EVgo, Inc. Price & Performance (EVGO)

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 material available on the Investors section of our website. With the anticipated growth in dedicated stalls, or stalls for commercial partners such as autonomous vehicles, that are not open to the public, we have now broken out our stall counts into three categories.

Public, dedicated and accept.

Group which shown and discussed today is for our public network only. The revenues for dedicated sites has been reclassed from charging revenue commercial to ancillary revenue this quarter, and the associated costs have been reclassed from charging network cost of sales to other cost of sales. We've provided a quarterly update for these changes for twenty twenty-twenty three and 2024, in the appendix of our investor presentation, but you may update your models appropriately. For the impacted period. With that, I'll turn the call over to Bahn Arcon, EVGO's CEO. EVGO had yet another strong and record quarter.

Customer consumption on our network continues to rise with average daily throughput per public stall rising by 37% versus the same quarter last year. And up more than five fold in three years. Utilization of our network reached what we believe an industry leading 24% up 5% from a year ago and now already within the range of our recently updated and therefore still sorry, but long term forecast. Full year revenues from our core charging business more than doubled year over year. And Q4 represented the ninth sequential quarter of double digit growth. Full year revenue grew 60% year over year a near 12 fold growth in just three years.

We added a record four eighty new operational [indiscernible] including dedicated and extend stalls which made it a record year with over 1,200 new stalls added in the year. And now have over 4,000 operational stalls. And as you all know, after an eighteen month process, we finally closed on a $1,250,000,000 loan guarantee the Department of Energy Loan Programs Office fully finances our ability to more than triple our installed base over the next five years throughout The United States. We received our first advance in January for approximately $75,000,000 leaving us with approximately 200,000,000 in cash in January. EBITDA has not yet scheduled our next quarterly advance. Taking a step back, we know that new sales of battery electric vehicles in The U. S. Have grown considerably over the past several years. However, we are falling behind other markets and in particular China, which is currently winning in an unmistakable race towards electrifying transportation globally. China already outsells The U. S. And automotive sales globally. As a result of extensive and prolonged state sponsorship of its EV industry. U. S. Automakers say their EV production is simply responding to Two biggest drivers in survey after survey for why more U. S. Drivers have not already made the switch to electric vehicles are the upfront price of the vehicle despite the fact that the total cost of ownership is already lower, and the availability of charging infrastructure.

The good news is that there are more and more electric vehicle models available in The U. S. That are becoming increasingly affordable. However, US electric vehicles remain more expensive than the electric vehicles subsidized in China. This is why U. S. Auto CEOs do not support the elimination of incentives and regulations to support the scaling up of EVs in The U. S. On charging, China has more than five times DC fast charging infrastructure per electric vehicle than The U. S. Increasing the supply of charging infrastructure stimulates demand for electric vehicles, which allows U. S. Automakers to increase scale reduce unit costs generate profit on their EV businesses and as a result, improved their competitiveness against Chinese OEMs. As one automotive CEO put it, a global street fight is taking place. In the automotive sector. And The U. S. Needs its EV businesses to scale up be able to compete against China and preserve 2,400,000 automotive manufacturing jobs in The United States. Building up public charging infrastructure is a key enabler of that goal. As you know, EVGO's charging revenues are not linked to new sales at any one year. But by the growth of all electric vehicles in operation or VIO.

And the availability of charging infrastructure in fact, we estimate that less than 10% of 2025 revenue will likely be driven by new first time drivers of EVs, and that ratio will continue to fall each year. Demand growth for our business represented by the growth in EVVIO has been outpacing supply growth of charging infrastructure for years. This is one of the reasons utilization in our network has grown fourfold in three years. In fact, according to DOE, we've had flat growth of new DC fast charging in The U. S. For the past six Presumably, this lack of investment has been driven by the industry's even though EV sales have in fact continued This demonstrates the resilience of our business model. As EV sales rise, utilization on our network rises because charging supply cannot grow fast enough. If EV sales fall, it's likely the pace of new charger development will fall faster as we've already seen a utilization on our network In all cases, existing DIO will continue strong unit economics and demand for our charters. And because we know that the availability of charging infrastructure is one of the most important factors in whether people switch to electric, This means increasing supply actually stimulates demand.

And utilization on our network. [indiscernible] In other words, in almost every scenario, we have a resilient business model where we see growth in our business. We further benefit from the fact that EVgo is more focused on growing usage in our network than some other charging companies maybe. And therefore is likely capturing a greater share of kilowatt hours Other fast charging companies are either [indiscernible] where utilization is lower We are building charging stations to sell cars versus maximizing utilization. Or our non owners whose revenue is based on equipment or software sales and not on utilization. Finally, as we've said many times, we also benefit from multiple other tailwinds that have driven up and will continue to drive up utilization. First, RIDE's share of electrification, Companies such as Uber and Lyft have internal goals to get more drivers to switch to electric and this is supported by policies requiring rideshare become fully electric in large cities such as New York City. When a rideshare driver needs to charge up, during their shift, and usually do so on DCSE networks. So they can get back on the roads quickly. Second, AZ adoption moves from early adopters to the mass market driven by more affordable vehicles.

