to have active discussions with a number of parties about providing Volta with the appropriate both quantum and structure of financing to help drive our business forward and continue to fund growth. You know, we will be providing you with an update as soon as we know something. I think as we become fond of saying you'll be the second person to know, we will be the first. But we continue to be encouraged by the conversations that we're having and look forward to talking about that more shortly.

Okay, understood. And then you outlined on the call today a number of cost reduction steps the company has taken. Maybe you could clarify... what that means in terms of your current cash usage rate, either per month or per quarter? Where does it currently stand?

Hey, Mark, we're not giving the granularity to cash usage on a monthly basis. What I would tell you is we're treating it as a precious commodity. We are managing the business on both a cash basis and a capex basis very carefully. We are in an interesting position because there are many different who very much want to see us succeed. And there are people in our organization, in our site partner network, kind of across the business that are collaborating with us to think about how we can expand our network in a more capital-friendly way, less capital-intensive way. I think that what I would tell you is the process is still underway. It's very much linked to our capital-raising process. And as Drew said, well, we'll update the market as soon as all of that's completed.

One last one from me, if I could, please. Predict EV was mentioned today, and also I think on your last audience call, it was one of the new focal areas and potential revenue-generating opportunity. Any more examples you can give us on the success you're having with that and what it may mean for the company going forward? Thank you.

Yeah, sure. Predict EV is a very interesting part of the business. It's the precursor to a network build-out, particularly when other people are allocating capital. If a site partner is trying to get us to put charges in front of their store, it's a very one-to-one relationship. If a government agency is trying to figure out how to allocate $7.5 billion across 70 different kind of big cities, 50 states, a lot of different jurisdictions, it's a much more difficult task. We have been extremely active on that front, and we have been leading those conversations with the suggestion and the tool to go with it to properly plan for the capital allocation and the build-out using something more than a marketing material of a market participant. Our Predict TV software is agnostic, whether it's our equipment that goes in the ground or someone else's. It's using AI and machine learning technology informs a policymaker or a city leader where the charger should go. And then what's really tremendously to our benefit is that once those sites have been identified, we can least squares our map on top of it and show a policymaker exactly where we already have sites in our MSA contracted backlog. That's a key differentiating factor of us versus all the other chargers who are competing for this money because the people who are kind of organizing their business to go after the money haven't built the backlog of sites that Volta has. It's one of the things Volta did very right very early is instead of going after parking lot by parking lot, the business was organized around going after whole portfolios properties through national property owners and REITs and contracting those over long-term contracts under MSAs. So when we sit down with a policymaker, we have the tool to tell them where it should go, and then we have the inventory of sites where they can go and their capital can enable it. And I guess the other piece that you didn't ask about on PredictPB is the charger itself has an economic benefit far beyond just charging an EV card. which is the other part of the BOLTIS story, which is why it's so compelling.

Yeah, but I think just anecdotally, Mark, the only thing I would add to that understand infrastructure deployment, I think, resonated very strongly, and Hoboken, again, remains an example of that. Thanks, Mark.

You can tell how much we like this part of the business because we can't stop talking about it. The other part about Predict TV that's interesting is that the money that's coming from the federal government to the states has a process associated with plans and approval of plans and then allocation of capital by market participants and reimbursement of capital, all of that's a ways off. One of the interesting parts about Predict TV is that it is eligible for the planning money and the planning money can be allocated by the states and by the local governments on an expedited basis. So we stand in a position where it's a focus of a lot of our conversations right now where those jurisdictions can can hire us to use PredictDV today on a fee-for-service basis and to help them make the plan to allocate the capital that's months and quarters off.

So it's an early tool as well as a very powerful tool. Thank you.

And our next question will come from Andres Shepherd with Cantor Fitzgerald.

Hello, everyone. Good afternoon. Thanks for taking our question, and congrats on another quarter. I wanted to maybe follow up on Mark's question in regards to the capital raising needs, right? So in the past, you had mentioned the need to raise that $250 to $300 million of non-dilutive capital. Now, I know you did the $150 million of shares via the ATM previously but you know at these levels it might not be the best idea to issue additional shares and so you know as we stand now with you know about 16 million in cash as of the end of the quarter is the expectation is the expectation to raise capital in q4 and in that range and ideally non dilutive thanks thanks Andres appreciate the question So I think just a quick comment on the ATM programs.

I think it's not just Volta. I think you've seen a number of companies in our industry and in general industries, particularly D-SPAC companies, announce ATM programs over the last four to six months. It's good housekeeping. It's something that's there. It's an insurance policy of sorts on an as-needed basis. So we view the ACM program really as sort of a good housekeeping procedure more than I think where you were headed was as a solution or a full solution to the capital needs going forward. With regard to capital required to continue to fund our business and grow our business, Look, we are in the market talking to a number of different investors. As you can probably imagine, every investor has his or her own opinion about structure and the nature of dilution or lack thereof in any capital structure. We are listening and talking actively to all interested parties. We are open to all structures that make sense. The primary goal of Volta is to raise the money necessary to continue to deploy our chargers and continue to build out our programs that Vince and Grant alluded to in their remarks.

