EVgo - Earnings Call - Q1 2025

Executive Summary

• Record Q1 revenue of $75.3M (+36% YoY), charging network revenue $47.1M (+49% YoY), and network throughput 83 GWh (+60% YoY), continuing 13 straight quarters of double-digit charging revenue growth.
• Charging network gross margin was 37.1% (down 370 bps YoY due to prior-year OEM credit breakage; excluding breakage, +130 bps YoY) and declined sequentially on higher maintenance and property taxes; Adjusted EBITDA improved to $(5.9)M from $(7.2)M YoY.
• 2025 guidance affirmed: revenue $340–$380M and Adjusted EBITDA $(5)M–$10M; stall build outlook unchanged (1,200–1,400 stalls; ~75% of public stalls in 2H, ~50% in Q4).
• Management flagged minimal tariff impact (~$4–$5M FY25 CapEx hit) to be more than offset by ~$10M CapEx efficiencies; next-gen Delta co-development targeting ~30% reduction in gross CapEx per store beginning 2H 2026.
• S&P Global consensus for Q1 2025 was unavailable; comparison to Street estimates could not be made (see Estimates Context) [functions.GetEstimates].

What Went Well and What Went Wrong

What Went Well

• “EVgo once again achieved a record level of revenues, starting 2025 off on a strong foundation,” with 83 GWh throughput (+60% YoY) and charging network revenue +49% YoY.
• Operational scaling: added >180 new stalls; ended Q1 with 4,240 stalls (+32% YoY), average daily throughput per stall +36% YoY to 266 kWh/day; Autocharge+ reached 27% of sessions.
• Strategic progress: DOE loan advances ($75M Jan, $19M Apr), NACS pilot live in Feb, and Delta joint development agreement to lower per-store CapEx, with prototype expected in Q2 2025.

What Went Wrong

• Charging network gross margin down YoY and sequentially: YoY decline due to non-recurring $2.5M OEM credit breakage in prior-year quarter; sequentially pressured by higher maintenance and property taxes.
• Network OEM revenue fell 63% YoY; G&A rose 13% YoY; interest income fell 25% YoY, contributing to continued GAAP net loss.
• Net loss attributable to Class A common stockholders widened to $(11.4)M (vs $(9.8)M YoY), and Adjusted G&A rose to $31.3M (+28% YoY) as the company invests in growth.

Transcript

Operator (participant)

Hello, and welcome to the EVgo Inc Q1 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a Q&A session, and if you would like to ask a question during this time, please press star one on your telephone keypad. I would now like to turn the conference over to Heather Davis, Vice President of Investor Relations. You may begin.

Heather Davis (VP of Investor Relations)

Good morning. This is the EVgo first quarter 2025 earnings call. My name is Heather Davis, and I'm the Vice President of Investor Relations at EVgo. Joining me on today's call are Badar Khan, EVgo's Chief Executive Officer, and Stephanie Lee, Executive Vice President, Accounting and Finance. Our CFO, Paul Dobson, is out this week due to a loss in the family a few days ago. Today, we will be discussing EVgo's first quarter 2025 financial results, followed by a Q&A session. Today's call is being webcast and can be accessed on the investor section of our website at investors.evgo.com. The call will be archived and available there, along with the company's earnings release and investor presentation after the conclusion of this call. During the call, management will be making forward-looking statements that are subject to risks and uncertainties, including expectations about future performance.

Factors that could cause actual results to differ materially from our expectations are detailed in our SEC filings, including the risk factors section of our most recent annual report on Form 10-K and quarterly reports on Form 10-Q. The company's SEC filings are available on the investor section of our website. These forward-looking statements apply as of today, and we undertake no obligation to update these statements after the call. Also, please note that we will be referring to certain non-GAAP financial measures on this call. Information about these non-GAAP measures, including a reconciliation to the corresponding GAAP measures, can be found in the earnings materials available on the investor section of our website. With that, I'll turn the call over to Badar Khan, EVgo's CEO.

Badar Khan (CEO)

EVgo had yet another record quarter of strong results. Customer consumption on our network continues to rise, with average daily throughput per public stall rising by 36% versus the same quarter last year and up more than fivefold in three years. The combination of higher throughput per stall and more stalls resulted in an overall public network throughput growth of 60% versus last year, with Q1 representing the 13th consecutive quarter of double-digit year-over-year growth in charging revenues, which is every single quarter since we've been a public company. Total revenue grew 36% year-over-year at a near tenfold growth in three years. We added over 180 new operational stalls this quarter, including eXtend stalls, and now have over 4,200 operational stalls. Finally, we began the year with a strong cash balance and prospects. We ended the quarter with $171 million in cash, cash equivalents, and restricted cash.

