EVGO - NASDAQ

Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the EVgo Fourth Quarter and Full Year 2024 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] I would now like to turn the conference over to Heather Davis, Vice President of Investor Relations. Please go ahead.

Good morning, and welcome to EVgo's fourth quarter and full year 2024 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 Paul Dobson, EVgo's Chief Financial Officer. Today, we will be discussing EVgo's fourth quarter financial results and our outlook for 2025 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's filings, including in 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 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 eXtend. Throughput shown and discussed today is for our Public Network only. The revenue 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 provided a quarterly update for these changes for 2023 and 2024 in the appendix of our investor presentation, so you may update your models appropriately for the impacted periods. With that, I'll turn the call over to Badar Khan, 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 stalls rising by 37% versus the same quarter last year and up more than five-fold in three years. Utilization on our network reached what we believe is an industry leading 24%, up 5% from a year ago and now already within the range of our recently updated and therefore still conservative 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 480 new operational stalls in the fourth quarter, 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 18-month process, we finally closed on a $1.25 billion loan guarantee with the Department of Energy Loan Programs Office that 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 million, leaving us with approximately $200 million in cash in January. EVgo has not yet scheduled our next quarterly advance. Taking a step back, we know that new sales of battery electric vehicles in the US 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 US in automotive sales globally as a result of extensive and prolonged state sponsorship of its EV industry. US automakers say their EV production is simply responding to demand. Two biggest drivers in survey after survey for why more US 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 US that are becoming increasingly affordable. However, US electric vehicles remain more expensive than the electric vehicles subsidized in China. This is why US auto CEOs do not support the elimination of incentives and regulations to support the scaling up of EVs in the US. On charging, China has more than five times the DC fast-charging infrastructure per electric vehicle than the US. Increasing the supply of charging infrastructure stimulates demand for electric vehicles, which allows US automakers to increase scale, reduce unit costs, generate profit on their EV businesses, and as a result, improve their competitiveness against Chinese OEMs. As one automotive CEO put it, "A global street fight is taking place in the automotive sector, and the US needs its EV businesses to scale up to be able to compete against China and preserve the 2.4 million automotive manufacturing jobs in the United States. Building out public charging infrastructure is a key enabler of that goal." As you know, EVgo's charging revenues are not linked to new sales in 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 EV VIO, has been outpacing supply growth of charging infrastructure for years. This is one of the reasons utilization of our network has grown four-fold in three years. In fact, according to DOE, we have had flat growth of new DC fast charging in the US for the past six quarters. Presumably, this lack of investment has been driven by the industry's expected slowdown in EV sales even though EV sales have, in fact, continued to grow. 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, and utilization on our network rises. In all cases, existing VIO will continue to underpin strong unit economics and demand for our chargers. 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 rises. 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 may be. And therefore, it's likely capturing a greater share of kilowatt hours. Other fast-charging companies are either highway-focused, chasing NEVI awards where utilization is lower, who are building charging stations to sell cars versus maximizing utilization, or are 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 is rideshare 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, they'll usually do so on DCFC networks so they can get back on the roads quickly. Second, as EV adoption moves from early adopters to the mass market driven by more affordable vehicles, more EV drivers are expected to live in multifamily 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 electrons from chargers, the use case for DC fast charging becomes more compelling to drivers. Fourth, autonomous vehicles are beginning to hit the roads of several market pilots 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 and has a 110 dedicated hub stalls in operation, representing what we estimate to be approximately 20% share of all dedicated fast charging stalls for the AV sector. We plan to continue to expand this segment in 2025 and expect this to be an area of growth that may occur faster than previously thought. And finally, the standardization of the charging cables to J3400, commonly referred to as NACS, is an opportunity for EVgo. Today, only a small percentage of drivers that use our network are Tesla drivers. As we add NACS stalls to our network, we are in a unique position to attract roughly 60% of EV VIO to our network that isn't currently using our network today. As I've mentioned before, EVgo 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 NACS cable. And while it's very early days, we believe the results are promising. The combination of all these factors are what results in a resilient business model