More EV drivers are expected to live in multi family housing without access to home charging. As we've detailed in the past, multifamily EV drivers charge two times more in our network than single family EV drivers. Third, as vehicles increase their charge rate or the speed at which they can take chargers. The use case for DC fast charging becomes more compelling to drivers. Fourth, autonomous vehicles are beginning to hit the roads in several market tight ends from a few companies. The financial use case for AVs requires them to be both electric and highly utilized. Therefore, like with rideshare drivers when AVs need to charge, they'll use fast charging. EVGO already has partnerships with leading AV firms has 110 dedicated hub stalls in operation representing what we estimate to be approximately 20% share of all dedicated fast charging stalls for the AP sector. We plan to continue to expand this segment in 2025 and expect this to be an area of growth that make her faster than previously thought. And finally, standardization of the charging cables to J3400 commonly referred to as MAX, is an opportunity for EVgo Today, only a small percentage of drivers that use our network are Tesla drivers.

As we add MAX tolls to our network, we are in a unique position to attract roughly 60% of EVgo to our network that isn't currently using our network today. As I've mentioned before, illegal stations tend to be in urban and suburban areas, closer to amenities than many Tesla stations today. In fact, as of this earnings call, we've begun our pilot rollout of the next cable. And while it's very early days, believe the results are promising. The combination of all these factors and what results in a resilient business model for EV Go, driving growth in adjusted EBITDA. 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 financing to accelerate growth. As always, improving our customer experience remains our number one priority. And our strong momentum caps off an excellent year. Customers want a charger to be available when they pull up to an EVgo station. We are deploying larger sites where our standard configuration is now six to eight stalls per site. At the end of twenty twenty four, 20% of our sites have six stalls or more.

With a record number of deployments during the fourth quarter, we reached our goal of 50% of EDGOSTOLs served by our higher power three fifty kilowatt chargers compared to 34% a year ago. AutoCharge Plus continues to gain traction with a big step up in the fourth quarter to 24% of sessions initiated by the seamless plug and charge experience. We are gaining significant traction with auto enrollments for OEMs that have AutoCharge Plus enabled. And finally, our key customer success metric of 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've also made excellent progress on our efficiency priorities. Most notably, we took the MOU with Delta Electronics we signed last October and converted into a signed joint development agreement to co develop the next generation of charging architecture. EVGO and Delta making meaningful progress in this initiative and is expected to lower our gross CapEx per store by 30%. We anticipate production of these stalls to begin in the second half of twenty twenty and we plan to have a prototype for the second quarter of this year.

In 2024, we achieved a 9% reduction our gross CapEx per stall for our current generation of chargers through multiple ongoing efficiency efforts. Additional reductions are underway in 2025, and we look forward to sharing our continued progress. The first sites built with our prefabricated skids are operational and yield savings and build costs and construction timelines. We expect around 40% of our 2025 deployments will utilize prefabricated skids. We continue to drive operational efficiencies in our business with total adjusted G and A as a percentage of revenue delivering a 21 improvement over 2023. In 2025, EBITDA remains focused on operating efficiencies, we anticipate further improvements in G and A as a percent of revenue 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. 56% of EVgo throughput came from rideshare OEM charging credit and subscription accounts in Q4. This provides EVgo with a relatively predictable base load level of demand at our network. EbGo now has over 1,300,000 customer accounts, growing over 50% from 02/2023.

As a result of our investments earlier in the year and our customer marketing platform, we were implementing multiple targeted customer lifecycle campaigns are generating strong growth in retail throughput, which we will continue to prioritize throughout the year. Last year, we began rolling out dynamic pricing in our network and by year end, we expanded that to 100% of our existing fast charging sites. We've already seen the benefits of all of these efforts through expanding margins, but also significantly expanding throughput. We expect the next major update to our dynamic pricing algorithms in the second half of this year. And finally, as I mentioned earlier, we installed native NAC connectors at our first site in early twenty twenty five. We're excited to be able to share the results of this pilot project with you throughout the year. Looking ahead, we expect to expand or sign new partnerships with psych hosts that are capable of scaling. Similar to an expanded partnership we announced in November with Meyer. A Midwest grocery store chain, where we expect to add four eighty new public fast charging stores at Meyer properties over the next three years. In 2025, we also plan to launch the first of 400 new flagship stores 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 ultrafast three fifty kilowatt charters canopies, ample lighting, pull through stations and security cameras unlike all Evigo sites, we'll be located near a diverse set of amenities that customers can take advantage of while charging. Finally, expect to expand the number of dedicated stalls serving autonomous vehicle partners. Which could represent a very attractive source of potential growth for EVgo even we estimate we have a 20% share of operational sites serving this segment today. For financing the growth of the business, Erigo closed at $1,250,000,000 loan guarantee with the DOE LPO in December 2024, with the first roll $75,000,000 occurring in January 2025.

