NYSE:CHPT ChargePoint Q1 2025 Earnings Report $11.05 +0.55 (+5.24%) Closing price 08/8/2025 03:59 PM EasternExtended Trading$10.98 -0.07 (-0.63%) As of 08/8/2025 07:59 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. ProfileEarnings HistoryForecast ChargePoint EPS ResultsActual EPS-$3.20Consensus EPS -$3.80Beat/MissBeat by +$0.60One Year Ago EPSN/AChargePoint Revenue ResultsActual Revenue$107.04 millionExpected Revenue$106.09 millionBeat/MissBeat by +$950.00 thousandYoY Revenue GrowthN/AChargePoint Announcement DetailsQuarterQ1 2025Date6/5/2024TimeN/AConference Call DateWednesday, June 5, 2024Conference Call Time4:30PM ETUpcoming EarningsChargePoint's Q2 2026 earnings is scheduled for Wednesday, September 3, 2025, with a conference call scheduled at 4:30 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q2 2026 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by ChargePoint Q1 2025 Earnings Call TranscriptProvided by QuartrJune 5, 2024 ShareLink copied to clipboard.Key Takeaways Q1 financial beat: Revenue of $107 M topped the midpoint of guidance, non-GAAP gross margin rose to 24% and non-GAAP operating expenses fell to $66 M, driving adj. EBITDA loss down to $36 M. Deal delays: Eight-figure worth of orders were postponed due to construction and infrastructure hold-ups, deferring shipments and revenue into later quarters. Inventory build: Finished-goods inventory increased 13% as ChargePoint honored commitments to manufacturing partners, with normalization now expected by year-end. Path to profitability: Management reiterated its target to be adjusted EBITDA positive in Q4, supported by actionable COGS reductions, OpEx controls and large deals slated for second half. Rising network utilization: Q1 saw charger usage outpace new installations by over 20%, signaling strong demand for EV infrastructure as EV-to-charger ratios climb. AI Generated. May Contain Errors.Conference Call Audio Live Call not available Earnings Conference CallChargePoint Q1 202500:00 / 00:00Speed:1x1.25x1.5x2xThere are 13 speakers on the call. Operator00:00:00Ladies and gentlemen, good afternoon. My name is Christa, and I'll be your conference operator for today's call. At this time, I would like to welcome everyone to the ChargePoint First Quarter Fiscal 2025 Earnings Conference Call and Webcast. All participants' lines have been placed in a listen only mode to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Operator00:00:25I would now like to turn the call over to Patrick Hammer, ChargePoint's Vice President of Capital Markets and Investor Relations. Patrick, please go ahead. Speaker 100:00:36Good afternoon. Thank you for joining us on today's conference call to discuss ChargePoint's Q1 fiscal 2025 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 Chief Executive Officer and Masi Khattani, our Interim Chief Financial Officer. Speaker 100:00:59This afternoon, we issued our press release announcing results for the quarter ended April 30, 2024, which can also be found on our website. We'd like to remind you that during the conference call, management will be making forward looking statements, including our outlook for our Q2 of fiscal 2025. 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 ks filed with the SEC on April 1, 2024 and our earnings release posted today on our website and filed with the SEC on Form 8 ks. Speaker 100:01:51Also, 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 historical periods in the investor presentation posted on the Investors section of our website. And finally, we'll be posting the transcript of this call to our Investor Relations website under the Quarterly Results section. And with that, I'll turn it over to Rick. Speaker 200:02:14Good afternoon, everyone, and thank you for taking the time to learn more about ChargePoint's Q1 fiscal 2025 results. Today, we are going to recap the Q1's financials, some recent highlights and discuss the state of the market. We will update you on our 4 areas of strategic focus, key accomplishments and new partnerships we have formed. Our Interim CFO, Manzi Khattani will give Q2 guidance in her portion of the call. I want to start by emphasizing that when we say we will do something, we fully intend to do it. Speaker 200:02:51My approach as CEO is to lead by example through clarity and accountability, provide regular updates and drive the organization to deliver on our commitments, not our intentions. That said, here are the top line financial results for the Q1. In Q1, we delivered what we targeted in our last earnings call. ChargePoint's revenue for the Q1 was $107,000,000 which is above the midpoint of our guidance range. Non GAAP gross margin was up to 24% and I am pleased that our non GAAP operating expenses came in at $66,000,000 which is down $8,400,000 from last quarter and a proof point of the financial prudence I discussed in the last earnings call. Speaker 200:03:38Our cash management is a priority and for the Q2 in a row we used significantly less cash than forecasted. Our non GAAP adjusted EBITDA loss for the quarter was down to $36,000,000 which is ahead of plan. While these results were positive, they could have been better. There were 2 areas where we saw opportunity. First, we had 8 figures worth of deals postponed to later quarters, primarily because of construction and infrastructure delays. Speaker 200:04:082nd, our inventory was up 13% as we stand behind our valuable manufacturing partners and continue to support our commitments. We chose to take the inventory and be a reliable partner over working down the inventory balance. Our inventory continues to gradually normalize, which we expect will take the rest of the year. Regarding our goal of becoming adjusted EBITDA positive in Q4, As I said at the beginning of this call, we will drive the organization to deliver on this and our other goals. We have a clear plan to get there and we exceeded our internal goal for Q1 EBITDA. Speaker 200:04:50Some key drivers are as follows. Large deals that have been booked and will ship later this year. The deals will be announced by our customers at the time they find best for their respective businesses. There are multiple initiatives underway that will have a positive impact on COGS, OpEx and margin rich top line contribution. These initiatives are specific and actionable and are embedded in our quarterly objectives. Speaker 200:05:18I will touch upon some of them in this call. As demonstrated in Q1, we will continue to reduce OpEx through operational rigor. We know you rely heavily on our past performance as an indicator of our future results, but I must remind you that we are a new leadership team with a new strategy and a serious commitment to operational excellence. As our Q1 results demonstrate, we are implementing positive changes that could not have been extrapolated based on our past results. Moving to the state of the market, it may feel like there is a lot to discuss this quarter and there has been a lot of media coverage in the sector, but the story remains the same. Speaker 200:06:02EVs are selling and people need the infrastructure to charge them. Various factors cause micro movements within this macro trend line, but the trend line continues upward. According to Bloomberg, non Tesla EV sales were up 13% compared to the Q1 of last year. In fact, EV sales at 6 of the 10 best selling OEMs increased 50% or more in Q1. As a reminder, while some OEMs are reducing projections for EV sales volumes, R and D continues at major global OEMs including Honda's recent announcement to spend $65,000,000,000 electrifying their lineup over the next 10 years. Speaker 200:06:47Per a report from the International Energy Agency titled Global EV Outlook 2024, from 2022 to 2023 investment announcements in EV and battery manufacturing totaled almost $500,000,000,000 of which 40% has been committed. Finally, to give commentary about plug in hybrids scaling faster than pure EVs, we view this as beneficial for ChargePoint. A plug in hybrid is a natural stepping stone towards full EV and plug in hybrids require charging. Plug in hybrid buyers are prospective home charger buyers and their adoption is putting utilization pressure on commercial and public chargers. We delivered nearly 4,000,000 PHEV charging sessions at workplaces in 2023. Speaker 200:07:38If it has a plug, it is supporting our business. The bulk of what customers and investors are reading summarizes the demand curve for electric vehicles, not demand for chargers. Against Q1's micro movements on the macro trend line, utilization pressure on the ChargePoint network, which we believe is a key indicator of charger demand, not vehicle demand, has never been higher. In Q1, we saw commercial utilization outpaced new charger installation by more than 20%. This has been building several quarters in a row, which indicates the need for incremental infrastructure to follow. Speaker 200:08:21To communicate this pressure in terms of vehicle adoption, in 2016 there were 7 electric cars for each public charging point. Today there are more than 20 EVs per public charging point. A new trend we are keeping an eye on is quite intriguing. Growing site host sentiment that EV adoption has reached critical mass and they are putting in charging regardless of current or future EV sales pace. In other words, we believe the correlation between passenger EV sales and charger demand is disconnecting. Speaker 200:08:58We will continue to monitor this with interest. What has moved from a trend to the norm is hardware and software disaggregation among our largest existing and prospective customers. It is becoming clear that the industry's leaders will supply world class software to support an entire hardware plus software solution regardless of who supplies the hardware. In North America and Europe, we see continued government support for infrastructure build out. Starting with the U. Speaker 200:09:28S. National Electric Vehicle Infrastructure Program, results are going well for ChargePoint. As of today and inclusive of the proposed awards in California announced earlier this week, ChargePoint's customers have been successful in winning more than 120 individual NetEaseight Awards totaling roughly $71,000,000 in grant opportunities. As the enabler of EV charging for entities who deploy NEVI funding, we support nevi grant applications, but aren't necessarily named as the awardee by the state agency. To date, about 30 state DOTs have issued competitive NEVI RFPs and around 20 states have announced awards. Speaker 200:10:11But we continue to support our customers in pursuit of NEVI grants that haven't opened their programs yet, as well as those that are on their 2nd or third round of funding. In the EU, a fear the government's alternative fuel infrastructure regulation went into effect on April 13. While not an incentive program, AFFIR sets targets for EV charging deployment and will encourage wider EV adoption. It will do so by setting standard requirements for charger hardware and software functions across the entire European Union. Not only was ChargePoint prepared to ensure our chargers are a fear compliant, we helped establish some of the parameters directly with the European Union. Speaker 200:10:59Next, I would like to give you an update on our strategic priorities. As a reminder, last quarter I introduced our new corporate strategy to you, which is summarized by the four cornerstones of prioritizing our open modular software platform, revamping our approach to hardware development, delivering world class driver experience and operational excellence. For each cornerstone, I will now relay the demonstrable progress I promised last quarter. In terms of software, it has been a busy quarter. We announced the latest enhancements to