At the start of April, we received the next quarterly advance from the DOE loan, as expected. As you all know, in December 2024, after an 18-month process, we closed at a $1.25 billion loan guarantee with the Department of Energy Loan Programs Office that secures financing for our trajectory past adjusted EBITDA break-even this year, leveraged free cash flow break-even next year, and more than triples our installed base over the next five years throughout the U.S. This puts us in a particularly strong competitive position within the EV fast-charging landscape. Looking at the macro environment, the impact of tariffs on EVgo, both directly and indirectly, is expected to be relatively minimal. That's because only approximately 25% of the total CapEx cost per stall is subject to tariffs, with the remainder being domestically sourced equipment and raw materials and construction costs.

Our fiscal 2025 net CapEx estimate includes CapEx for 2025 vintage stalls, as well as spend incurred in 2025 for 2026 vintage stalls. In fiscal 2025, we expect to incur around $45 million-$50 million on imported chargers. However, we already have either in inventory or on shipping containers just under half of that spend for imported equipment. Therefore, we expect an impact of around $4 million-$5 million, depending on what the final tariff rate might be for these imports, what we negotiate with our suppliers, and whether we are able to expand our existing U.S.-sourced production. In addition, we expect to deliver $10 million in CapEx efficiencies this year that more than offset the estimated impact of tariffs in 2025. Because we are an owner-operator and not an equipment seller, none of this is expected to impact adjusted EBITDA for our charging business.

This past quarter saw particularly strong growth in non-Tesla EV sales, which grew over 35% compared to Q1 last year. Chevy Equinox EV, Honda Prologue, and Hyundai Ioniq 5 are among some of the best-selling non-Tesla models. It's especially encouraging to see this as the MSRP for the Equinox starts at around $35,000. Importantly, our business is increasingly not reliant on new EV sales in any one year and is instead reliant on the overall number of EVs on the road. We estimate less than 10% of 2025 revenue to come from new EVs purchased this year, and that percentage will shrink going forward as the EV car park grows. In addition, EVs sold in the U.S. appear to have more domestic content on average versus ICE vehicles. Therefore, tariffs may have a bigger impact on ICE vehicles than EVs in the U.S.

According to the DOE, the nationwide growth of DC fast charging stations has, in fact, been flat for the past seven quarters, with Q1 actually showing a 16% decline from the prior quarter. In a higher tariff environment, we expect the supply of new fast charging will continue to fall. That is because roughly half of new fast chargers deployed are sold to site hosts by companies like ChargePoint, which will likely see slower growth as site hosts pause or reconsider what they may view as discretionary investments outside of their core business, especially if these companies were relying on federal incentives that may also be on hold. 7% of new fast chargers that are funded by automotive OEMs other than Tesla are also likely to see slower growth as OEMs allocate capital to other priorities.

Tesla's share of new fast charging has declined from around 70% in 2022 to less than 20% in the most recent quarter. Unlike other OEMs, it's unclear whether Tesla remains committed to the growth of fast charging given their other priorities. Oil and gas companies funding DCFC chargers made up only 1% of new chargers this past quarter, according to the DOE, and have already announced changes to their capital allocation priorities. That leaves 14% of new chargers funded by a large number of small private companies that we expect will struggle to attract financing in this environment, especially because of their small scale. Unlike almost every other fast charging owner and operator, EVgo is singularly focused on fast charging and has the financing in place, allowing us to continue to grow.

As a result, demand for fast charging, represented by the growth in EV VIO, far exceeds the supply of fast charging stations nationwide. This supply-demand imbalance has been one of the factors driving the fivefold growth in EVgo's throughput per public stall over the past three years and will continue to drive growth in throughput per stall for the foreseeable future. S&P Global's most recent base case forecast for March this year that takes into account the new administration's policies on electric vehicles suggests 31% of new car sales being fully electric by 2030, slightly above where China already is today. The downside forecast is 21% of new car sales, below where China is today, translating to between 19 and 26 million EVs on the road by 2030. This is half of the target established by the Biden administration of 50% of new car sales by 2030.

S&P Global's forecast for the supply of DCFC grows to 135,000 stalls by 2030, from around 50,000 at the end of 2024. In order to maintain the current ratio of EV to DCFC, the industry would need to deploy 40,000 fast chargers a year, which is over three times what was built in 2024. Given that we've now had seven flat to declining quarters of growth in DCFC supply, a flat growth scenario of no faster growth than today may even be too optimistic in a higher tariff environment. The result is a growing ratio of EV VIO to DCFC, which has driven the growth in EVgo throughput historically, and a significantly higher ratio in both S&P's base and downside forecasts, which we expect will drive ongoing growth in EVgo throughput and utilization per stall, in addition to growth due to network expansion for the foreseeable future.