This loan ensures we are fully funded to add at least 7,500 stores more than tripling our installed base over the next five years. In September, we completed the transfer of our first 30C income tax credit for our twenty twenty three vintage stalls and expect to complete the transfer of our twenty twenty four vintage portfolio this [indiscernible] Over the course of this year, we expect around 30% of twenty twenty five vintage CapEx to be offset [indiscernible] local and federal grants, utility incentives, OEM payments and 30C. Federal incentives in the form of technology neutral 30C alternative fuels credit and NEVI represent approximately 10% of our twenty twenty five vintage CapEx. As we've said before, this is not a business particularly reliant on federal incentives. And our next generation charging off potential program targeting at least a 30% reduction in gross CapEx per stall significantly more than the value of these federal incentives. And 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 Paul Dobson, Evigo's CFO will now cover our strong financial performance in the fourth quarter and full year 2024.

Together with our outlook for 2025. Thank you, Madar. EZGo delivered another excellent year in 2024. Our operation team mobilized and operationalized many sites in the fourth and we ended the year with 4,080 operational stops. A 37% increase over 2023. As Bhadar mentioned, we continue to add new customer accounts throughout the year and ended 2024 with over 1,300,000 customer accounts Total throughput on the public network for 2024 was two seventy seven gigawatt hours, 116% increase compared to last year. Revenue for 2024 was $257,000,000 which represents a 60% year over year increase. This growth was primarily driven by charging network revenues. Total charging network revenues of $155,700,000 grew from $74,200,000 in 2024. Exhibiting 110% year over year increase. With retail, commercial and OEM charging revenue each individually as we steadily over the prior year. Xtend revenues $86,600,000 increased from $72,400,000 in the prior year delivering growth of 20% both charging network gross margin and adjusted EBITDA margin significantly improved in 2024 demonstrating the operating leverage in our business model. EVGO's public network throughput group continues to outpace EVVIO growth driven by multiple factors. Since 2021, our public throughput has grown almost 1000% compared to EVVIO growth of over 200%.

In the fourth quarter, network utilization increased to 24 up from 19% a year EVgo. Diving into the detail a bit more, 65% of our stalls had utilization greater than 15%. 53% of our stalls had utilization greater than 20%, and 32% of our stalls had utilization greater than 30%. Each of these utilization categories grew throughout the year with the distribution of the entire utilization curve of the whole portfolio shifting to the right. In the fourth quarter, the average daily throughput for the owned and operated public networks two sixty nine kilowatt hours, compared to 197 last year. Looking at the top 15% of our network, the average daily throughput per public stall was five ninety nine kilowatt versus four fifty in the prior year. The top 15% of our network is already exceeding where we conservatively think the average stall will grow to when we reach 11,000 public stalls. We made significant progress in the profitability of the owned and operated Charging Network gross margin for 2024 was 37.6% up from 26% in 2023. Higher throughput per public stall allows for leverage of the stall dependent costs such as rent, and property taxes. Revenue for the fourth quarter grew 35% compared to last year with total revenue of $67,500,000 While strong charging revenue continue to meet our expectations, certain timing issues caused $4,000,000 of extend revenue to move into the first quarter twenty twenty five.

Adjusted gross profit was $22,800,000 in the fourth quarter of twenty twenty four, up from $13,300,000 in the fourth quarter of twenty twenty three. Adjusted gross margin was 33.7% in the fourth quarter of twenty twenty four, an increase of seven twenty basis points compared to the fourth quarter last year. Adjusted G and A as a percentage of revenue also improved from 54.4% in the fourth quarter of twenty twenty three to 46.2% in Q4 of this year. Demonstrating the operating leverage effect. In the fourth quarter, adjusted G and A increased $4,000,000 sequentially as we are hiring to support our next generation architecture. Adjusted EBITDA was negative $8,400,000 in the fourth quarter of twenty twenty four, a $5,600,000 improvement versus negative $14,000,000 in the fourth quarter of twenty twenty three. For the full year 2024, revenue was $256,800,000 an increase of 60% over 2023. Adjusted gross profit was $75,700,000 in 2024, up from $41,800,000 in 2023. Adjusted gross margin was 29.5% in 2024 an increase from 26% last year. Cost management continued to be a priority for Eveco. With a nearly $100,000,000 increase in revenues, we managed our expenses well and adjusted G and A on an absolute basis increased by only $7,500,000 for the full year $108,200,000 With this leverage, adjusted EBITDA improved to a loss of $32,500,000 for the year, a $26,400,000 improvement over 2023.