our fleet software platform, which include home charging reimbursement for company car drivers, commonly referred to as take home fleets, transit vehicle preconditioning and a substantially enhanced UI that is currently in its pilot phase. Speaker 200:11:55Most importantly, we made great progress opening our software up to 3rd party hardware in the USA. We had a good head start on this, thanks to our existing work in Europe. ChargePoint's BEenergize software, which we sell in Europe to manage entire charging networks has provided industry leading experience in managing mixed hardware. Look for Speaker 300:12:18our 1st Speaker 200:12:18hardware OEM announcement in the coming weeks. In Q4 of fiscal 2024, we received FedRAMP certification of our software, which as mentioned in our last earnings call enable us to sell to the U. S. Federal government. I am pleased to say that this certification is paying off. Speaker 200:12:38We booked 7 figures of FedRAMP required revenue in our very first quarter, including a sizable deal with the U. S. Navy. Our new approach to the design and manufacturing of hardware is also making a difference. Last quarter, we announced our partnership with Actel Polytech Incorporated for future hardware. Speaker 200:12:58And in the Q1, we began actively working on our first project together. As a reminder, this relationship will bring our products to market faster and at higher margins. We continue to develop this strategy and today I am delighted to announce a second hardware co development partnership. We have signed an agreement with Wistron NewWeb, commonly known as WNC to work on a set of future hardware projects and we look forward to a great working relationship with them. To recap our latest hardware news, we showed our upcoming megawatt charging system at the recent ACT Fleet Exposition. Speaker 200:13:37Designed for trucking, marine and aviation applications, this is the most powerful charger we will offer, capable of 1.2 megawatts at launch and multi megawatt charging in the medium term future. To give an idea of how incredibly powerful this system is, our LaunchSpec system can power more than 1,000 residential homes through a single connector. This upcoming connector protocol eliminates a key barrier to the electrification of large scale trucking, which in turn has the potential to reduce or eliminate the 400 +1000000 metric tons of greenhouse gases emitted by that segment. As we have said before, what is good for our business is also good for the environment. Our strategic decision to focus on a world class driver experience has delivered a wonderful solution for our newest partnership. Speaker 200:14:32We have established a relationship with Airbnb to increase the availability of EV charging at Airbnb listings across the USA. To accomplish this, we created a novel solution for Airbnb hosts encompassing the ChargePoint Home Flex residential charger installation software and support services. For drivers, this will guarantee a charge where they are staying a critical need for EV drivers on a road trip and one not always accomplished at a hotel. Better yet, the world class experience extends to the Airbnb hosts. We make their adoption of charging as an amenity near seamless. Speaker 200:15:14Once they answer 3 simple questions on our website, they have a quote including installation costs and we can implement charging in as little as 2 weeks as a turnkey solution. We are now exploring compelling use cases for this offering outside of the vacation rental industry, which is important for me to call out as one of those actionable margin rich initiatives currently underway. Operational excellence is our 4th cornerstone and the area in which our results have surpassed our internal expectations. We had a good quarter and are ahead of our plans for cash, gross margin, OpEx and adjusted EBITDA as a result. We remain disciplined factoring OpEx and margin impact into every decision we make. Speaker 200:16:01This requires a lot of restraint that has enabled focus and delivered results. The proof points above outline progress and deliverables under these four cornerstones of our strategy, which we will continue to do as the year progresses. Moving on to our latest non financial metrics of note, this is another area of the business which continually demonstrates scale. In the quarter, we reached 2 amazing milestones. Most significantly, ChargePoint now offers drivers access to more than a 1000000 places to charge worldwide across public, private and roaming ports. Speaker 200:16:42For us, this is a celebratory milestone and equally impressive was the fact that this statistic grew approximately 10% in a single quarter. The other milestone reached in Q1 is that we have now enabled more than 10 1,000,000,000 electric miles for our drivers, which is approximately 3,500,000 cross country trips from San Francisco to New York. Our managed port count has grown to more than 306,000. Of note, the number of DC fast charger ports under management grew more than 14% in Q1 alone for a total surpassing 27,000 fast chargers under management at the end of Q1. These statistics should leave you with this key takeaway. Speaker 200:17:29EV adoption is continuing at an incremental pace and our network is scaling along with it. As our network grows, so do our subscription revenues. I'd like to thank you again for joining us today. To summarize, Q1, the results were positive and we will gain momentum as the year moves on. If you look at our news and announcements so far in Q2, you will see that momentum is clearly building. Speaker 200:17:58Before turning the call over to our CFO, Monty, for the financial review, I would like to once again remind you that when we say we will do something, we fully intend to do it. Hopefully, you agree that Q1 was an early proof point of this. Thank you for your time and ongoing support. Speaker 400:18:18Thanks, Rick. As a reminder, please see our earnings release where we reconcile our non GAAP results to GAAP. Our principal exclusions are stock based compensation, amortization of intangible assets and certain costs related to restructuring and litigation. We continue to report revenue along three lines: network charging systems, subscriptions and other. Network charging systems represents our connected hardware. Speaker 400:18:47Subscriptions include our cloud services connecting that hardware, our Assure warranties and our ChargePoint as a service offering where we bundle our full stack solutions into recurring subscriptions. Other consists of professional services and certain non material revenue streams. Moving on to the results for the quarter, revenue was $107,000,000 above the midpoint of our guidance range of $100,000,000 to $110,000,000 This was 8% lower than the 4th quarter, reflecting the expected seasonal slowdown and 18% lower year on year due to lower hardware revenue. Network charging systems at CAD65 1,000,000 accounted for 61 percent of 1st quarter revenue. This was down 12% sequentially due to the impact of seasonality and down 34% year on year in line with our expectations. Speaker 400:19:44Subscription revenue at $33,000,000 was 31% of total revenue, essentially flat sequentially and up 27% year on year. Other revenue at 8,000,000 dollars was 8% of total revenue, plus sequentially and up 54% year on year. Turning to verticals. We report verticals from a billings perspective, which approximate the revenue split. 1st quarter billings percentages were commercial 63%, fleet 20%, residential 15% and other 3% generally consistent with last quarter. Speaker 400:20:25As Rick mentioned, we continue to see projects pushed out in both commercial and fleet verticals as customers await site readiness and vehicle delivery. Our home products continue to sell very well and in the Q1 a significant portion of our home units shipped were equipped with a NACS connector. From a geographic perspective, North America made up 81% of 1st quarter revenue and Europe was at 19%. In the U. S, we generated our first sales from the nevi program. Speaker 400:20:59Turning to gross margin. Non GAAP gross margin for the Q1 was 24%, up sequentially from 22% in Q4. Gross margin was down 1 percentage point year on year. The sequential improvement was largely due to improved subscription margins as well as a larger mix of subscription revenue within overall revenue, which is typical in a seasonally low Q1 with lower hardware sales. Non GAAP operating expenses for Q1 was CAD 66,000,000 a decrease of 22% from CAD 85,000,000 in Q1 last year and a decrease of 11% from CAD 75,000,000 in Q4, reflecting the full quarter impact of the January restructuring and our continued focus on cost management. Speaker 400:21:49Non GAAP adjusted EBITDA loss for the Q1 was CAD 36,000,000 dollars a significant improvement as compared to a loss of $45,000,000 in the 4th quarter and a loss of $49,000,000 in the Q1 of last year. This improvement was achieved even with a lower revenue base due to gross margin improvement and reduction in operating expenses. Stock based compensation in the Q1 was $22,000,000 down from $25,000,000 in the 4th quarter and down $2,000,000 year on year due to recent restructuring events. Looking at cash and cash equivalents, we ended the quarter with $292,000,000 down from $358,000,000 last quarter. In addition to cash usage to cover adjusted EBITDA loss, cash consumption included a semi annual interest payment on our convertible bond as well as severance charges associated with our January restructuring. Speaker 400:22:49I am pleased to relay that the $30,000,000 of restricted cash as of April 30, 2024 is now unrestricted. This leaves only $400,000 restricted of our $292,000,000 cash balance. As Rick mentioned, inventory balance increased in the quarter as we started to bring up our Southeast Asia based partner. However, our inventory is primarily made up of finished goods and products that we are actively selling. We expect to bring this down in the second half of the year as we sell through the finished goods on hand. Speaker 400:23:25Our deferred revenue continues to grow. This represents payments for future revenue commitments from existing customers and finished the quarter at CAD 235,000,000 up from CAD231,000,000 at the end of Q4. Our $150,000,000 revolving credit facility remains undrawn and we have no debt maturities until 2028. We did not issue any shares via the ATM during the quarter. At the end of the Q1, we had approximately 425,000,000 shares outstanding. Speaker 400:24:01Turning to guidance. For the Q2 of fiscal 2025, we expect revenue to be between $118,000,000 down 25% year on year at the midpoint. As mentioned in the last call, we expect a larger portion of full year revenue to be generated in the second half. This is due to the following: normal seasonality of transactional business visibility into large orders booked across both commercial and fee verticals for the second half as well as signs of overall charging demand recovery driven by factors Rick alluded to earlier. We continue to expect gradual improvement in gross margin as the year progresses as a result of continued cost down efforts for hardware products and improvements in subscription margins due to operating efficiency of the support organization combined with automation initiatives underway. Speaker 400:25:01We expect non GAAP operating expenses to remain relatively flat in the second quarter, but fall further in the second half of the year as we continue to focus on operational efficiency and other cost avoidance measures. We are committed to being adjusted EBITDA positive in Q4 of this year and plan to achieve that through a combination of accelerated top line growth, gross margin improvements as well as operating expense