for EVgo, driving growth and 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 2024, 20% of our sites had six stalls or more. With a record number of deployments during the fourth quarter, we reached our goal of 50% of EVgo stalls served by our higher-power 350 kilowatt chargers compared to 34% a year ago. Autocharge+ 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+ enabled. And finally, our key customer success metric of One & Done increased 4 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 are making meaningful progress in this initiative and 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 for the second quarter of this year. In 2024, we achieved a 9% reduction in 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 in 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&A as a percentage of revenue, delivering a 21 point improvement over 2023. In 2025, EVgo remains focused on operating efficiencies, and we anticipate further improvements in G&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's throughput came from rideshare, OEM charging credit, and subscription accounts in Q4. This provides EVgo with a relatively predictable baseload level of demand at our network. EVgo now has over 1.3 million customer accounts, growing over 50% from 2023. As a result of our investments earlier in the year in our customer marketing platform, we've been implementing multiple targeted customer lifecycle campaigns that 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 can already see the benefits of all of these efforts through expanding margins, but also significantly expanding throughput. We expect the next major uptick to our dynamic pricing algorithms in the second half of this year. And finally, as I mentioned earlier, we installed native NACS connectors at our first site in early 2025. 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 site hosts that are capable of scaling, similar to the expanded partnership we announced in November with Meijer, a Midwest grocery store chain, where we expect to add four eighty new public fast-charging stalls at Meijer Properties over the next three years. In 2025, we also 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 kilowatt chargers, canopies, ample lighting, pull-through stations, and security cameras, and like all EVgo sites, 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 this segment today. As for financing the growth of the business, EVgo closed $1.25 billion loan guarantee with the DOE LPO in December 2024 with the first draw for $75 million occurring in January 2025. 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. In September, we completed the transfer of our first 30C income tax credit for our 2023 vintage stalls and expect to complete the transfer of our 2024 vintage portfolio this year. Over the course of this year, we expect around 30% of 2025 vintage CapEx to be offset from state, 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 2025 vintage CapEx. As we said before, this is not a business particularly reliant on federal incentives, and our next-generation charging architecture program is 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, EVgo'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, Badar. EVgo delivered another excellent year in 2024. Our operation team mobilized and operationalized many sites in the fourth quarter, and we ended the year with 4,080 operational stalls, a 37% increase over 2023. As Badar mentioned, we continue to add new customer accounts throughout the year and ended 2024 with over 1.3 million customer accounts. Total throughput on the public network for 2024 was 277 gigawatt hours, a 116% increase compared to last year. Revenue for 2024 was $257 million, which represents a 60% year-over-year increase. This growth was primarily driven by charging network revenues. Total charging network revenues of $155.7 million grew from $74.2 million in 2024, exhibiting 110% year-over-year increase, with retail, commercial and OEM charging revenue each individually at least doubling over the prior year. eXtend revenues of $86.6 million increased from $72.4 million 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 growth continues to outpace EV VIO growth, driven by multiple factors. Since 2021, our public throughput has grown almost 1,000% compared to EV VIO growth of over 200%. In the fourth quarter, network utilization increased to 24%, up from 19% a year ago. Diving into 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 network was 269 kilowatt hours compared to 197 last year. Looking at the top 15% of our network, the average daily throughput per public stall was 599 kilowatt hours versus 450 kilowatt hours 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 public charging network this year. 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 $67.5 million. While strong charging revenue continued to meet our expectation, certain timing issues caused $4 million of eXtend revenue to move into the first quarter of 2025. Adjusted gross profit was $22.8 million in the fourth quarter of 2024, up from $13.3 million in the fourth quarter of 2023. Adjusted gross margin was 33.7% in the fourth quarter of 2024, an increase of 720 basis points compared to the fourth quarter last year. Adjusted G&A as a percentage of revenue also improved from 54.4% in the fourth quarter of 2023 to 46.2% in Q4 of this year, demonstrating the operating leverage effect. In the fourth quarter, adjusted G&A increased $4 million sequentially as we are hiring to support our next-generation architecture. Adjusted EBITDA was negative $8.4 million in the fourth quarter of 2024, a $5.6 million improvement versus negative $14 million in the fourth quarter of 2023. For the full year 2024, revenue was $256.8 million, an increase of 60% over 2023. Adjusted gross profit was $75.7 million in 2024, up from $41.8 million in 2023. Adjusted gross margin was 29.5% in 2024, an increase from 26% last year. Cost management continued to be