Cash, cash equivalents and restricted cash $121,000,000 as of 12/31/2024, we also received our first draw of $75,000,000 under our DOE bonds. In January 2025, which brought our cash, cash equivalents and restricted cash to approximately $200,000,000 We're improving our cash flow profile as well. In 2024, we used $7,300,000 in cash for operations, compared to cash use of 37,100,000.0 in 2023. Gross capital expenditures were $94,800,000 in 2024 Capital expenditures net of capital offsets was $46,400,000 Let's now take a look at our unit economics model. First, we've made a couple of updates to remove the dedicated stalls associated throughput revenue and cost to focus solely on public stalls. Also with cost of sales, all energy demand chargers are now in throughput dependent cost of sales. Whereas it previously was split between stall dependent and throughput dependent cost of And finally, on sustaining G and A per stall, we are looking at a trailing twelve months of G and A to reduce the volatility that occurs when you annualize quarterly number. As G and A has accounting adjustments from time to time. That can cause noise. The growth in average throughput per stall drove the increase in revenue per stall as average revenue per kilowatt hour increased by just $0.01 Throughput dependent cost of sales decreased by $0.02 per kilowatt hour or roughly 8% as we continue our geographic expansion including in Texas and Florida, where energy tariffs are generally lower.

And we are spreading our demand charges over a greater network load. Small dependent cost of sales increased year over year primarily driven by maintenance expense, utilization of the network is increased, Sustaining G and A per stall decreased roughly 5%.

It's quite revealing to see the leverage in the Edigo Moth as annual cash flow per public stall increased five times per last year and the top 15% of our network is now generating roughly $50,000 per stall per year. Which is higher than even the top end of our long term range. Utilization is now already within the range of our updated but still conservative long term utilization range. The enormous tailwind we enjoy from faster charge rate batteries in newer models combined with faster average speed of our network our three fifty kilowatt charger drives much of the remaining increase in daily throughput per stall and our long term assumptions. Looking at the longer term, we should see leverage in install dependent costs driven by material improvements in the maintenance costs driven by the NextGen architectures improved maintenance profile. Our sustaining G and A per stall we expect this number will increase in 2025. As we are making investments, installed growth is back halfway We are targeting this to reduce to 7,000 in a long term As we build a larger network and fixed G and A expenses are allocated over a three times larger stall base. As we build critical supply of fast charging infrastructure, over the next several years, we reach a scale of roughly 11,000 stalls, which leverage of the model is expected to generate annual returns of 50% per stall.

Taking a simple math approach to our unit economics, the path to a much larger business in the long term is clear. At 11,000 public stalls, we expect to generate around $1,000,000,000 in annual revenue charging network gross profit of $550,000,000 There are some investments in G and A to be made a growth rate is anticipated from gross profit scale much faster. At 11,000 public stalls, the core owned and operated business of EVgo could be generating $300,000,000 to $425,000,000 in annual adjusted EBITDA. As a reminder, this excludes contribution from any other business lines like dedicated hubs, or growth outside of the DOE loan. We growth engine we built at Evico will continue to deploy stalls at a greater rate in 2025 we achieved in 2024. We anticipate owned and operated public and dedicated stalls of 805, with the vast majority being stalls or the public chamber. As a reminder, we prudently held back capital towards the end of twenty twenty four, awaiting the closure of the DOE loan. And as such, our 2025 build plan will be back halfway We anticipate roughly 50% of Pistols planned for 2025 will be in the fourth quarter of twenty twenty five.

And we expect to build another four to five fifty stalls in 2025, which [indiscernible] This increase in total deployments in 2025 shows we're on the path to deliver 7,500 stalls under the DOE law. As a reminder, public network stall build plan from 2025 to 2029 shown here is supported by the DOE mode.

If we're successful in lowering CapEx per stall, in line with our stated plans, we would be able to build approximately 1,600 more stalls without an increase in the DOE loan finance upon release of our next generation architecture in 2026, We expect to add even more dedicated stalls for AV partners in 2026 and beyond. Our build plan for the pilot company through our Xtend contract is currently expected to be completed by 2027. EVGO continues our top line growth and path to profitability in 2025. We expect total revenues in the range of $340,000,003 $80,000,000 We continue to target adjusted EBITDA breakeven in 2025 with a range of negative $5,000,000 to positive $10,000,000 Additional color behind these ranges [indiscernible] charging network revenue is expected to comprise approximately two thirds of our total revenue in 2025. In charging network revenue, anticipate sequential quarterly growth throughout 2025. Q1 is typically flat to Q4 as it is the lowest quarter of the year historically for vehicle miles traveled. Extend revenues are expected to be roughly flat in 2025 to 2024, with growth in the second half of the year. Ancillary revenues are expected to grow in 2025 with most of the growth coming in the fourth quarter of twenty twenty five driven by the dedicated business. [indiscernible] Total adjusted gross profit and adjusted G and A as a percentage of revenue are expected to improve in 2025 driving bottom line adjusted EBITDA improvement.

Adjusted G and A is expected to increase modestly from the Q4 run rate throughout 2025, reflecting continued investments in technology, and efficiency, plus inflation. We expect fiscal CapEx net of offsets to be in the range of $160,000,000 dollars for 2025. 2025 will be a pivotal and exciting year for EVgo. Operator, we can now open the call for Q and A. Our first question will come from the line of Bill Peterson with JPMorgan.

Yes. Hi. Good morning. Thanks for taking the questions and And also nice result in 2024 when looking back at your guidance from last year coming in at the high end on both revenues and adjusted EBITDA. So nice My first question is on the loan and the status of the loan.