reductions as we progress through the year. We are well capitalized to achieve this goal. In summary, we are pleased with the improvement in our overall financial performance, especially the improvement in adjusted EBITDA loss resulting from improved gross margin and reduced OpEx as well as overall cash management and we will continue to focus on these metrics as the year progresses. With that, I will turn the call back to the operator for questions. Operator00:25:58Thank Your first question comes from the line of James West with Evercore ISI. Please go ahead. Speaker 300:26:20Hey, good afternoon, Rick and Monty. Speaker 200:26:24Hi, James. Speaker 300:26:26Rick, maybe first question for me on the significant number of nevi wins that you've had so far, which should turn into grants and sales here. What's the expected timeline for recognizing those sales? I know there's been some delays in kind of getting the NEVI program underway, which I recognize we kind of all expected in the beginning as its government program and had to go to the States. But how are you thinking about the rollout and the sales hitting your revenue? Speaker 200:26:58We'll see some this year for sure, but we expect the bulk of it to be next year. Speaker 300:27:05Okay, okay. Got it. And then you announced the new or at least a new agreement, a joint development agreement with WNC in your prepared remarks. I know we had the Kimpo Polytech announcement recently as well. Could you maybe unpack kind of the what you're doing there? Speaker 300:27:25What the strategy is? How you're realigning your hardware development? Speaker 200:27:32We have a very robust hardware roadmap and a variety of new products that we're very excited to bring to market and adding more hardware development bandwidth to the overall effort is clearly beneficial to what we're trying to accomplish. So we've added WNC as a second partner in addition to Akbel Polytech to increase that bandwidth. And we have been each focused on certain areas of specialization that will allow us to bring some really exciting and compelling market products to market as we move into the future. Speaker 300:28:08Got it. Thanks Rick. Operator00:28:12Your next question comes from the line of Colin Rusch with Oppenheimer. Please go ahead. Speaker 500:28:18Thanks so much guys. If you look at some of the utilization rates moving higher and the pressure that's building around the overall network. Can you talk about what you're seeing as precursors to incremental orders or incremental capacity build out with your customers in particular geographies? Speaker 200:28:37Yes. Hi, Colin. I think in addition to the increasing utilization pressure, as I mentioned in the prepared remarks, we're also seeing this dislocation, especially in commercial charging between the sale of EVs and the demand for chargers. I think in areas where there's reasonable EV penetration, you're seeing institutions that want people to come to their building putting in chargers now because they know there's a critical mass of EV drivers out there that they need to attract to their business or their institution. So you've got the utilization pressure going up. Speaker 200:29:18You've got this recognition that if I don't have EV charters in my parking lot, see some people I care about aren't going to come to my business, combined is what's starting to show some demand in the commercial market for chargers that may not directly correlate with EV sales. Speaker 500:29:37That's super helpful. And then thinking about inventory levels and what you've just added to the inventory, how should we be thinking about kind of overall run rate on what you're going to be carrying and what this incremental inventory build, what is constituted in there? Is it finished goods? How much is components? How flexible is that inventory? Speaker 500:29:59And now should we see that trend through the balance of the year? Speaker 400:30:03Yes. Hi, Colin. So it's mostly finished goods in the inventory right now. There's a little bit of raw material. There's some material in transit, but majority is finished goods. Speaker 400:30:14And it is made up of products that we're actively selling, all next gen products. We review inventory very, very religiously every quarter. And it's all live inventory actively selling products in there right now. Speaker 500:30:33Okay. I'll follow-up on that offline. Thanks so much guys. Operator00:30:38Your next question comes from the line of Bill Peterson with JPMorgan. Please go ahead. Speaker 600:30:45Yes. Hi. Good afternoon. Thanks for taking the questions. I'm wondering if you've received any incremental inbounds or demand from customers interested in tapping your fast product charger. Speaker 600:30:59So as the superchargers business like Turnvy, obviously a big chunk of the team has let go. Have you seen any like increased demand in let's say, nevi or commercial programs in particular? Speaker 200:31:13Yes. Again, the Tesla changes, exactly what happened there, some of it has been reported on extensively, but I'm not sure how accurate at all is. So some of it's speculation, but from our perspective, there's been some clear benefit as a result of those changes. We've had access to some good talent that has become available, which is good for us. And we've also seen some changes in the market in demand in certain areas apparently as a result of the Tesla changes and we're absolutely capitalizing on those when they come up. Speaker 600:31:54Great. Thanks for that. Obviously, you're expanding your hardware agreements across the board. I'm wondering if you're how would you characterize any sort of subletting for us with your existing inventory? I mean, are you seeing any signs that customers would prefer to wait for any newer hardware from your partners in Asia? Speaker 600:32:10Or I are you offering attractive pricing? How are you planning to get rid of the high cost inventory in your existing sort of product lines ahead of the newer products? Speaker 200:32:21So I didn't catch the entire question clearly, Bill, but I'll do my best based on what I understood. So the level of inventory we have is something we will continue to work down as we move through the course of the year. We've got a lot of focus as we've mentioned multiple times, really is around managing inventory as Monty mentioned. Really is around managing inventory as Monty mentioned. So we've got again, I think a very strong process in place now such that we don't drive excess inventory. Speaker 200:32:53What we're working through is inventory that we have on hand plus inventory we've committed to take from our valuable manufacturing partners. And we expect it to take the rest of the year to work through that and get down to what we would consider a normalized inventory in both our on our balance sheet as well as with our manufacturing partners. Speaker 600:33:17Okay. Thanks. I'll take the rest offline. Thank you. Operator00:33:21Your next question comes from the line of Matt Summerville with D. A. Davidson. Please go Speaker 700:33:27ahead. Thanks. To that last point, the fact that this inventory normalization you're looking at is going to take the better part of this fiscal year. I would imagine there's some sort of margin penalty associated with that. So as I think about next year under a more normalized operational situation in that regard, how much of an uplift should you get from not having to kind of deal with these issues? Speaker 700:33:55And similarly, I'd like just maybe a little more color on how some of these new Asian manufacturing and development relationships are sort of bearing fruit for you guys and when maybe we really start to see more concrete gross profit improvement? Speaker 200:34:14Yes. Your first question was very insightful, Matt. Thanks for that. And there's I don't know if I would call it a penalty on gross margin, but just definitely we're deferring optimal gross margin or optimal product costs. We're working through inventory on some product lines that was built at higher cost basis than we would enjoy if we were building that inventory new today out of one of our Asian factories or even one of our existing factories because we continue to drive costs down on the materials that go into our products in addition to the overall cost of manufacturing them. Speaker 200:34:48So we expect again that inventory to be worked through by the end of the year. And at that point, we'll realize all the benefits of the cost down efforts we've taken both on the materials that go into our products as well as the costs related to manufacturing of those products. Specifically on our Asian manufacturing partners, both now at Bell Polytech as well as WNC are in production for us. And the benefit not only is the cost structure of Southeast Asia where they're both located in manufacturing for us, But almost more importantly is the localized supply chain we can now access in that part of the world. Southeast Asia has been building high technology products for almost 50 years now and the local suppliers there are very capable of building high quality, highly reliable parts at very cost effective prices. Speaker 200:35:42If you look at some of our manufacturing, we've done up to now outside of Asia, many of the parts that go to those factories come from Asia. So not only do we have a richer way to access the Southeast Days and supply chain capabilities, but we're also going to reduce lead time and minimize logistics costs because the parts are going to be much closer to the factories. Speaker 700:36:07Thank you for that. And then just as a follow-up, I think you had mentioned in your prepared remarks you had $10,000,000 or more in revenue that basically pushed to the right due to resource constraints, I'll call that. And I guess I'm wondering if that constraint issue, is that something that is more acute in nature or more chronic? Is that something that's going to get worse before it gets better? If you can maybe just talk through that a little bit. Speaker 200:36:37So it isn't resource constraints on behalf of ChargePoint, Matt. It's resource I don't know if you characterize it as frequent source constraints, but it's construction delays and delivery of other infrastructure equipment like transformers and switch gears to sites that are under construction. That's largely what we see causing deals to move out from quarter to quarter are delays with site readiness and site construction. Speaker 300:37:06Got it. Thanks, sir. Operator00:37:09Your next question comes from the line of Chris Pierce with Needham and Company. Please go ahead. Speaker 800:37:16Hey, good afternoon. What's the right way to think about subscription revenue being flat quarter over quarter after the step up we saw in the Q4? Speaker 400:37:25Yes. The reason for that was in Q4, we had a small adjustment in Assure revenue, typical year end adjustment, which did not reoccur in Q1. So if you normalize for that, you would have seen a gradual improvement in line with normal trends. Speaker 800:37:43Okay, perfect. Thank you for that. And then just following up on the last question, the 8 figures of deals, is the right assumption that they would have hit this quarter and you still hit the midpoint above the midpoint of your top line guidance? Or is that just a general comment and that they've slipped in they weren't necessarily in this quarter? Speaker 200:38:03If they had hit this quarter, we would have been above range. Speaker 800:38:09Were they in the range were they in the original guidance though or that's getting too deep in the weeds? Yes. Speaker 400:38:15So we basically see some kind of deal slippage every quarter, right? So we have a guidance methodology that takes into consideration all of that. So we