In a higher tariff environment, we may see impacts to both the numerator and denominator in this ratio, leaving the overall supply-demand picture potentially even more attractive for EVgo than without the impact of tariffs. Let's now turn to progress on our four key priorities: improving our customer experience, operating in CapEx efficiencies, capturing and retaining high-value customers, and securing additional complementary non-dilutive financing to accelerate growth. As always, improving our customer experience remains our number one priority, and our strong momentum from last year has continued this quarter. Customers want a charger to be available when they pull up to an EVgo station, and we are deploying larger sites where our standard configuration is now six to eight stalls per site. At the end of the first quarter, 21% of our sites had six stalls or more. We continue to deploy ultra-fast, high-power chargers.

The number of stalls served by a 350 kW charger is now 52%, up from 38% a year ago. AutoCharge Plus, our seamless plug-and-charge capability, continued to gain significant traction in Q1 with auto enrollments from OEM partners. AutoCharge Plus accounted for 27% of sessions initiated. Our key customer success metric, or one-and-done, increased four percentage points this quarter versus last year, with 95% of sessions resulting in a successful charge on the first try. In summary, another great quarter of achievement in improving our customer experience. We have also made excellent progress on our efficiency priorities. Most notably, we took the MoU with Delta Electronics we signed last October and converted it into a signed joint development agreement to co-develop the next generation of charging architecture. EVgo and Delta are making meaningful progress on this initiative that is expected to lower our gross CapEx per stall by 30%.

We anticipate production of these stalls to begin in the second half of 2026, and we plan to have a prototype by the second quarter of this year. We continue to drive operational efficiencies in our business, with call center costs per call declining 37% in Q1 versus last year. Our 2025 vintage CapEx per stall is expected to be roughly $135,000, which is an 8% reduction from 2024 vintage stalls, including the impact of tariffs. EVgo's operations team has been diligently working to lower CapEx, and we're delivering savings from lower contractor construction pricing, material sourcing, and increased use of prefabricated skids. We expect further improvements in G&A as a percentage of revenue for 2025 while investing in the growth of our business. We also continue to make great progress on our growth priority of capturing and retaining high-value customers.

55% of EVgo's throughput came from rideshare OEM charging credit and subscription accounts in Q1. This provides EVgo with a relatively predictable baseload level of demand on our network. In order to drive overall utilization up while mitigating the impact of congestion, thanks to the investments we have made in our customer marketing platform and dynamic pricing, we are now averaging double-digit utilization in the overnight hours, effectively opening up capacity for more drivers during the peak hours. We expect the next major update to our dynamic pricing roadmaps in the fourth quarter of this year. We launched native NACS connectors at our first site in February, and the pilot of the technology validation is going well. We anticipate adding more NACS connectors to sites over the course of 2025.

Later this year, we plan to launch the first of 400 new flagship stalls in partnership with GM, with the goal of delivering an elevated customer experience. As a reminder, these sites will feature up to 20 stalls and come with ultra-fast 350 kW chargers, canopies, ample lighting, pull-through stations, and security cameras. Like all EVgo sites, they will be located near a diverse set of amenities that customers can take advantage of while charging. Finally, we expect to expand the number of dedicated stalls serving autonomous vehicle partners, which could represent a very attractive source of potential growth for EVgo, given we estimate we have a 20% share of operational sites serving the segment today. As for financing the growth of the business, we have now received both the first and second quarterly advances on our $1.25 billion loan guarantee with the DOE LPO.

This loan ensures we are fully funded to add at least 7,500 stalls, more than tripling our installed base over the next five years. Looking ahead to the rest of the year, we expect a complete transfer of our 2024 vintage 30C income tax credits. Over the course of this year, we expect around 30% of our 2025 vintage CapEx to be offset from state, local, and federal grants, utility incentives, OEM payments, and 30C. Federal incentives, in the form of the technology-neutral 30C alternative fuels credit and NEVI, represent approximately 10% of our 2025 vintage CapEx. As we've said before, we are not particularly reliant on federal incentives, and our next generation architecture program is targeting at least a 30% reduction in gross CapEx per stall, significantly more than the value of these federal incentives.

Finally, given the very strong cash flows from our operating assets, we continue to receive inbound interest and evaluate additional complementary non-dilutive financing opportunities that would help fund the growth of any charging stations not included in the DOE loan funding to accelerate our growth and to provide diversity in our funding sources. Stephanie Lee will now cover our financial performance for Q1 together with our outlook for 2025.