Perhaps you can shed some light on when you expect the second drawdown to occur? Is there any conditions that must be fulfilled? I mean, how are discussions happening with the administration? What avenues do you have to counter any attempts to claw back the loan or with this loan apparently being delayed? Just Just kind of wondering what you have there. And then really in the worst case scenario, you talked about financing options, but I assume those are near term. But can you shed some more light on your non dilutive financing options with or without the loan? For example, I'm assuming maybe project financing with some debt or equity partners, but what does appetite look like for such options today?

Sure. Hey, Bill. So look, we have a very productive relationship with the LPO team. As we said here on this call before, we see charging infrastructure is actually key to the long term competitiveness of The U. S. Auto industry as it competes against China. And as you know, and I think as everyone knows, this is not conditional commitment, but a legally binding contract that we're spending two months on. And adds 1,000 jobs. All government funding is under review that I think everybody knows that.

But we believe that they see what we see and what you're looking at today. These assets have very strong performance, The loan is a good deal for the U. S. Government. It's been carefully structured. To provide protection to the government and also flexibility for us And so our confidence in the loan really hasn't changed. We received our first quarterly advance in January and it's obviously too early for the next the next quarter, which would be in Q2. As we said, in December and as we're saying today, we become EBITDA breakeven this year. And levered free cash flow positive in 2026, meaning if we hadn't financed this growth there are likely many others that really would have. And so Paul, do you want to just comment on the we are also we've been talking about additional non dilutive financing all year last year. At the beginning of this time last year, it was as an option as an alternative to DOE loan. Of course, it's now we consider as complementary to the DOE loan.

For additional financing. But do you want to maybe just share Yes. So just as Bhartar mentioned, we're looking at complementary refinancing to sit alongside the DOE loan. First four, any projects [indiscernible] the installs can't go into the DOE loan because they're not public. But also, we just think it's good practice to have alternative sources of funding available. Lots of businesses do that and I think that's a good thing for EVCo to pursue. So we have been talking with various institutions, banks and what they like about our model is to steady and predict [indiscernible] that we've shown in the past. And so we're looking at structures that are somewhat similar to the DOE loan, of course, not at the same length and term. [indiscernible] some sort of a hybrid.

We are sure that we want to pursue non dilutive funding as well. So but like I said, the reception from the banks has been extremely positive They like that we're a proven developer. As you mentioned, Bill, execution, they can see the execution confident we're going to be able to execute on a complementary source of financing this year.

Okay, Sputter and Paul for that. And then second question, I'd like to kind of unpack a little bit about the full year guide again in the context [indiscernible] So guess what can drive the outcomes to the negative or positive end And is any of this dependent on DOE loan deployments or perhaps you can shed some more light or quantify how much G and A increase per stall is going up, maybe potentially offset by factors like utilization, charging rate and network throughput? And how should we think about those factors as part of the guidance? Should we use for the fourth quarter as kind of a guidepost? Or are you seeing any improvement relative to the to the exit rates from 2024?

Yes, Bill. Let me just ask Paul to respond to that, but one thing I will say, in response to that question upfront. I did say in my script that we expect less than 10% of our revenue to come from new sales of electric vehicles in 2025, which is simply a reflection and that will reduce over time. It's a reflection that this is a business model that's dependent upon total VIO rather than annual EV sales.

Maybe Paul, you can provide some color on that Bill's question. Sure.

So just a bit more background on the guidance We said revenue of $340,000,000 to $380,000,000 We said two thirds of that is charging revenue. And so the range we put around that really does reflect some variability, not much, but plus or minus 5% on throughput, plus there is some risk around LCFS pricing as well. The other third of revenue is the non charging revenue and that range is due to some timing differences on contracts, the timing of when we get contracts signed, permitting, logistics and then some nevi risk as well. We've also said G and A we expect will increase modestly from our Q4 run rate. Which reflects our investments in technology. Plus some inflation. Said our adjusted EBITDA range is minus $5,000,000 to $10,000,000 positive. So with all of that above, you can and looking at our 2024 results, should be able to derive what our adjusted gross margin would be using the midpoint of all of that of those ranges. And you'll see that our adjusted gross margin percentage for both the charging business and the non charging business is is increasing as well. Thanks for sharing those insights and nice job on the execution in 2024.

Thanks Bill. Thanks Bill. Our next question comes from the line of Chris Dendronos with RBC Capital Markets.

Please go ahead.

Yes, thank you and good morning and echoing Bill's comments on the good year last year.

Maybe just to start out and following up on the prior question as it relates to Trump executive orders. And I guess the question is, If there is like a funding halt this year or next year or something like that, How would you all respond? Would you curtail activity or would you look I guess you mentioned backfilling with some other opportunities for for maybe debt funding. So would that be the option I guess, continue the growth cadence that you're on right now?

Chris, are you talking about the executive orders and their packed on electric vehicle sales Is that what you're saying? Well, just on if say like the DOE loan was was paused and I guess, took you all to court to try to fight it and not fund it.