kind of ensure that we hit the range. So we did build in some kind of padding for that. Speaker 800:38:35Okay, perfect. And then just one follow-up on one other question, one last question. So the right way to think about it is Appel and Wistron aren't building next generation products right now. They're helping you build existing product at lower cost and that's why the inventory that you have is the inventory that you're able to sell through this year in theory without taking any sort of charges against it. That's the right way to think about it? Speaker 200:38:59Yes. Generally speaking, they're building current generation products as we speak. They're also we're also co developing next gen products with them. And in some cases, there's prototype builds underway now for those next gen products with both partners. Speaker 600:39:16Okay. Thank you. Operator00:39:19Your next question comes from the line of Mark Delaney with Goldman Sachs. Please go ahead. Speaker 900:39:26Yes. Good afternoon. Thanks for taking the questions. You mentioned you have some bigger programs you expect to ship for in the second half of this year. Can you give us a sense of how much revenue you expect these larger programs to amount to in terms of the pickup in revenue? Speaker 400:39:41Yes. Generally, as we had mentioned in my prepared remarks, this year, we're going to see a much more normal seasonality like we've seen in prior normal years with majority of our revenue coming in, in the second half. And even as we kind of start emerging from this macro and use slowdown in the first half, we believe that the second half will be even seasonally stronger than past years. We have factored in we're confident of the seasonality coming in because of these large deals that we're seeing in our pipeline, all the verticals that we have, right? And on the fleet side, we're seeing large FedRAMP deals, deals pushed out from the first half into the second half. Speaker 400:40:27E Bus continues to be strong. USPS deals are in there. On the commercial, we're seeing some Navy funded deals coming into the second half and workplace is picking up. On the residential side, our residential product is doing well. We just announced the Airbnb deal. Speaker 400:40:42That will give us some push. So all of this is kind of in the pipeline for the second half. In addition, we have new products like the pantograph that we've announced that's launching in the second half. So we're seeing good amount of pipeline built up for that as well. Speaker 900:40:57Very helpful color. Thanks for that, Mansi. And then my other question was on OpEx, came down to $66,000,000 on a non GAAP basis this quarter. I think you said it could fall further, I believe on a dollar basis in the second half of the year. So I was hoping to better understand where OpEx dollars could go to on an absolute basis in 2H? Speaker 900:41:13Thanks. Yes. Speaker 400:41:15We're not specifically guiding to OpEx in the second half, but I do expect that OpEx will come down. So from the Q1 levels of 66,000,000 dollars I think Q2 will kind of stay flattish as we have some mandatory raises in some regions, etcetera. So that will kind of wash out the cost avoidance initiatives that we will have. But then in the second half, we have specific plans in mind, one being reduction in NRE costs, nonrecurring engineering costs as we transition more and more engineering over to our Asia partners. And in addition to that, we have a lot of different ways planned. Speaker 400:41:56Generally, what we saw in Q1 was we're seeing fiscal discipline across the entire company and this is showing amazing results. So we overachieved our plan in Q1 and so we're really confident that we'll achieve what we have planned for the second half. Speaker 800:42:12Thank you. Operator00:42:15Your next question comes from the line of Steven Fox with Fox Advisors LLC. Please go ahead. Speaker 1000:42:22Hi, good afternoon. Rick, I was wondering if you can go back over the rationale behind the deals being postponed. I think the question we're trying to get at is, whether this is something that we should think of as an ongoing situation even as your sales grow because of where we are in sort of supply chains, worker availability, infrastructure or whether you think it eases or gets worse. Any kind of color on how you approach sort of the construction backdrop relative to your backlog? And then I had a follow-up. Speaker 200:42:59Yes, good question, Stephen. I think as Manci alluded to, we've got a buffer in place where we account for this every quarter and we're not planning for it to go down. We are not aware of any reasons that would allow construction to accelerate holding our assumptions regarding deals that roll over from 1 quarter to the next fairly constant as we move through the year. Speaker 1000:43:29That's helpful commentary. And then just on the beat in the quarter, I mean, outside of the inventories that was already asked about, it seems like you consistently outperformed across the metrics. I don't know what you is there some overarching theme you would attribute that to when you given all the changes you made organizationally, etcetera? Or is it just little singles and doubles here and there? Thanks. Speaker 200:43:57Easy to summarize it up under this big headline kind of operational excellence, which is very easy to say, but it's a lot of work to do that. And we've got 9 different areas that we focus on specifically. And essentially what another way to talk about this is we have the right people talking about those 9 different topics at the right frequency, making sure that we're making all the right decisions and managing our resources extremely efficiently. And again, we're really impressed with the results that our team produced in the Q1. And we know there's more opportunity left to be had. Speaker 200:44:34As Monti alluded to, we expect to see that show up in the OpEx number as we move through into the second half of the year. Speaker 800:44:42Great. That's helpful. Thank you. Operator00:44:47Your next question comes from the line of Chris D'anguinos with RBC Capital Markets. Please go ahead. Speaker 1100:44:55Yes. Good evening and thank you. Speaker 800:44:58I guess maybe to kick Speaker 1100:44:59off here, you highlighted some decent growth in the DC fast charger demand. I'm kind of curious, are you seeing any kind of pivot in what customers are demanding? Is there any changes in, I guess, level 2 versus that DC fast charger product? Speaker 200:45:16No, I don't think we're seeing any demand changes between the AC and DC. I think what we're seeing is new products like the pantograph that Manci mentioned now in our portfolio creating demand that wasn't there for us before on DC for the e bus applications. Speaker 1100:45:36Got it. Okay. And then I may hate to beat this one to death a little bit here, but just kind of going back to the revenue cadence and some of the delays. And I guess, I think you mentioned delays in product availability for, I guess, EV availability for customers and then site prep being ready on time. I guess what kind of gives you confidence that it's going to be there later this year and to each do you have any I guess kind of firm visibility to I guess these sites being ready or the vehicles being delivered? Speaker 200:46:14So again, on the commercial side, we're starting to see this dislocation between vehicle delivery and the desire for our commercial customers to continue to expand or put charters in their parking lot. And we don't see any reason for that trend to discontinue. Another way to put it is, if you go to a local business in an area where there's reasonable EV penetration and not another EV was ever sold in that area. They would still make sure they had enough charters in their parking lot to attract the audience of people in that area they care about that they want to come to that building. So I think that's good news for us. Speaker 200:46:51On the other hand, I think you're seeing some really exciting product offerings either announced or coming this year on the passenger vehicle side. I've seen some really cool vehicles in our parking lot recently that have just come on to the market. So I'm optimistic about that. On the fleet vehicle side, I personally don't have any statistics on forecasted delivery for fleet vehicles. But anecdotally for any of us that were at the ACT Expo in Las Vegas a couple of weeks ago, just the sheer breadth of selection and vehicles that are in production and available for fleets was very impressive. Speaker 200:47:29So it's based on that anecdotal observation having personally been an act, I think it looks like that the fleet vehicles are coming. Speaker 800:47:39Got it. Thank you. Operator00:47:43Your next question comes from the line of Craig Irwin with Roth MKM. Please go Speaker 1200:47:49ahead. Good evening and thanks for taking my questions. So Rick, several times on this call you've expressed confidence in the rebound in revenue, the rebound in outlook for the second half. And I commend the focus on achieving positive EBITDA before the end of the year. But when we look at your guidance for the July quarter, the 2nd fiscal quarter, 108 to 118, at the midpoint, you're down 25% year over year, which is a deterioration from 18% contraction in the January quarter sorry, the April quarter. Speaker 1200:48:26Can you maybe reconcile for us this modest deterioration as far as what you're giving us for an outlook versus what you expect to come together in the back end of the year. Is there a small piece that's maybe moving around on some of this political uncertainty or some of the customers recalibrating with Tesla exiting the market? Any color there would be helpful. Speaker 400:48:50Yes. I can take that, Craig. So in terms of guidance for Q2, we have been prudent in our guidance because the macro overhang still exists. In Q2, while we're seeing signs of the environment improving in our pipeline build, the RFP volume and RFP success rate internally within the business. It does give us confidence for the second half. Speaker 400:49:15But in Q2, we're still seeing some of the overhang until we're doing the right thing by being prudent in the guidance. Speaker 1200:49:23Okay, excellent. And then my follow-up question is regarding fleet specifically. So can you maybe give us color on whether or not utility work and site preparation is important and essential for you to recognize revenue if we see some of these very large fleet customers move forward with expanding installations towards the end of the year. A number of them have used ChargePoint in the past. Will this potentially be a gating factor for you? Speaker 300:49:58I don't Speaker 200:49:58know if I'd consider it a gating factor. It is a factor that dictates the timing of deployment and therefore revenue. There's no question that fleet customers that are undergoing significant construction try and time the delivery of the charging gear with the completion of the site construction work. So we are our revenue and our shipping is dictated by that to a certain extent. So that's the way it is in this industry and we work with that and we make our we build our forecasts on that factual information. Speaker 1200:50:34Thank you for that. Well, congratulations on the progress with the cost reductions. Speaker 200:50:40Thanks, Craig. Operator00:50:43That concludes our question and answer session. And with that, that does conclude today's conference call. Thank you for your participation and you may now disconnect.Read morePowered by Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) ChargePoint Earnings HeadlinesChargePoint Holdings’ Stock Soars Amid Strategic MovesAugust 9 at 8:12 PM | msn.comB. Riley Predicts ChargePoint's