Stephanie Lee (EVP of Accounting and Finance)

Thank you, Badar. Over the last three years, we have grown our operational stall base by two and a half times, while our revenues have grown over 12 times. Increasing our scale and maintaining our focus on costs allows us to deliver, improving bottom-line performance. We continue to expect to achieve our target of adjusted EBITDA break-even in 2025.

Our public network throughput per stall has grown over three times in the last two years, significantly outpacing our charging stall growth. This accelerated performance is driven by multiple factors we've previously discussed, namely EV vehicle miles traveled parity with ICE, significant growth in rideshare, increased multifamily dwellers among EV drivers, increasing vehicle charge rates, and larger, less efficient EVs coming to market. Throughput per public stall was 266 kWh per stall per day in Q1, compared to 196 a year ago, and roughly flat sequentially, which reflects the seasonal shift from Q4 to Q1, as we saw last year. In the first quarter, total public network utilization increased to 24%, up from 19% a year ago. 67% of our public stalls had utilization greater than 15%, 54% of our public stalls had utilization greater than 20%, and 32% of our public stalls had utilization greater than 30%.

Each of these utilization categories has grown significantly over the last two years, as the entire utilization curve is shifting to the right. Total throughput on the public network during the first quarter was 83 GWh, a 60% increase compared to last year. Revenue for Q1 was $75 million, which represents a 36% year-over-year increase. This growth was primarily driven by charging network and extend revenues. Total charging network revenues of $47.1 million grew from $31.6 million, exhibiting a 49% year-over-year increase. Extend revenues of $23.5 million increased from $19.2 million in the prior year, delivering growth of 23%. Charging network growth margin in the first quarter was 37.1%, down 370 basis points from the prior year. The prior year quarter included $2.5 million of breakage revenue from one of our OEM charging credit programs, which is winding down, and similar levels of breakage were therefore not expected to recur.

Excluding the impact of breakage revenue, our charging network growth margin would have grown 130 basis points year-over-year. Compared to the fourth quarter of 2024, charging network growth margin declined primarily due to higher maintenance costs incurred to improve reliability of our charging experience and higher property taxes, which typically increased on January 1 of each year. Our eXtend revenue for the first quarter was up from the prior year due to more construction projects in process or completed and the recognition of certain construction change order costs that were incurred in a prior year. Adjusted gross profit was $25.4 million in the first quarter of 2025, up from $17.3 million in the first quarter of 2024. Adjusted gross margin was 33.7% in Q1, an increase of 240 basis points compared to last year.

Adjusted G&A as a percentage of revenue also improved from 44.4% in the first quarter of 2024 to 41.6% in Q1 of this year, demonstrating the operating leverage effect. Adjusted EBITDA was negative $5.9 million in the first quarter of 2025, a $1.3 million improvement versus negative $7.2 million in the first quarter of 2024. Now, turning to our 2025 guidance, EVgo continues our top-line growth and path to profitability in 2025. Our stall build outlook for the year remains the same, with 1,200-1,400 new stalls comprised of 750-815 public network stalls, 50-85 dedicated network stalls, and 450-550 EVgo extend stalls. We continue to expect total revenues in the range of $340 million-$380 million. As a reminder, we estimate only 10% of our total 2025 revenues are tied to new EV sales.

We continue to expect charging network revenue to be two-thirds of full-year revenue. We anticipate sequential quarterly growth in our charging network revenues as we continue to expect quarter-over-quarter and year-over-year throughput growth. Similar to last year, we expect to see higher summer electricity costs impacting Q3 charging network growth margins. We continue to expect full-year eXtend revenue to be broadly flat to last year, with slightly lower revenues in the second half of 2025. We expect growth in full-year ancillary revenue, with most of that growth in Q4 driven by the dedicated fleet business. We expect adjusted G&A to increase modestly throughout 2025 as we continue to make investments in areas such as our next-generation charging infrastructure. We continue to expect improvements in charging network growth margin and adjusted G&A as a percentage of revenue, driving bottom-line adjusted EBITDA improvements.

We therefore continue to target adjusted EBITDA break-even in 2025, with a range of negative $5 million to positive $10 million. We continue to expect fiscal CapEx net of offsets to be in the range of $160 million-$180 million. We are ramping up our mobilization with approximately 75% of our 2025 vintage public network stalls expected to operationalize in the second half of 2025. Q4 is expected to account for approximately 50% of total 2025 public network stalls. Operator, we can now open the call for Q&A.

Operator (participant)

Thank you. If you would like to ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again. Please ensure you are not on speakerphone and that your phone is not on mute when called upon. Thank you. Your first question comes from Andres Sheppard with Cantor Fitzgerald.

Your line is open.

Badar Khan (CEO)

Morning, Andres.