Right, right. Okay. So yes, look, we as we said before, on the last question on Bill's question, we We feel very confident in the loan. It's performed the loan assets themselves are performing very strongly. It's a good deal for the U. S. Government with a lot of protections for the government. So we feel pretty good about it. Terms of funding and cash flow, I mean we have very strong cash balance We're starting the year with about $200,000,000 and so we feel very very good about that.

Yeah. So that's right.

So as we mentioned, we've got around $200,000,000 of cash, including the drawdown we took in. In January. And when you step back and look at our model, primary uses of our cash are the cash from operations and end work. For CapEx. So since we're going to be EBITDA breakeven and 2025, that implies that our operating cash flow is close to breakeven as well. You saw in 2024, our cash from operations, we used $9,000,000 which was a significant improvement over 2023. So you can cast that forward and say that's more or less breakeven as well in 2025. So that leaves CapEx as kind of the swing factor. So our net CapEx is expected to be $160,000,000 to $180,000,000 which includes build outs not only for the twenty twenty five stalls, but also for twenty twenty six vintage as well. And we have the option of course to either speed up or slow down the deployment of those those stalls if we choose depending on funding or for any other reason. And just to reiterate, we are pursuing complementary non dilutive financing and confident we'll be able to put something in place this year.

Got it.

Okay. And then maybe as a follow-up, you highlighted some opportunities on the EV charging station side, those private stalls. Can you maybe, I guess talk about the strategy Network stations?

Thanks. Yes, absolutely. Yes. Look, so we've been building and operating these dedicated sites, dedicated hubs. So for autonomous vehicle fleet partners, actually for a couple for a number of years. Last year, we more than doubled the number of stalls that are operational dedicated home stalls from to 110, and that's why we actually separated it out from the public network. So These are we received a fixed dollar amount for the on a monthly basis for these stalls where the electric have passed through. And so we consider it's a different revenue model. In terms of relative attractiveness, margins for this business are a little less, a little lower than our public owned and operated quite a bit higher than the margins from our Extend business. But of course, they don't come with any utilization. Variability. And so we actually quite like this segment. And I think as we said, last year, the end of last year, we actually think that this autonomous vehicle, robotaxi space could grow quite a bit faster. Over the coming years and maybe we had thought previously, especially since the election, And so we're quite excited by this. We estimate there's not a lot of data on this, but we estimate we have about a 20% share of dedicated hubs for autonomous vehicle partners today.

Got it.

Thank you. [indiscernible] Next question comes from the line of Douglas Dutton with Evercore ISI.

Thank you. Hey, Tim. Thanks for having me on.

I was just curious about how the strategy has maybe shifted on the prior prioritization of geographic growth over the next few years. I understand the commentary about tripling the number of stalls, but has this current administration's we'll call it, more limited scope on electrification had you guys rethink which states or markets to focus on, maybe those where EV density is already at critical mass?

Yes. Look, let me just comment a little bit on the the impact on electric vehicle sales. I said in my remarks, our business is driven by the difference between the supply of DC fast charging and demand in terms of of overall VIO, not annual sales, And that supply has exceeded demand for years. It's why we've seen a fourfold increase in utilization over the last three years. And so that's really what's driving the economics in our business. As demand grows, we benefit with better utilization. If demand slows, what we have already seen is the supply of fast charging across the industry seems to slow. And therefore, we benefit because exceeds demand. If charging supply grows, in other words, if other companies charging companies are building out charging infrastructure. We know that stimulates demand. This is not a zero sum game and we also benefit We actually think we benefit because we've got better located stalls. And we are singularly focused on usage unlike many other charging companies. And so is actually a pretty resilient business model. In terms of your specific question, around geographic expansion, we are increasing the share of of our store growth network expansion outside California.

That's been a trend that's been underway for a number of years. In the fourth quarter, of last year, we saw usage inflect for the first time where the rest of The United States is now greater than California and we're seeing very strong utilization in many of these non California markets And that's really we'll be following demand. We're going to build our network plan. It's designed to follow demand and that's really what we're doing.

Awesome. That makes a lot of sense. Thank you, team.

Yes.

Our next question comes from the line of Gabe Daoud with TD Cowen.

Please go ahead.

Thanks. Hey, good morning, everybody.

Was hoping we can maybe maybe focus on CapEx just for a minute and has there been any sensitivities or studies that you guys have done with respect to potential tariffs and how that impacts your Perstal CapEx figure over time?

Okay. We really have sort of minimal impact from these tariffs direct impact from these tariffs. We don't source our charters from China. I think as you know, [indiscernible] Our supply chain is really not impacted by Canada or Mexico tariffs. Hardware vendors have operations in The United States for Baba compliant shipments and if things continue to change for whatever reason, we can ramp up that production if we need it. In the reality, we really have a lot of options in our supply chain and we are in discussions with our supply chain in different geographies pretty much all the time. And so at this point, with respect to what's been announced, we really don't have much impact in our direct business in terms of our charging infrastructure. And in terms of indirect impact on EV demand, as I said already, our business is a resilient business model where our economics and our utilization is driven by the the delta between supply of EV versus demand of EV versus supply charging infrastructure and that's been an imbalance for years. And that's really what's driving our growth.