Q2 Earnings (NYSE:CHPT)August 3, 2025 | americanbankingnews.comIs This Stock the 'Next Nvidia'?'AI Bottleneck' Now Threatens Entire Magnificent 7 A new critical failure has appeared in the AI market, and has now reached every AI company in America... including Nvidia, Microsoft, and Meta. | Altimetry (Ad)Brokerages Set ChargePoint Holdings, Inc. (NYSE:CHPT) PT at $27.88August 3, 2025 | americanbankingnews.comWhy ChargePoint Stock Slumped This WeekAugust 1, 2025 | fool.comChargePoint Implements Reverse Stock SplitJuly 30, 2025 | theglobeandmail.comSee More ChargePoint Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like ChargePoint? Sign up for Earnings360's daily newsletter to receive timely earnings updates on ChargePoint and other key companies, straight to your email. Email Address About ChargePointChargePoint (NYSE:CHPT), together with its subsidiaries, provides electric vehicle (EV) charging networks and charging solutions in the North America and Europe. The company serves commercial, such as retail, workplace, hospitality, parking, recreation, municipal, education, and highway fast charge; fleet, which include delivery, take home, logistics, motor pool, transit, and shared mobility; and residential including single family homes and multi-family apartments and condominiums customers. ChargePoint Holdings, Inc. was founded in 2007 and is headquartered in Campbell, California.View ChargePoint ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Airbnb Beats Earnings, But the Growth Story Is Losing AltitudeDutch Bros Just Flipped the Script With a Massive Earnings BeatIs Eli Lilly’s 14% Post-Earnings Slide a Buy-the-Dip Opportunity?Constellation Energy’s Earnings Beat Signals a New EraRealty Income Rallies Post-Earnings Miss—Here’s What Drove ItDon't Mix the Signal for Noise in Super Micro Computer's EarningsWhy Monolithic Power's Earnings and Guidance Ignited a Rally Upcoming Earnings SEA (8/12/2025)Cisco Systems (8/13/2025)Alibaba Group (8/13/2025)NetEase (8/14/2025)Applied Materials (8/14/2025)Petroleo Brasileiro S.A.- Petrobras (8/14/2025)NU (8/14/2025)Deere & Company (8/14/2025)Palo Alto Networks (8/18/2025)Medtronic (8/19/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 13 speakers on the call. Operator00:00:00Ladies and gentlemen, good afternoon. My name is Christa, and I'll be your conference operator for today's call. At this time, I would like to welcome everyone to the ChargePoint First Quarter Fiscal 2025 Earnings Conference Call and Webcast. All participants' lines have been placed in a listen only mode to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Operator00:00:25I would now like to turn the call over to Patrick Hammer, ChargePoint's Vice President of Capital Markets and Investor Relations. Patrick, please go ahead. Speaker 100:00:36Good afternoon. Thank you for joining us on today's conference call to discuss ChargePoint's Q1 fiscal 2025 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 Chief Executive Officer and Masi Khattani, our Interim Chief Financial Officer. Speaker 100:00:59This afternoon, we issued our press release announcing results for the quarter ended April 30, 2024, which can also be found on our website. We'd like to remind you that during the conference call, management will be making forward looking statements, including our outlook for our Q2 of fiscal 2025. 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 ks filed with the SEC on April 1, 2024 and our earnings release posted today on our website and filed with the SEC on Form 8 ks. Speaker 100:01:51Also, 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 historical periods in the investor presentation posted on the Investors section of our website. And finally, we'll be posting the transcript of this call to our Investor Relations website under the Quarterly Results section. And with that, I'll turn it over to Rick. Speaker 200:02:14Good afternoon, everyone, and thank you for taking the time to learn more about ChargePoint's Q1 fiscal 2025 results. Today, we are going to recap the Q1's financials, some recent highlights and discuss the state of the market. We will update you on our 4 areas of strategic focus, key accomplishments and new partnerships we have formed. Our Interim CFO, Manzi Khattani will give Q2 guidance in her portion of the call. I want to start by emphasizing that when we say we will do something, we fully intend to do it. Speaker 200:02:51My approach as CEO is to lead by example through clarity and accountability, provide regular updates and drive the organization to deliver on our commitments, not our intentions. That said, here are the top line financial results for the Q1. In Q1, we delivered what we targeted in our last earnings call. ChargePoint's revenue for the Q1 was $107,000,000 which is above the midpoint of our guidance range. Non GAAP gross margin was up to 24% and I am pleased that our non GAAP operating expenses came in at $66,000,000 which is down $8,400,000 from last quarter and a proof point of the financial prudence I discussed in the last earnings call. Speaker 200:03:38Our cash management is a priority and for the Q2 in a row we used significantly less cash than forecasted. Our non GAAP adjusted EBITDA loss for the quarter was down to $36,000,000 which is ahead of plan. While these results were positive, they could have been better. There were 2 areas where we saw opportunity. First, we had 8 figures worth of deals postponed to later quarters, primarily because of construction and infrastructure delays. Speaker 200:04:082nd, our inventory was up 13% as we stand behind our valuable manufacturing partners and continue to support our commitments. We chose to take the inventory and be a reliable partner over working down the inventory balance. Our inventory continues to gradually normalize, which we expect will take the rest of the year. Regarding our goal of becoming adjusted EBITDA positive in Q4, As I said at the beginning of this call, we will drive the organization to deliver on this and our other goals. We have a clear plan to get there and we exceeded our internal goal for Q1 EBITDA. Speaker 200:04:50Some key drivers are as follows. Large deals that have been booked and will ship later this year. The deals will be announced by our customers at the time they find best for their respective businesses. There are multiple initiatives underway that will have a positive impact on COGS, OpEx and margin rich top line contribution. These initiatives are specific and actionable and are embedded in our quarterly objectives. Speaker 200:05:18I will touch upon some of them in this call. As demonstrated in Q1, we will continue to reduce OpEx through operational rigor. We know you rely heavily on our past performance as an indicator of our future results, but I must remind you that we are a new leadership team with a new strategy and a serious commitment to operational excellence. As our Q1 results demonstrate, we are implementing positive changes that could not have been extrapolated based on our past results. Moving to the state of the market, it may feel like there is a lot to discuss this quarter and there has been a lot of media coverage in the sector, but the story remains the same. Speaker 200:06:02EVs are selling and people need the infrastructure to charge them. Various factors cause micro movements within this macro trend line, but the trend line continues upward. According to Bloomberg, non Tesla EV sales were up 13% compared to the Q1 of last year. In fact, EV sales at 6 of the 10 best selling OEMs increased 50% or more in Q1. As a reminder, while some OEMs are reducing projections for EV sales volumes, R and D continues at major global OEMs including Honda's recent announcement to spend $65,000,000,000 electrifying their lineup over the next 10 years. Speaker 200:06:47Per a report from the International Energy Agency titled Global EV Outlook 2024, from 2022 to 2023 investment announcements in EV and battery manufacturing totaled almost $500,000,000,000 of which 40% has been committed. Finally, to give commentary about plug in hybrids scaling faster than pure EVs, we view this as beneficial for ChargePoint. A plug in hybrid is a natural stepping stone towards full EV and plug in hybrids require charging. Plug in hybrid buyers are prospective home charger buyers and their adoption is putting utilization pressure on commercial and public chargers. We delivered nearly 4,000,000 PHEV charging sessions at workplaces in 2023. Speaker 200:07:38If it has a plug, it is supporting our business. The bulk of what customers and investors are reading summarizes the demand curve for electric vehicles, not demand for chargers. Against Q1's micro movements on the macro trend line, utilization pressure on the ChargePoint network, which we believe is a key indicator of charger demand, not vehicle demand, has never been higher. In Q1, we saw commercial utilization outpaced new charger installation by more than 20%. This has been building several quarters in a row, which indicates the need for incremental infrastructure to follow. Speaker 200:08:21To communicate this pressure in terms of vehicle adoption, in 2016 there were 7 electric cars for each public charging point. Today there are more than 20 EVs per public charging point. A new trend we are keeping an eye on is quite intriguing. Growing site host sentiment that EV adoption has reached critical mass and they are putting in charging regardless of current or future EV sales pace. In other words, we believe the correlation between passenger EV sales and charger demand is disconnecting. Speaker 200:08:58We will continue to monitor this with interest. What has moved from a trend to the norm is hardware and software disaggregation among our largest existing and prospective customers. It is becoming clear that the industry's leaders will supply world class software to support an entire hardware plus software solution regardless of who supplies the hardware. In North America and Europe, we see continued government support for infrastructure build out. Starting with the U. Speaker 200:09:28S. National Electric Vehicle Infrastructure Program, results are going well for ChargePoint. As of today and inclusive of the proposed awards in California announced earlier this week, ChargePoint's customers have been successful in winning more than 120 individual NetEaseight Awards totaling roughly $71,000,000 in grant opportunities. As the enabler of EV charging for entities who deploy NEVI funding, we support nevi grant applications, but aren't necessarily named as the awardee by the state agency. To date, about 30 state DOTs have issued competitive NEVI RFPs and around 20 states have announced awards. Speaker 200:10:11But we continue to support our customers in pursuit of NEVI grants that haven't opened their programs yet, as well as those that are on their 2nd or third round of funding. In the EU, a fear the government's alternative fuel infrastructure regulation went into effect on April 13. While not an incentive program, AFFIR sets targets for EV charging deployment and will encourage wider EV adoption. It will do so by setting standard requirements for charger hardware and software functions across the entire European Union. Not only was ChargePoint prepared to ensure our chargers are a fear compliant, we helped establish some of the parameters directly with the European Union. Speaker 200:10:59Next, I would like to give you an update on our strategic priorities. As a reminder, last quarter I introduced our new corporate strategy to you, which is summarized by the four cornerstones of prioritizing our open modular software platform, revamping our approach to hardware development, delivering world class driver experience and operational