Andres Sheppard (Director and Senior Equity Analyst)

Hi, everyone. Good morning. Congratulations on another great quarter, and thank you so much for taking our questions. Maybe just to start, you touched on this briefly in your prepared remarks, hoping for maybe a bit more color. I'm wondering if you could maybe just give us a bit more cadence in terms of guidance for the rest of the year, particularly around cost of energy, ASPs. You mentioned Q3, I think, will be the weakest. Basically, ASPs, gross margin, and how we should think about the ramp-up of the DOE loan stalls throughout the rest of the year. Thank you.

Badar Khan (CEO)

Andres, yeah. Yeah, we provided guidance. It hasn't changed since the last quarter. On the ramp-up of the loan, we provided a stall build schedule on the last quarterly call, and that remains the same.

That's 750-850 public network stalls for the full year, together with about 50-85 dedicated stalls, 450-550 stalls through our eXtend program. That hasn't changed. Also hasn't changed, we expect about 75% of the public stalls to be in the second half of the year, about 50% in Q4. You can kind of work out Q2, given we've got Q1. In terms of the rest of the year, Q3 is typically the quarter, as we saw last year, where we've got higher energy costs. That'll really be the same shape for this year. In terms of average selling price, I'd expect us to see prices where they are today, maybe slightly expanding. I mean, Heather, Stephanie, any other comments in terms of guidance?

Stephanie Lee (EVP of Accounting and Finance)

No, I think that covers it.

Andres Sheppard (Director and Senior Equity Analyst)

Okay. Got it. Okay. That's super helpful. I appreciate all that color.

Maybe just a bit of an odd question, but as we are seeing an acceleration in autonomous vehicles and self-driving technology, can you maybe remind us what our EVgo strategy is to try to capture some of this market and how you might address autonomous vehicles charging in the future? Thank you.

Badar Khan (CEO)

Yeah. Look, as we said last quarter, we broke out the number of stalls that are dedicated stalls serving the kind of autonomous vehicle segment. That is separated out in our stall count from last quarter. We more than doubled in 2024 the number of stalls that we currently already have in place serving that segment. We estimate there is not great data on this, but we estimate we have got about a 20% share, so a pretty good share of dedicated stalls serving the segment. We are quite excited by it.

These stalls have a different cash flow profile. They're contracted cash flows versus our public stalls, which rely on charging revenue, of course. We're quite excited by it. We do think it could be a source of interesting upside for the business, given the regulations around the space seems to be a little bit easier than where we had them in the past.

Andres Sheppard (Director and Senior Equity Analyst)

Wonderful. Thank you so much. Really appreciate it. Congratulations on the quarter again. We'll pass it on. Thanks.

Operator (participant)

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

Chris Dendrinos (VP)

Yeah. Good morning, and thanks for taking the question.

Badar Khan (CEO)

Absolutely.

Chris Dendrinos (VP)

I guess maybe on the financing side of things, and it was great to see that you all got that second advance from the DOE. I guess maybe on the private side, and you mentioned you're exploring some funding options.

Can you provide an update on timing around that, and maybe what specifically are you all kind of looking at as far as options go? Thanks.

Badar Khan (CEO)

Yeah. I mean, just on the first point, we are obviously very happy with where we are in financing. We expect quarterly advances in line with the agreement that we signed with the DOE in December. This second quarter advance was in line with our ask and our plans. In terms of additional financing, we do continue to get just these assets generate strong cash flows. We continue to get quite a lot of interest from others who are looking to finance further, accelerate the growth of the business. That is really where the conversation is.

Are there stalls that are not eligible to be funded by DOE, for instance, the AV space, but potentially others? It also just makes good business sense to diversify your sources of funding. In terms of timing, we are in the dialogue today with folks. If we find something that is attractive for ourselves and counterparties, then we will obviously look to execute. I expect that might take place at some point during the course of this year.

Chris Dendrinos (VP)

Got it. I guess maybe just to follow up on that point around it being attractive and the ability to accelerate, are you indicating that you would look to potentially accelerate activity if you find an attractive arm of financing? Is that correct? Thanks.

Badar Khan (CEO)

Yeah.

I mean, over the course of the five years, the schedule that we've laid out in the last two calls showed what the stall schedule, build schedule would look like under DOE loan financing. What we're looking at is both from a balance sheet and operational perspective, what would it take to increase that level of stall build-out? What we've got today gets us to about 11,000 stalls in about five years' time. We provided those economics in the last two calls. What we're asking ourselves is, what would it take to accelerate that schedule build-out over the next five years?

Chris Dendrinos (VP)

Got it. Thank you.

Badar Khan (CEO)

Yep.