So, you know, we hope that it's, you know, again, we hope that it's something in the near term that we can come back to you guys and tell you more about.

Okay. Thanks, Drew. Fair enough. And maybe as a quick follow-up, just help me understand a little bit better. So on slide six, you have your deployment pipeline and also your technical evaluation. I guess just, sorry if this is silly, but just help me understand in terms of the pipeline, what time period is that encompassing? In other words, when do you foresee deploying the chargers that are in the pipeline and converting them into actually installed?

Thanks. Great question, and maybe I'll answer your question with a question, Andres. Do you know anyone at utilities who can get them to move faster?

We can take that conversation offline, but I'll see what I can do.

We greatly appreciate the help on that side. Look, it's a great question. Just to maybe level set from a definitional perspective, because we do talk about three terms on slide six. We talk about our installed base, which is obviously the network of chargers that we have in the ground that are operational. We talk about the deployment pipeline. Those are the number of stalls that are in what we call the construction phase or the development phase. So we've chosen the locations, the site order agreements are signed. We're in somewhere between permanent engineering and commissioning of those stations. And then the technical evaluation stalls, those are a little bit higher up in the pipeline. They are all signed under or pursuant to an MSA agreement. But we are in various stages of what we call qualification visits and early construction drawings to identify what the power requirements are, what the power availability is either at the property. Because as you know, with our level two chargers, we typically pull from house power. And with DC fast chargers, we have to have a direct connection to the grid, so evaluating the power. We're also looking at the economics of each of those sites as well to make sure that they have the appropriate payback periods and the economic benefits that we seek. And once we get through that technical evaluation pipeline, those stations will then move into or a good portion of those stations will move into the deployment pipeline. From a timeline perspective, You know, it can really vary dramatically on an AHJ by AHJ basis. It depends on permitting. It depends on weather. There are a number of factors that can influence it, but we can see the full pipeline extend anywhere between six and 12 months, depending on the number of those factors. And again, you know, just to reiterate, you know, part of the reason

Wonderful. Thanks, Drew.

Very thorough. Appreciate it. I'll pass it on. Thank you.

Of course.

Thanks. And our next question will come from Pavel Malkinov from Raymond James.

Yet another guy who asks about the balance sheet. With the $60 million of cash on the balance sheet, which is you know, roughly half a quarter of SG&A. Is there a backup plan to provide any kind of bridge financing or, you know, even just a small amount of cash to get, you know, an extra several months of corporate cost funding if your primary financing plans end up being delayed into next year?

Well, Pavel, first of all, it wouldn't be a conversation without you unless you mentioned the balance sheet.

So thank you very much. I appreciate it. But no, of course, look, we are talking to, all kidding aside, we are talking to, you know, many different capital providers, many different sources of potential capital. And as I mentioned a moment ago in my remarks, we are looking at all possible structures of You know, we are not necessarily thinking about this as a one and done type of situation.

So, you know, your remarks are fair. Okay.

How much runway in your kind of internal planning do you have based on the cash balance as of September 30th?

At this point, Pavel, that's not something we're going to comment on. You know, I think we are looking at this business over the long term. We are putting Volta in the best position possible to continue to execute against its plan, service the relationships that we've got pursuant to the MSA partners that we have developed Those relationships that we are developing, you know, our plan is to be a leading provider of EV charging infrastructure for a long time. So, you know, and we continue to reduce costs and working on those efforts as well. So this is an ongoing effort. This is an ongoing effort as well.

So, you know, we believe that this is, you know, we're here for the long term.

Okay. looking at your kind of an accounting question, looking at your current liabilities, there is a, I see a term loan payable and then some just standard working capital items. Is any of that due before, you know, let's say December 31st?

Other than in the ordinary course? No. The term loan is a public document. Yeah. Yeah. Okay, so that's 2023 story. Correct. Okay, got it.

More about that as we continue to explore capital options, but yes, we're fine for now.

Understood. And then just a quick question on the demand side of the equation. You know, you mentioned the macro ad slowdown. That's, you know, point is very well taken. Are there certain kinds of advertisers that are more resilient, consumer staples, anything along those lines that are not affected by, for example, the supply conditions in the automotive value chain?