excellence. For each cornerstone, I will now relay the demonstrable progress I promised last quarter. In terms of software, it has been a busy quarter. We announced the latest enhancements to our fleet software platform, which include home charging reimbursement for company car drivers, commonly referred to as take home fleets, transit vehicle preconditioning and a substantially enhanced UI that is currently in its pilot phase. Speaker 200:11:55Most importantly, we made great progress opening our software up to 3rd party hardware in the USA. We had a good head start on this, thanks to our existing work in Europe. ChargePoint's BEenergize software, which we sell in Europe to manage entire charging networks has provided industry leading experience in managing mixed hardware. Look for Speaker 300:12:18our 1st Speaker 200:12:18hardware OEM announcement in the coming weeks. In Q4 of fiscal 2024, we received FedRAMP certification of our software, which as mentioned in our last earnings call enable us to sell to the U. S. Federal government. I am pleased to say that this certification is paying off. Speaker 200:12:38We booked 7 figures of FedRAMP required revenue in our very first quarter, including a sizable deal with the U. S. Navy. Our new approach to the design and manufacturing of hardware is also making a difference. Last quarter, we announced our partnership with Actel Polytech Incorporated for future hardware. Speaker 200:12:58And in the Q1, we began actively working on our first project together. As a reminder, this relationship will bring our products to market faster and at higher margins. We continue to develop this strategy and today I am delighted to announce a second hardware co development partnership. We have signed an agreement with Wistron NewWeb, commonly known as WNC to work on a set of future hardware projects and we look forward to a great working relationship with them. To recap our latest hardware news, we showed our upcoming megawatt charging system at the recent ACT Fleet Exposition. Speaker 200:13:37Designed for trucking, marine and aviation applications, this is the most powerful charger we will offer, capable of 1.2 megawatts at launch and multi megawatt charging in the medium term future. To give an idea of how incredibly powerful this system is, our LaunchSpec system can power more than 1,000 residential homes through a single connector. This upcoming connector protocol eliminates a key barrier to the electrification of large scale trucking, which in turn has the potential to reduce or eliminate the 400 +1000000 metric tons of greenhouse gases emitted by that segment. As we have said before, what is good for our business is also good for the environment. Our strategic decision to focus on a world class driver experience has delivered a wonderful solution for our newest partnership. Speaker 200:14:32We have established a relationship with Airbnb to increase the availability of EV charging at Airbnb listings across the USA. To accomplish this, we created a novel solution for Airbnb hosts encompassing the ChargePoint Home Flex residential charger installation software and support services. For drivers, this will guarantee a charge where they are staying a critical need for EV drivers on a road trip and one not always accomplished at a hotel. Better yet, the world class experience extends to the Airbnb hosts. We make their adoption of charging as an amenity near seamless. Speaker 200:15:14Once they answer 3 simple questions on our website, they have a quote including installation costs and we can implement charging in as little as 2 weeks as a turnkey solution. We are now exploring compelling use cases for this offering outside of the vacation rental industry, which is important for me to call out as one of those actionable margin rich initiatives currently underway. Operational excellence is our 4th cornerstone and the area in which our results have surpassed our internal expectations. We had a good quarter and are ahead of our plans for cash, gross margin, OpEx and adjusted EBITDA as a result. We remain disciplined factoring OpEx and margin impact into every decision we make. Speaker 200:16:01This requires a lot of restraint that has enabled focus and delivered results. The proof points above outline progress and deliverables under these four cornerstones of our strategy, which we will continue to do as the year progresses. Moving on to our latest non financial metrics of note, this is another area of the business which continually demonstrates scale. In the quarter, we reached 2 amazing milestones. Most significantly, ChargePoint now offers drivers access to more than a 1000000 places to charge worldwide across public, private and roaming ports. Speaker 200:16:42For us, this is a celebratory milestone and equally impressive was the fact that this statistic grew approximately 10% in a single quarter. The other milestone reached in Q1 is that we have now enabled more than 10 1,000,000,000 electric miles for our drivers, which is approximately 3,500,000 cross country trips from San Francisco to New York. Our managed port count has grown to more than 306,000. Of note, the number of DC fast charger ports under management grew more than 14% in Q1 alone for a total surpassing 27,000 fast chargers under management at the end of Q1. These statistics should leave you with this key takeaway. Speaker 200:17:29EV adoption is continuing at an incremental pace and our network is scaling along with it. As our network grows, so do our subscription revenues. I'd like to thank you again for joining us today. To summarize, Q1, the results were positive and we will gain momentum as the year moves on. If you look at our news and announcements so far in Q2, you will see that momentum is clearly building. Speaker 200:17:58Before turning the call over to our CFO, Monty, for the financial review, I would like to once again remind you that when we say we will do something, we fully intend to do it. Hopefully, you agree that Q1 was an early proof point of this. Thank you for your time and ongoing support. Speaker 400:18:18Thanks, Rick. As a reminder, please see our earnings release where we reconcile our non GAAP results to GAAP. Our principal exclusions are stock based compensation, amortization of intangible assets and certain costs related to restructuring and litigation. We continue to report revenue along three lines: network charging systems, subscriptions and other. Network charging systems represents our connected hardware. Speaker 400:18:47Subscriptions include our cloud services connecting that hardware, our Assure warranties and our ChargePoint as a service offering where we bundle our full stack solutions into recurring subscriptions. Other consists of professional services and certain non material revenue streams. Moving on to the results for the quarter, revenue was $107,000,000 above the midpoint of our guidance range of $100,000,000 to $110,000,000 This was 8% lower than the 4th quarter, reflecting the expected seasonal slowdown and 18% lower year on year due to lower hardware revenue. Network charging systems at CAD65 1,000,000 accounted for 61 percent of 1st quarter revenue. This was down 12% sequentially due to the impact of seasonality and down 34% year on year in line with our expectations. Speaker 400:19:44Subscription revenue at $33,000,000 was 31% of total revenue, essentially flat sequentially and up 27% year on year. Other revenue at 8,000,000 dollars was 8% of total revenue, plus sequentially and up 54% year on year. Turning to verticals. We report verticals from a billings perspective, which approximate the revenue split. 1st quarter billings percentages were commercial 63%, fleet 20%, residential 15% and other 3% generally consistent with last quarter. Speaker 400:20:25As Rick mentioned, we continue to see projects pushed out in both commercial and fleet verticals as customers await site readiness and vehicle delivery. Our home products continue to sell very well and in the Q1 a significant portion of our home units shipped were equipped with a NACS connector. From a geographic perspective, North America made up 81% of 1st quarter revenue and Europe was at 19%. In the U. S, we generated our first sales from the nevi program. Speaker 400:20:59Turning to gross margin. Non GAAP gross margin for the Q1 was 24%, up sequentially from 22% in Q4. Gross margin was down 1 percentage point year on year. The sequential improvement was largely due to improved subscription margins as well as a larger mix of subscription revenue within overall revenue, which is typical in a seasonally low Q1 with lower hardware sales. Non GAAP operating expenses for Q1 was CAD 66,000,000 a decrease of 22% from CAD 85,000,000 in Q1 last year and a decrease of 11% from CAD 75,000,000 in Q4, reflecting the full quarter impact of the January restructuring and our continued focus on cost management. Speaker 400:21:49Non GAAP adjusted EBITDA loss for the Q1 was CAD 36,000,000 dollars a significant improvement as compared to a loss of $45,000,000 in the 4th quarter and a loss of $49,000,000 in the Q1 of last year. This improvement was achieved even with a lower revenue base due to gross margin improvement and reduction in operating expenses. Stock based compensation in the Q1 was $22,000,000 down from $25,000,000 in the 4th quarter and down $2,000,000 year on year due to recent restructuring events. Looking at cash and cash equivalents, we ended the quarter with $292,000,000 down from $358,000,000 last quarter. In addition to cash usage to cover adjusted EBITDA loss, cash consumption included a semi annual interest payment on our convertible bond as well as severance charges associated with our January restructuring. Speaker 400:22:49I am pleased to relay that the $30,000,000 of restricted cash as of April 30, 2024 is now unrestricted. This leaves only $400,000 restricted of our $292,000,000 cash balance. As Rick mentioned, inventory balance increased in the quarter as we started to bring up our Southeast Asia based partner. However, our inventory is primarily made up of finished goods and products that we are actively selling. We expect to bring this down in the second half of the year as we sell through the finished goods on hand. Speaker 400:23:25Our deferred revenue continues to grow. This represents payments for future revenue commitments from existing customers and finished the quarter at CAD 235,000,000 up from CAD231,000,000 at the end of Q4. Our $150,000,000 revolving credit facility remains undrawn and we have no debt maturities until 2028. We did not issue any shares via the ATM during the quarter. At the end of the Q1, we had approximately 425,000,000 shares outstanding. Speaker 400:24:01Turning to guidance. For the Q2 of fiscal 2025, we expect revenue to be between $118,000,000 down 25% year on year at the midpoint. As mentioned in the last call, we expect a larger portion of full year revenue to be generated in the second half. This is due to the following: normal seasonality of transactional business visibility into large orders booked across both commercial and fee verticals for the second half as well as signs of overall charging demand recovery driven by factors Rick alluded to earlier. We continue to expect gradual improvement in gross margin as the year progresses as a result of continued cost down efforts for hardware products and improvements in subscription margins due to operating efficiency of the support organization combined with automation initiatives underway. Speaker 400:25:01We expect non GAAP operating expenses to remain relatively flat in the second quarter, but fall further in the second half of the year as we continue to focus on operational efficiency and other cost avoidance measures. We are