Operator (participant)

The next question comes from Chris McNally with Evercore ISI. Your line is open.

Chris McNally (Senior Managing Director)

Thanks so much, team, and thanks for taking the call. I appreciate all of the 2030 comments.

I think we all see the huge growth in the car market will eventually come. I think our question is around maybe your views on the potential changes of revoking IRA and/or the EV EPA mandates which may come. Sort of our thought is, what if we get sort of that worst-case scenario in the upcoming tax bill in the second half where incentives are removed and 2030 targets are removed? My question is, how does EVgo potentially change their rollout strategy geographically within the U.S.? Places like California become even more valuable given EV density, whereas maybe expansion states, there's a change in the math as a result of regulation changes. Big picture question, but would appreciate your thoughts.

Badar Khan (CEO)

Yeah, Chris. I mean, I think taking a step back as a reminder, our business is not we're not selling cars. We're selling kilowatt-hours.

What drives our business is both the demand for kilowatt-hours, which is represented by the growth in VIO, electric vehicle VIO, as well as the supply of industry-wide DC fast chargers. That is the sort of demand-supply that, in fact, impacts the sale of kilowatt-hours. What we see as we play out on that slide is, even in the most conservative forecasts, which takes into account sort of a shift in federal policies with respect to sale of electric vehicles, we would expect to see the ratio of cars to nationwide industry-wide fast chargers to still almost double. That supply-demand picture remains very attractive for us, given that it has only grown by about a third in the last three years. Yet in that same time period, our throughput per stall has grown fivefold.

I think that that is how we think about the sort of situation. This is a pretty resilient, the owner-operator of fast charging business model is actually quite a resilient business model. With respect to your specific questions, sure, if we find that States continue to offer incentives for electric vehicles and other states are not offering such attractive incentives, then we would, of course, expect to see more EV sales in individual states. Our network plan that we update continuously takes into account all of these sorts of forecasts, and we adjust. At any one point in time, we are looking at a network plan that goes out two or three years that gives us quite a lot of optionality. We have got about 30,000 stalls that we have already identified across the U.S. that meet our return expectations and the kind of returns that we are demonstrating today.

We feel we've got tons of flexibility and optionality to be able to shift to wherever demand is.

Chris McNally (Senior Managing Director)

That's excellent. Do you have a sense in those medium-term geographic plans? I mean, if we're talking about EV VIO, to your point, a range of 20-26 in your forecast, sort of 7-10% penetration of the car park, where do you see sort of the most attractive markets, meaning where the return is the highest? When you think about California, right, where it's sort of approaching Europe-like penetration ratios. Just any rules of thumb that help us when we think about where a market becomes the most attractive once it hits a penetration level of the car park of X.

Badar Khan (CEO)

Yeah.

I mean, look, for us, when we think about return, we're obviously thinking about the productivity of the stalls, so the kilowatt-hours, the throughput per stall per day. But we're also taking into account the cost of the stalls, so the CapEx, the cost of construction might vary across the U.S. the availability of incentives. I will tell you that overall utilization, as we show today, is 24%. We actually have higher utilization outside California. We've got more throughput in aggregate outside California. Some of our fastest and top states today are places like Texas, Florida, Arizona, Michigan. None of these states are in the Clean Cars II program that California has adopted. I expect to see the growth in those states continue as they have done in the last couple of years.

Chris McNally (Senior Managing Director)

That's really great, that helpful info on the sort of the micro markets, the examples you gave. Thank you so much, team.

Badar Khan (CEO)

Absolutely.

Operator (participant)

The next question comes from Bill Peterson with JPMorgan. Your line is open.

Badar Khan (CEO)

Good morning, Bill.

Bill Peterson (Equity Research Analyst)

Yeah. Hi. Good morning. Thanks for good morning. Thanks for taking the questions and nice job on the quarterly execution. It's nice to see the reiteration of the financial and other factors. You sound on the loan. It seems like all systems are go, but just to remove any doubt, are there, if any, remaining items that you and the team are working through? I guess just want to try to understand how the current engagements are. Are they constructive? Or are they still probing around the edges or doing further investigations?

We understand that a lot of people at the LPO have left or are being forced out or leaving at their own will, whatever. Just what's your current level of engagements with the LPO?

Badar Khan (CEO)

Yeah. I mean, it's built a very productive engagement with the LPO team. I really can't comment on their overall staffing levels, other than to say that the folks that we're working with are the same folks that we're working with over the last several months. Our quarterly advance, both the first and second, and the monthly, we have monthly draws and reimbursements in line with our agreements. They're all progressing in the way that we expected. You could call this sort of business-as-usual activity. We're several months into this at this point, and we're, I think, pleased with how it's going.