Thanks, Bhadir. That's helpful.

And then I guess just as a follow-up, on the demand charge side, could you maybe give us an update on you stand with some utilities and some jurisdictions on expanding or instituting demand charge holidays and do you think there's maybe a risk over time as there's obviously a significant expected load growth in The U. S. For the first time maybe ever. On AI data centers, etcetera. But maybe how does that potentially impact like demand charges and demand charge holidays?

Yes. We've done demand charge reductions or holidays across the vast majority of our kilowatt hours [indiscernible] And as utilization and throughput per stall on a per site basis continues to grow, Clearly, the impact of of demand charges just becomes smaller frankly, over time. And so it's one of the reasons where we're seeing operating leverage in gross margin And as as throughput per store continues to grow, as you've seen throughput per store has grown fivefold throughput per stall over our network over the last three years. The impact of demand charges just become smaller and smaller over time.

Got it. Got it. Makes sense. Thank you. Yes.

Our next question comes from the line of Patrick LeD with Stifel. Please go ahead.

It's Pat on for Steven Jigaro. Thanks for taking the questions. Would you be able to give us details on how you think of utilization evolving in 2025 based on your guidance? And longer term, is there sort of a sweet spot of utilization across the network that you're targeting, understanding that if utilization gets up to, I imagine in the 70% plus range, then drivers would be waiting to charge at your stations? Yes. And look, let me I'll ask Paul just to comment on 2025.

But we're just at a very high level. We're at 24% utilization. We just updated our long term target just at the end of last year from our previous target, and we're already at that to 23 to 23% to 26% and we're already in that range. As you saw in one of the slides, roughly two thirds of our charging stalls are already over 15%, almost a third are already over 30%. And so we might find ourselves over the course of this year updating that long term target again. In terms of taking a step back, We have the scale and the sophistication today to deploy pricing and customer marketing because we have the scale and the sophistication to do this to be able to go from not just building charging stations and hoping people show up to actually influencing and shaping who is charging when and at some point where, right now there's not enough density, of these charging stations. There's enormous white space. And that's pretty and we're doing that to allow us to see increases in charging without congestion. And so we think we're quite sophisticated there. And over the course of this year, we may find ourselves updating utilization again.

But as a reminder, throughput per stall is both utilization and charge rate. We have a charge rate tailwind. Because of faster batteries in the cars and our network is getting faster and faster every month as we deploy two fifty kilowatt chargers. Those two things are what drives the volume in our price times volume formula.

But Paul, do you want to comment on 2019? So, yes, without repeating too much, much you just said about it. But if you look at our utilization, from our from the slide that we showed, [indiscernible] we went from 19% in 2023, the end of twenty twenty three or Q4 to 24%, so five point increase in one year. As Bader mentioned, our guidance of 23% to 26%, we're already in the range now. So when you're modeling for 2025, encourage you to put utilization at the highest end of the range And as you mentioned, we may revisit that. In 2020, later on this year. As we get more information about the performance of our stores.

And then charge rate similarly increasing from 43 kilowatts to 47 kilowatts in Q4 twenty twenty four, so up four we continue to see that increasing as newer vehicles with faster charge speeds hit the market, and redeploy more three fifty kilowatt chargers out there too, which are able to accommodate that. So we see a big increase there, an increase there throughout 2025. As Banner mentioned, in terms of it's not just utilization, one thing that we're learning as well, the time of day is just as almost as important in terms of how we manage utilization. We're finding in some cases, we have chargers deployed where they're being utilized, you know, at 15% utilization at 03:00 in the morning. Which is incredible, to see. But how we influence when those chargers are being used through pricing signals and other means, other marketing, is going to be important for us to manage the utilization going forward.

Just a follow-up, I know in the past you said non testing vehicles make up the majority of the throughput on the network. But just curious if you've seen any uptick Tesla vehicles charging on the network, especially since it opened its network to other OEMs.

Yes. I mean, look, so Tesla vehicles generally as we've said before don't charge haven't historically charged our network. With the introduction of the NACS cable, Stephen, we are really excited to be able to start charging and attracting Tesla vehicles on our network without an adapter, with a native connector, and that represents another source of increase in throughput on our network. Without any impact on without any increase in BBBIO. Our first site with MAX cables are now deployed. It's a pilot site. So it's too early for me to comment on the data. I will say I'm excited that we've got the NICE cable deployed and we're seeing clearly we're seeing test of vehicles charge in our network at high rates and we've ever seen before, but it's too early to be able to project that out. Across the rest of our network. And we will be looking to increase the deployment of these next cables throughout the course of this year. Our next question comes from the line of William Grippen with UBS.

Please go ahead.

Thank you. Good morning, everybody. My first question here was just based on The skid based hardware that you've talked about deploying here in 2025, I don't think you gave the number, but what extent could that drive some cost reductions for 2025 vintage CapEx? And could could that potentially offset the loss of 30 C tax credits, should that actually happen?