committed to being adjusted EBITDA positive in Q4 of this year and plan to achieve that through a combination of accelerated top line growth, gross margin improvements as well as operating expense reductions as we progress through the year. We are well capitalized to achieve this goal. In summary, we are pleased with the improvement in our overall financial performance, especially the improvement in adjusted EBITDA loss resulting from improved gross margin and reduced OpEx as well as overall cash management and we will continue to focus on these metrics as the year progresses. With that, I will turn the call back to the operator for questions. Operator00:25:58Thank Your first question comes from the line of James West with Evercore ISI. Please go ahead. Speaker 300:26:20Hey, good afternoon, Rick and Monty. Speaker 200:26:24Hi, James. Speaker 300:26:26Rick, maybe first question for me on the significant number of nevi wins that you've had so far, which should turn into grants and sales here. What's the expected timeline for recognizing those sales? I know there's been some delays in kind of getting the NEVI program underway, which I recognize we kind of all expected in the beginning as its government program and had to go to the States. But how are you thinking about the rollout and the sales hitting your revenue? Speaker 200:26:58We'll see some this year for sure, but we expect the bulk of it to be next year. Speaker 300:27:05Okay, okay. Got it. And then you announced the new or at least a new agreement, a joint development agreement with WNC in your prepared remarks. I know we had the Kimpo Polytech announcement recently as well. Could you maybe unpack kind of the what you're doing there? Speaker 300:27:25What the strategy is? How you're realigning your hardware development? Speaker 200:27:32We have a very robust hardware roadmap and a variety of new products that we're very excited to bring to market and adding more hardware development bandwidth to the overall effort is clearly beneficial to what we're trying to accomplish. So we've added WNC as a second partner in addition to Akbel Polytech to increase that bandwidth. And we have been each focused on certain areas of specialization that will allow us to bring some really exciting and compelling market products to market as we move into the future. Speaker 300:28:08Got it. Thanks Rick. Operator00:28:12Your next question comes from the line of Colin Rusch with Oppenheimer. Please go ahead. Speaker 500:28:18Thanks so much guys. If you look at some of the utilization rates moving higher and the pressure that's building around the overall network. Can you talk about what you're seeing as precursors to incremental orders or incremental capacity build out with your customers in particular geographies? Speaker 200:28:37Yes. Hi, Colin. I think in addition to the increasing utilization pressure, as I mentioned in the prepared remarks, we're also seeing this dislocation, especially in commercial charging between the sale of EVs and the demand for chargers. I think in areas where there's reasonable EV penetration, you're seeing institutions that want people to come to their building putting in chargers now because they know there's a critical mass of EV drivers out there that they need to attract to their business or their institution. So you've got the utilization pressure going up. Speaker 200:29:18You've got this recognition that if I don't have EV charters in my parking lot, see some people I care about aren't going to come to my business, combined is what's starting to show some demand in the commercial market for chargers that may not directly correlate with EV sales. Speaker 500:29:37That's super helpful. And then thinking about inventory levels and what you've just added to the inventory, how should we be thinking about kind of overall run rate on what you're going to be carrying and what this incremental inventory build, what is constituted in there? Is it finished goods? How much is components? How flexible is that inventory? Speaker 500:29:59And now should we see that trend through the balance of the year? Speaker 400:30:03Yes. Hi, Colin. So it's mostly finished goods in the inventory right now. There's a little bit of raw material. There's some material in transit, but majority is finished goods. Speaker 400:30:14And it is made up of products that we're actively selling, all next gen products. We review inventory very, very religiously every quarter. And it's all live inventory actively selling products in there right now. Speaker 500:30:33Okay. I'll follow-up on that offline. Thanks so much guys. Operator00:30:38Your next question comes from the line of Bill Peterson with JPMorgan. Please go ahead. Speaker 600:30:45Yes. Hi. Good afternoon. Thanks for taking the questions. I'm wondering if you've received any incremental inbounds or demand from customers interested in tapping your fast product charger. Speaker 600:30:59So as the superchargers business like Turnvy, obviously a big chunk of the team has let go. Have you seen any like increased demand in let's say, nevi or commercial programs in particular? Speaker 200:31:13Yes. Again, the Tesla changes, exactly what happened there, some of it has been reported on extensively, but I'm not sure how accurate at all is. So some of it's speculation, but from our perspective, there's been some clear benefit as a result of those changes. We've had access to some good talent that has become available, which is good for us. And we've also seen some changes in the market in demand in certain areas apparently as a result of the Tesla changes and we're absolutely capitalizing on those when they come up. Speaker 600:31:54Great. Thanks for that. Obviously, you're expanding your hardware agreements across the board. I'm wondering if you're how would you characterize any sort of subletting for us with your existing inventory? I mean, are you seeing any signs that customers would prefer to wait for any newer hardware from your partners in Asia? Speaker 600:32:10Or I are you offering attractive pricing? How are you planning to get rid of the high cost inventory in your existing sort of product lines ahead of the newer products? Speaker 200:32:21So I didn't catch the entire question clearly, Bill, but I'll do my best based on what I understood. So the level of inventory we have is something we will continue to work down as we move through the course of the year. We've got a lot of focus as we've mentioned multiple times, really is around managing inventory as Monty mentioned. Really is around managing inventory as Monty mentioned. So we've got again, I think a very strong process in place now such that we don't drive excess inventory. Speaker 200:32:53What we're working through is inventory that we have on hand plus inventory we've committed to take from our valuable manufacturing partners. And we expect it to take the rest of the year to work through that and get down to what we would consider a normalized inventory in both our on our balance sheet as well as with our manufacturing partners. Speaker 600:33:17Okay. Thanks. I'll take the rest offline. Thank you. Operator00:33:21Your next question comes from the line of Matt Summerville with D. A. Davidson. Please go Speaker 700:33:27ahead. Thanks. To that last point, the fact that this inventory normalization you're looking at is going to take the better part of this fiscal year. I would imagine there's some sort of margin penalty associated with that. So as I think about next year under a more normalized operational situation in that regard, how much of an uplift should you get from not having to kind of deal with these issues? Speaker 700:33:55And similarly, I'd like just maybe a little more color on how some of these new Asian manufacturing and development relationships are sort of bearing fruit for you guys and when maybe we really start to see more concrete gross profit improvement? Speaker 200:34:14Yes. Your first question was very insightful, Matt. Thanks for that. And there's I don't know if I would call it a penalty on gross margin, but just definitely we're deferring optimal gross margin or optimal product costs. We're working through inventory on some product lines that was built at higher cost basis than we would enjoy if we were building that inventory new today out of one of our Asian factories or even one of our existing factories because we continue to drive costs down on the materials that go into our products in addition to the overall cost of manufacturing them. Speaker 200:34:48So we expect again that inventory to be worked through by the end of the year. And at that point, we'll realize all the benefits of the cost down efforts we've taken both on the materials that go into our products as well as the costs related to manufacturing of those products. Specifically on our Asian manufacturing partners, both now at Bell Polytech as well as WNC are in production for us. And the benefit not only is the cost structure of Southeast Asia where they're both located in manufacturing for us, But almost more importantly is the localized supply chain we can now access in that part of the world. Southeast Asia has been building high technology products for almost 50 years now and the local suppliers there are very capable of building high quality, highly reliable parts at very cost effective prices. Speaker 200:35:42If you look at some of our manufacturing, we've done up to now outside of Asia, many of the parts that go to those factories come from Asia. So not only do we have a richer way to access the Southeast Days and supply chain capabilities, but we're also going to reduce lead time and minimize logistics costs because the parts are going to be much closer to the factories. Speaker 700:36:07Thank you for that. And then just as a follow-up, I think you had mentioned in your prepared remarks you had $10,000,000 or more in revenue that basically pushed to the right due to resource constraints, I'll call that. And I guess I'm wondering if that constraint issue, is that something that is more acute in nature or more chronic? Is that something that's going to get worse before it gets better? If you can maybe just talk through that a little bit. Speaker 200:36:37So it isn't resource constraints on behalf of ChargePoint, Matt. It's resource I don't know if you characterize it as frequent source constraints, but it's construction delays and delivery of other infrastructure equipment like transformers and switch gears to sites that are under construction. That's largely what we see causing deals to move out from quarter to quarter are delays with site readiness and site construction. Speaker 300:37:06Got it. Thanks, sir. Operator00:37:09Your next question comes from the line of Chris Pierce with Needham and Company. Please go ahead. Speaker 800:37:16Hey, good afternoon. What's the right way to think about subscription revenue being flat quarter over quarter after the step up we saw in the Q4? Speaker 400:37:25Yes. The reason for that was in Q4, we had a small adjustment in Assure revenue, typical year end adjustment, which did not reoccur in Q1. So if you normalize for that, you would have seen a gradual improvement in line with normal trends. Speaker 800:37:43Okay, perfect. Thank you for that. And then just following up on the last question, the 8 figures of deals, is the right assumption that they would have hit this quarter and you still hit the midpoint above the midpoint of your top line guidance? Or is that just a general comment and that they've slipped in they weren't necessarily in this quarter? Speaker 200:38:03If they had hit this quarter, we would have been above range. Speaker 800:38:09Were they in the range were they in the original guidance though or that's getting too