Bill Peterson (Equity Research Analyst)

That's great. Just wanted to make sure.

Then I had some clarifying questions on the tariffs, and thanks for the color on that. What are the assumptions around the tariff rate to get to this $4 million-$5 million? I guess think of 32% on Taiwan as an example. Is that the right way? I guess on this $10 million in efficiencies, can you provide any additional color on that? It sounds like you're getting that anyway, regardless of where the tariff environment still stands. Maybe looking into next year, it sounds like you reiterated this sort of 30% CapEx reduction with the program you have with Delta, but is that reduction still assuming the same tariff environment we have today? If so, how do you get there?

Badar Khan (CEO)

Yeah. Bill, the $4 million-$5 million, that's a fiscal year, not vintage year.

That is the impact on the calendar year capital spend that we incur in 2025. That is based off about $45 million-$50 million of imports of imported equipment, where we have already got about half of that either already here in the States or on shipping containers, so there is no tariff on that. We expect about a 10% tariff on a quarter of what is not already here and about a 32% tariff on the other quarter. That is really how you get to the $4 million-$5 million. In terms of the efficiencies, yeah, these efficiencies, we had a, as we said last quarter, and we reported a 9% improvement reduction in our vintage 2024 CapEx per stall versus what we were expecting. We were expecting about $160,000. We took about 9% off that in 2024. This year, we are expecting about 8% versus where we ended 2024.

That is just our operations team just going about business: construction, pricing, material sourcing, prefab skids. We expected it would be about 40% of our mix this year. It is going to be a little higher. The cost per skid is going to be a little lower. It is just business-as-usual activity. For fiscal year 2026, we have not provided guidance specifically for vintage fiscal year 2026 CapEx, but you would expect it to include the benefits from all the savings that we have captured so far. In addition, by the second half of 2026, we will start to roll out our new charging architecture through the development with Delta Electronics. That is a 30% improvement on that 160 that we expected to begin 2024. This is just business-as-usual.

We think that this is a real source of competitive advantage for EVgo versus the dozens of other fast charging companies that you're all aware of, where we've got scale, we're able to partner with a global leader, and really drive down efficiencies in CapEx. So we're really pleased with where we are.

Bill Peterson (Equity Research Analyst)

Thanks for all the details, Badar. It's terrific to hear that and congrats on the quarter.

Badar Khan (CEO)

Thanks so much.

Operator (participant)

The next question comes from Chris Pierce with Needham & Company. Your line is open.

Badar Khan (CEO)

Hey, Chris.

Chris Pierce (Analyst)

Good morning, everyone.

Badar Khan (CEO)

Morning.

Chris Pierce (Analyst)

Can you just walk me through when I think about dynamic pricing and you hit on it on the call about driving utilization in the overnight hours, I think about cost savings to the driver. But you guys grew ASP per watt, mid-single digits year over year.

I just want to get a sense of pricing power on the network you have, or how are you able to how those two sort of balance out?

Badar Khan (CEO)

Yeah. Look, with dynamic pricing, what we're doing is we're looking to maximize margin. In some places, we may see ourselves increase price. In other places, we may see ourselves reduce price, but with the goal of maximizing margin. I would say that, again, this is another one of our sources of real competitive advantage versus these dozens of other smaller companies in the fast charging space or companies that just aren't focused on utilization for whatever reason.

We are, through both the investments we have made in our marketing, our understanding of customers, our reach-out to customers, the dynamic pricing, which is effectively pricing signals, we are shifting who is charging at what time of the day, where we are trying to open up hours of the day that might be peak hours of the day, where we may have price sort of inelastic customers. That really is serving us very well. We expect the next round of the algorithms in this dynamic pricing to go live in the fourth quarter, where I am looking for the next level of sophistication here. This is not, we are not talking about something being reinvented here. We are taking kind of concepts that have been very successfully executed in other parts of the economy into the space.

Chris Pierce (Analyst)

Okay.

Is it safe to say you haven't seen anything, any demand signals or anything that would cause you to back off the level of pricing power you think you have on the network?

Badar Khan (CEO)

Chris, I didn't fully capture the question, but I think the answer is if we've seen anything that would cause us to back off, the answer is no.

Chris Pierce (Analyst)

Okay. Lastly, housekeeping, can you remind me on the typical seasonality? I know this is sort of a young business, and you've had the growth you've had, so it's sort of hard to pick out the seasonality, but network throughput down modestly sequentially. How should we think about seasonality the rest of the year? When you layer on stall growth too, how should we think about the cadence of network throughput?

Badar Khan (CEO)

Yeah.