Yes.

I mean, look, I mean, that's just quickly just take a step back on the 30 C tax credits. These are this is, I think, less than 0.5% of the total cost of the IRA. [indiscernible] It's they're technology neutral, they're bipartisan supporting because they are incentives for all kinds of charging infrastructure, not just electric vehicles. And these federal incentives, they represent about 10% of our gross CapEx per stall And so why I keep saying our business is really not reliant on federal incentives. The charger CapEx reduction program that we have in place through the MOU through the signed agreement now with Delta, is looking at a 30% improvement in gross CapEx per stall.

We've seen a 9% improvement in 2024 versus what we were expecting for 2024. We see a modest improvement next year. In the overall average gross CapEx per stall, which includes the impact of the higher percentage of prefab skids that we've got going on. As well as other efforts around equipment, site design, construction processes. The only reason why it's an average it's a modest improvement is because we're introducing flagship stalls this year. As a reminder, we're deploying about 400 flagship stalls over the next few years is through our GM relationship. They come with a higher price. They obviously come with a significantly higher offset to make it an economically attractive deal for us. But in other words, absent that, we're normalizing for that.

We're continuing to see incremental improvements in gross CapEx per stall before our next generation of charging equipment, which will take us to a 30% Got it. And then just wanted to follow-up here on the pilot site with the Naxx connector. I know you said it was early, but could you speak to what maybe some of the early observations have been here in terms of charging behavior and maybe mix of vehicles?

Well, it's really too early. We've got more test [indiscernible] Clearly and so we're excited by that. We've done very little marketing or no marketing, frankly, on those Tesla sites. And so until we've done that, it's hard for us to be able to say, okay, now this is something that's that you can take that we can take as a data point to inform our deployment over the course of the rest of this We're thrilled that we're I appreciate the time. [indiscernible] Go ahead.

Final question will come from the line of Chris Pierce with Needham. Please go ahead.

Hey, not to belabor that text the Tesla and Hacks point, but is that something you plan to accelerate this year given prior expectations, given sort of public sentiment towards leadership there? Or again too early to kind of make any statements?

Chris, I think so in terms of the deployment of Max connectors, yes, we [indiscernible] As a company, we charge all electric vehicles. That's been our policy and our philosophy and our strategy. In our charging lab, out in California, we are bringing in and testing all electric vehicles including Tesla vehicles.

We're excited about the standardization of cables. I think it's simplifies the customer experience And so we're excited about deploying NACs cables. I've been talking about it all year last year and where we've got the first site now with the next cable as a pilot. We expect to be able to deploy those MAX cables throughout our network, either through retrofit I think starting probably with retrofit and then into new stalls probably late this year or next year.

And as I said, it allows us to grow through without any increase in BIO. It's another one of the reasons why this business model and our company in particular is so resilient.

Okay. And then you sort of hit on the director directions of the business.

Regardless of what happens on EV adoption or competition on the charging side of the world. So when you see someone like Iona move from beta to national release talking about putting 1,000 fast charity stars out there this year, What are your kind of like at high level, how do you think about that and how do you think about it kind of I just kind of want to get your thoughts on that from a competition perspective.

Yes. I mean, this is I mean, I think we been saying for a while, this is not a zero sum game business. Unlike many other sectors of the economy, as charging companies deploy charging infrastructure demand increases. We know that. We know that one of the reasons there's two reasons why customers are still on the fence on whether to switch over to electric vehicles. One is the upfront price despite TCO being lower. And the second is charging infrastructure. People are worried about range anxiety. And so as people are deploying charging infrastructure, it just stimulates demand, which is good for us. With respect to IONA, you're right, it's been almost a couple of years was announced and I'm I'm glad to see that they've got a handful of sites now finally operational. We obviously look at those sites and our perspective, we've got, as you know, very [indiscernible] It doesn't appear to us that those sites are sites that that we would look at in terms of maximizing utilization But again, many of these charging companies have goals other than utilization once Chasing Nevi awards, for instance, are clearly non focus on utilization because there's and there's not a lot of growth of utilization highways.

And IONA may indeed have other goals beyond utilization. For their network. Either way, for us, increasing charging supply results to increase in demand and because we've got well located sites, we think we're getting a disproportionate share of kilowatt hours.

Okay.

Thanks for the detail and good luck.

And that will conclude our question and answer session. And I'll now turn the call back over to Badar Khan for closing remarks.

Great. Well, thank you everyone. We had yet another record quarter finishing off a record year. The charging infrastructure we're building is a key ingredient to the long term competitiveness and sustainability of The U. S. Automotive industry. And that's one of the reasons why what we do is so important Unlike others in the charging space, we have a resilient business model that is set to deliver another year of strong growth and reaching EBITDA breakeven, and I look forward to providing updates on our progress on this and our priorities at our earnings calls throughout the year. Very much, everybody.

That will conclude today's call. Thank you all for joining. You may now disconnect.