deep in the weeds? Yes. Speaker 400:38:15So we basically see some kind of deal slippage every quarter, right? So we have a guidance methodology that takes into consideration all of that. So we kind of ensure that we hit the range. So we did build in some kind of padding for that. Speaker 800:38:35Okay, perfect. And then just one follow-up on one other question, one last question. So the right way to think about it is Appel and Wistron aren't building next generation products right now. They're helping you build existing product at lower cost and that's why the inventory that you have is the inventory that you're able to sell through this year in theory without taking any sort of charges against it. That's the right way to think about it? Speaker 200:38:59Yes. Generally speaking, they're building current generation products as we speak. They're also we're also co developing next gen products with them. And in some cases, there's prototype builds underway now for those next gen products with both partners. Speaker 600:39:16Okay. Thank you. Operator00:39:19Your next question comes from the line of Mark Delaney with Goldman Sachs. Please go ahead. Speaker 900:39:26Yes. Good afternoon. Thanks for taking the questions. You mentioned you have some bigger programs you expect to ship for in the second half of this year. Can you give us a sense of how much revenue you expect these larger programs to amount to in terms of the pickup in revenue? Speaker 400:39:41Yes. Generally, as we had mentioned in my prepared remarks, this year, we're going to see a much more normal seasonality like we've seen in prior normal years with majority of our revenue coming in, in the second half. And even as we kind of start emerging from this macro and use slowdown in the first half, we believe that the second half will be even seasonally stronger than past years. We have factored in we're confident of the seasonality coming in because of these large deals that we're seeing in our pipeline, all the verticals that we have, right? And on the fleet side, we're seeing large FedRAMP deals, deals pushed out from the first half into the second half. Speaker 400:40:27E Bus continues to be strong. USPS deals are in there. On the commercial, we're seeing some Navy funded deals coming into the second half and workplace is picking up. On the residential side, our residential product is doing well. We just announced the Airbnb deal. Speaker 400:40:42That will give us some push. So all of this is kind of in the pipeline for the second half. In addition, we have new products like the pantograph that we've announced that's launching in the second half. So we're seeing good amount of pipeline built up for that as well. Speaker 900:40:57Very helpful color. Thanks for that, Mansi. And then my other question was on OpEx, came down to $66,000,000 on a non GAAP basis this quarter. I think you said it could fall further, I believe on a dollar basis in the second half of the year. So I was hoping to better understand where OpEx dollars could go to on an absolute basis in 2H? Speaker 900:41:13Thanks. Yes. Speaker 400:41:15We're not specifically guiding to OpEx in the second half, but I do expect that OpEx will come down. So from the Q1 levels of 66,000,000 dollars I think Q2 will kind of stay flattish as we have some mandatory raises in some regions, etcetera. So that will kind of wash out the cost avoidance initiatives that we will have. But then in the second half, we have specific plans in mind, one being reduction in NRE costs, nonrecurring engineering costs as we transition more and more engineering over to our Asia partners. And in addition to that, we have a lot of different ways planned. Speaker 400:41:56Generally, what we saw in Q1 was we're seeing fiscal discipline across the entire company and this is showing amazing results. So we overachieved our plan in Q1 and so we're really confident that we'll achieve what we have planned for the second half. Speaker 800:42:12Thank you. Operator00:42:15Your next question comes from the line of Steven Fox with Fox Advisors LLC. Please go ahead. Speaker 1000:42:22Hi, good afternoon. Rick, I was wondering if you can go back over the rationale behind the deals being postponed. I think the question we're trying to get at is, whether this is something that we should think of as an ongoing situation even as your sales grow because of where we are in sort of supply chains, worker availability, infrastructure or whether you think it eases or gets worse. Any kind of color on how you approach sort of the construction backdrop relative to your backlog? And then I had a follow-up. Speaker 200:42:59Yes, good question, Stephen. I think as Manci alluded to, we've got a buffer in place where we account for this every quarter and we're not planning for it to go down. We are not aware of any reasons that would allow construction to accelerate holding our assumptions regarding deals that roll over from 1 quarter to the next fairly constant as we move through the year. Speaker 1000:43:29That's helpful commentary. And then just on the beat in the quarter, I mean, outside of the inventories that was already asked about, it seems like you consistently outperformed across the metrics. I don't know what you is there some overarching theme you would attribute that to when you given all the changes you made organizationally, etcetera? Or is it just little singles and doubles here and there? Thanks. Speaker 200:43:57Easy to summarize it up under this big headline kind of operational excellence, which is very easy to say, but it's a lot of work to do that. And we've got 9 different areas that we focus on specifically. And essentially what another way to talk about this is we have the right people talking about those 9 different topics at the right frequency, making sure that we're making all the right decisions and managing our resources extremely efficiently. And again, we're really impressed with the results that our team produced in the Q1. And we know there's more opportunity left to be had. Speaker 200:44:34As Monti alluded to, we expect to see that show up in the OpEx number as we move through into the second half of the year. Speaker 800:44:42Great. That's helpful. Thank you. Operator00:44:47Your next question comes from the line of Chris D'anguinos with RBC Capital Markets. Please go ahead. Speaker 1100:44:55Yes. Good evening and thank you. Speaker 800:44:58I guess maybe to kick Speaker 1100:44:59off here, you highlighted some decent growth in the DC fast charger demand. I'm kind of curious, are you seeing any kind of pivot in what customers are demanding? Is there any changes in, I guess, level 2 versus that DC fast charger product? Speaker 200:45:16No, I don't think we're seeing any demand changes between the AC and DC. I think what we're seeing is new products like the pantograph that Manci mentioned now in our portfolio creating demand that wasn't there for us before on DC for the e bus applications. Speaker 1100:45:36Got it. Okay. And then I may hate to beat this one to death a little bit here, but just kind of going back to the revenue cadence and some of the delays. And I guess, I think you mentioned delays in product availability for, I guess, EV availability for customers and then site prep being ready on time. I guess what kind of gives you confidence that it's going to be there later this year and to each do you have any I guess kind of firm visibility to I guess these sites being ready or the vehicles being delivered? Speaker 200:46:14So again, on the commercial side, we're starting to see this dislocation between vehicle delivery and the desire for our commercial customers to continue to expand or put charters in their parking lot. And we don't see any reason for that trend to discontinue. Another way to put it is, if you go to a local business in an area where there's reasonable EV penetration and not another EV was ever sold in that area. They would still make sure they had enough charters in their parking lot to attract the audience of people in that area they care about that they want to come to that building. So I think that's good news for us. Speaker 200:46:51On the other hand, I think you're seeing some really exciting product offerings either announced or coming this year on the passenger vehicle side. I've seen some really cool vehicles in our parking lot recently that have just come on to the market. So I'm optimistic about that. On the fleet vehicle side, I personally don't have any statistics on forecasted delivery for fleet vehicles. But anecdotally for any of us that were at the ACT Expo in Las Vegas a couple of weeks ago, just the sheer breadth of selection and vehicles that are in production and available for fleets was very impressive. Speaker 200:47:29So it's based on that anecdotal observation having personally been an act, I think it looks like that the fleet vehicles are coming. Speaker 800:47:39Got it. Thank you. Operator00:47:43Your next question comes from the line of Craig Irwin with Roth MKM. Please go Speaker 1200:47:49ahead. Good evening and thanks for taking my questions. So Rick, several times on this call you've expressed confidence in the rebound in revenue, the rebound in outlook for the second half. And I commend the focus on achieving positive EBITDA before the end of the year. But when we look at your guidance for the July quarter, the 2nd fiscal quarter, 108 to 118, at the midpoint, you're down 25% year over year, which is a deterioration from 18% contraction in the January quarter sorry, the April quarter. Speaker 1200:48:26Can you maybe reconcile for us this modest deterioration as far as what you're giving us for an outlook versus what you expect to come together in the back end of the year. Is there a small piece that's maybe moving around on some of this political uncertainty or some of the customers recalibrating with Tesla exiting the market? Any color there would be helpful. Speaker 400:48:50Yes. I can take that, Craig. So in terms of guidance for Q2, we have been prudent in our guidance because the macro overhang still exists. In Q2, while we're seeing signs of the environment improving in our pipeline build, the RFP volume and RFP success rate internally within the business. It does give us confidence for the second half. Speaker 400:49:15But in Q2, we're still seeing some of the overhang until we're doing the right thing by being prudent in the guidance. Speaker 1200:49:23Okay, excellent. And then my follow-up question is regarding fleet specifically. So can you maybe give us color on whether or not utility work and site preparation is important and essential for you to recognize revenue if we see some of these very large fleet customers move forward with expanding installations towards the end of the year. A number of them have used ChargePoint in the past. Will this potentially be a gating factor for you? Speaker 300:49:58I don't Speaker 200:49:58know if I'd consider it a gating factor. It is a factor that dictates the timing of deployment and therefore revenue. There's no question that fleet customers that are undergoing significant construction try and time the delivery of the charging gear with the completion of the site construction work. So we are our revenue and our shipping is dictated by that to a certain extent. So that's the way it is in this industry and we work with that and we make our we build our forecasts on that factual information. Speaker 1200:50:34Thank you for that. Well, congratulations on the progress with the cost reductions. Speaker 200:50:40Thanks, Craig. Operator00:50:43That concludes our question and answer session. And with that, that does conclude today's conference call. Thank you for your participation and you may now disconnect.Read morePowered by