I mean, look, network throughput was actually kind of flat, to be honest. We had some rounding. Last quarter, we rounded up. This quarter, we are rounding down. Network throughput is kind of broadly flat, which is pretty much where it was almost exactly last year between Q4 and Q1. We expected that, certainly. We would expect to see network throughput obviously grow in Q2 and Q3 and Q4, the same shape we saw last year and sequentially from Q4 to Q1. That really aligns with sort of VMT, vehicle miles traveled for EVs across the U.S. I mean, that is really how we think about the profile.

Chris Pierce (Analyst)

Okay. Thank you.

Operator (participant)

Again, ladies and gentlemen, if you have a question, it is star one on your telephone keypad. Your next question comes from Craig Irwin with Roth Capital Partner. Your line is open.

Badar Khan (CEO)

Morning, Craig.

Craig Irwin (Director and Senior Research Analyst)

Good morning. Morning, Badar. Morning, everyone. Thanks for taking my questions. I wanted to ask about the progress with the Tesla connectors, the NACS connectors you mentioned earlier in your prepared remarks. Can you maybe frame out for us where you're at with this? Are you really just in testing, or will we potentially see dozens or more stations retrofit over the course of the year? Is it fair for us to start asking about the new customers added that are Tesla customers? I know you had another strong quarter with 119,000 new customers, but is the Tesla fleet starting to layer in and help you on the demand side?

Badar Khan (CEO)

Yeah.

Craig, so I mean, clearly, with such a high percentage of well over half or more of overall EV VIO being Tesla drivers and the fact that our charging stations are faster at 350 kW and they tend to be closer to where all drivers, including Tesla drivers, live, work, and run errands versus highway stations, we are very attracted to capturing the segment. We need to do two things. We need to make sure that the system, they work. What we've been doing this past quarter is going through that technology validation. That's both in terms of the connection, but also the speed. At 350 kW, we need to make sure we've got the right cables that can accommodate a higher speed than a Tesla supercharger.

The second thing that we need to make sure that we're paying very close attention to is if we take out a CCS connector, we do not end up killing demand for some period of time before the NACS cable catches up to where the demand was on the CCS cable. That is really what we're juggling. Like everything at EVgo, it is very data-driven. We are looking at sites across the country that perhaps have opportunities for us to swap out a lower-performing CCS cable with a NACS cable that is also located close to where Tesla drivers are based, which is, frankly, everywhere. It is quite data-intensive. We do expect to start rolling out these cables, but it is probably going to be on a retrofit basis, maybe in the 100-150, potentially, give or take around those sorts of numbers over the course of this year.

For our next-generation charging architecture, which will be the second half of next year, we expect there'll be all NACS cables from the outset, if not before that, with the current generation of chargers.

Craig Irwin (Director and Senior Research Analyst)

Excellent. Thank you for that update. My next question is on the eXtend revenue. Again, this quarter was pretty strong, and it's nice to see you building a network out there with partners and incremental profits, incremental driver service, always a good thing. Do you have potential for other eXtend customers that could come in over the course of the next year? How should we think about the shape of eXtend growth, the revenue contribution in this year? Is it going to be as back-end loaded as the stall buildout, or is this something that's going to be a little bit more linear as we look at the year?

Badar Khan (CEO)

Yeah.

Just two things there on the eXtend business. We are not looking at, we are not actively pursuing more eXtend partners. Craig, we have got a great relationship with PFJ, the Pilot Company, and we are deploying throughout the course of this relationship, 2,000 stalls. The build schedule there, we gave an illustrative view on the last quarter. If you look at the last quarter slides, there is a sort of little bar that is sort of semi-shaded that gives a sense of what that schedule could look like through 2028. In terms of this year, the eXtend business is broadly flat in terms of revenue versus last year, slightly lower in the second half versus the first half. Remember, the revenues from eXtend are both equipment sale as well as construction revenues.

Sometimes it could be a little lumpy, but we expect to be broadly similar to last year, be a little less in the second half versus the first half.

Craig Irwin (Director and Senior Research Analyst)

Thank you for that. I'll take the rest of my questions offline.

Badar Khan (CEO)

Absolutely. Yeah. Thanks, Craig.

Operator (participant)

This concludes the Q&A session. I'll turn the call to Badar Khan for closing remarks.

Badar Khan (CEO)

Thank you, everyone. We had yet another strong quarter. With a strong balance sheet, we are in a particularly strong competitive position. Together with a business model that's minimally impacted by tariffs and a supply-demand picture that should underpin continued growth, we are well on our way to delivering just EBITDA break even this year, and I look forward to providing updates throughout the course of this year. Thanks very much, everyone.

Operator (participant)

This concludes today's conference call. Thank you for joining.

You may now disconnect.