Hey, it's Frank. I'll jump in on that. Thanks for the question. So we're very focused on continuing to grow revenue, particularly in our media business. We're growing on an absolute basis. You saw the quarter. And, you know, while there are macroeconomic kind of areas that we're watching in the fourth quarter, I mean, this is peak season for many advertisers who are focused on their holiday campaigns. And so I think we're all familiar with some of the headwinds in the automotive sector, for example. But as you look into retail and as you look at brands around the holiday season, consumer packaged goods brands, for example, or very resilient. I was just talking with a CMO very recently, and he was telling me how during these times of uncertainty, the focus goes on the prioritization of what marketers know works, and what they know that they can also measure. I'm incredibly proud of what the Volta Media team has built over the past year, which is a digital advertising platform where advertisers can reach consumers in the real world minutes before they make a purchase decision about product A or product B, and our ability to demonstrate the effectiveness of that advertising back to the marketer. That combination of ingredients is what we feel continues to set up Volta better than most, particularly during times when marketers may be questioning their media priority. reference briefly on the call. If you look at the areas right now of high growth in advertising, digital at-home and retail media are both forecasted to be high growth areas in advertising, and those are two areas where Volta plays exceptionally well. So that's how we're thinking about the business, particularly heading into the holiday season.

All right. Thank you very much, guys.

And our next question will come from Craig Shearer with TUI Brothers.

Good afternoon. I want to make sure I understand the answer to Andrea's question. The 96 million CWIP doesn't sound like it's physical capital in the ground, but that it can include capitalized costs for permitting, engineering, and other before physical equipment deployment. And so first I want to make sure I have that right. And to the degree that's right, that would imply that you're not necessarily on the cusp of finishing off a sizable chunk of SALs for just the minimus incremental capital. Is that fair?

Craig, I'm sorry. You broke up a little bit. Can you repeat the beginning part of your question again? It was hard to hear. I'm sorry.

No problem. So on your slides, the $96 million of CWIP, uh it it sounds from the discussion like that's not necessarily partially installed physical equipment on the ground but could be capitalized permitting engineering and other costs uh such that um and i'm trying to get a sense of how close are you in terms of just a little bit additional capital to having a slew of additional revenue generating stalls um and and if you're capitalizing a lot of you know uh costs that that aren't physical equipment then maybe it would be a little more difficult to get your next you know whatever 500 stalls yeah this is gary little calling i'm speaking sorry um it's a great question so within the uh construction progress balance you are correct those are

But your question's right.

We do look at the value on our balance sheet as well as what the installation cap was required to install and satisfy our development pipeline.

Each site is really unique in terms of how installation occurs. So depending upon what that deployment pipeline looks like, it can vary.

But we're currently working with internally stations available.

Okay, and I guess just to sum it up, in that $96 million CWIP, there's intangible capitalized costs that aren't physical equipment on the ground.

Yeah, and currently right now that's all tangible items.

It's the charge stations and digital media screens, the line above on that slide, that are stations in the ground.

So you have 96 million of physical equipment that isn't currently as yet in operation and revenue producing. So you have a lot of equipment that's on the cusp of potentially getting over the hump and being revenue producing.

Well, yes, and that also includes some engineering costs, foreign fees, as you'd expect on the install side, but costs that are currently being deployed

screens and charging all right and um i i just want to get a better sense that there was a really big drawdown of cash in the quarter and i'm trying to get a sense if if there were some one-time events in that like sevens costs you know to cut your ongoing overhead or something but you know it seemed like there was a a very large drawdown from the second quarter cash balance to the third quarter Gotcha. So that probably feeds into my first question, that all those inventory payments kind of fill in your CWIP position. So you do have some assets on the ground that aren't producing yet, and with a little help, you can kind of get that over the hump.

That's correct, yeah. Great. Thank you.

And we'll take a follow-up question from Andre Shepard with Cantor Fitzgerald.

Hey, guys. Sorry, me again. I wanted to maybe, I don't think this was asked, but I just wanted to get an opportunity to see how the partnership with Walgreens was progressing. I assume some of the stalls that you're having on the pipeline for next quarter and for 2023, I presume some of those will be a result of that partnership with Walgreens, I guess. But I'm really trying to get at is, you know, as you look forward to the installation of new chargers, are you going to be almost exclusively prioritizing the DC fast chargers as opposed to the level two, or is it still going to be some sort of mix? Thanks, guys.

Yeah, it's Frank. Thanks for the question. The short answer to your question is yes, we're continuing to focus on our partnership with Walgreens. You know, we believe that, you know, that will pick up pace as we enter into 2023. I think it's no secret that anyone who follows our sector notices some of the challenges very hard on mitigating those areas however you know in some cases there's only so much that we could do from our side so to speak so we'll leave it there for now got it okay thanks very much this concludes our question and answer session I'd like to turn the call back to Mr. Lipscher for closing remarks Thank you very much, and again, thank you to everyone who joined the call today for listening in. As you can hear, we continue to be incredibly excited and enthusiastic about Ed Volta and appreciate everyone's support and look forward to talking to you all soon.

Thank you very much.

And this concludes today's conference call. Thank you for attention.