a priority for EVgo. With a nearly $100 million increase in revenues, we managed our expenses well and adjusted G&A on an absolute basis increased by only $7.5 million for the full year to $108.2 million. With this leverage, adjusted EBITDA improved to a loss of $32.5 million for the year, a $26.4 million improvement over 2023. Cash, cash equivalents, and restricted cash was $121 million as of December 31, 2024. We also received our first draw of $75 million under our DOE loans in January 2025, which brought our cash, cash equivalents, and restricted cash to approximately $200 million. We're improving our cash flow profile as well. In 2024, we used $7.3 million in cash for operations compared to cash use of $37.1 million in 2023. Gross capital expenditures were $94.8 million in 2024. Capital expenditures net of capital offsets was $46.4 million. Let's now take a look at our unit economics model. First, we've made a couple of updates to remove the dedicated stalls, their associated throughput, revenue, and cost to focus solely on public stalls. Also with cost of sales, all energy demand charges are now in throughput dependent cost of sales, whereas it previously was split between stall-dependent and throughput-dependent cost of sales. And finally, on sustaining G&A per stall, we are looking at a trailing 12 months of G&A to reduce the volatility that occurs when you annualize the quarterly number as G&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. Stall-dependent cost of sales increased year-over-year, primarily driven by maintenance expense as utilization on the network has increased. Sustaining G&A per stall decreased roughly 5%. It's quite revealing to see the leverage in the EVgo model as annual cash flow per public stall increased 5 times for 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 from our 350 kilowatt charger drives much of the remaining increase in daily throughput per stall in our long-term assumptions. Looking at the longer-term, we should see leverage in stall-dependent costs driven by material improvements in the maintenance costs driven by the next-gen architectures improved maintenance profile. For sustaining G&A per stall, we expect this number will increase in 2025. As we are making investments in stall growth is back-half weighted. We are targeting this to reduce to 7,000 in a long term as we build a larger network and fixed G&A expenses are allocated over a 3 times larger stall base. As we build critical supply of fast-charging infrastructure over the next several years and reach a scale of roughly 11,000 stalls, the 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 billion in annual revenue, recharging network gross profit of $550 million. There are some investments in G&A to be made, but growth rates anticipated from gross profit scale much faster. At 11,000 public stalls, the core owned and operated business of EVgo could be generating $300 million to $425 million 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. The growth engine we've built at EVgo will continue to deploy stalls at a greater rate in 2025 than we achieved in 2024. We anticipate owned and operated public and dedicated stalls of 800 to 900 in 2025 with the vast majority being stalls for the public network. As a reminder, we prudently held back capital towards the end of 2024 awaiting the closure of the DOE loan. And as such, our 2025 build plan will be back-half weighted. We anticipate roughly 50% of the stalls planned for 2025 will be in the fourth quarter of 2025. And we expect to build another 450 to 550 stalls in 2025 for our EVgo eXtend partners. This increase in total deployments in 2025 shows we're on the path to deliver 7,500 stalls under the DOE loan. As a reminder, the public network stall build plan from 2025 to 2029, shown here, is supported by the DOE loan. 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 financing starting from 2027 onwards 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 eXtend 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 million to $380 million. We continue to target adjusted EBITDA breakeven in 2025 with a range of negative $5 million to positive $10 million. Additional color behind these ranges are as follows: charging network revenue is expected to comprise approximately two-thirds of our total revenue in 2025. In charging network revenue, we 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 2025, driven by the dedicated business. Total adjusted gross profit and adjusted G&A as a percentage of revenue are expected to improve in 2025, driving bottom-line adjusted EBITDA improvement. Adjusted G&A is expected to increase modestly on 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 million to $180 million for 2025. 2025 will be a pivotal and exciting year for EVgo. Operator, we can now open the call for Q&A.

[Operator Instructions] Our first question will come from the line of Bill Peterson with JPMorgan. Please go ahead.

Yeah. Hi, good morning, and thanks for taking the questions. 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 execution. 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 kind of wondering what you have there. And then, really, in the worst case scenario, you talked about some 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 the appetite look like for such options today?

Sure. Hey, Bill. So, look, we have a very productive relationship with the LPO team. As we've said here on this call and before, we see charging infrastructure is actually key to the long-term competitiveness of the US auto industry as it competes against China. And as you know, and I think as everyone knows, this is not a conditional commitment, but a legally binding contract that we're spending two months on, and adds a thousand 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 US 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 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 with the DOE loan, there are likely many others that really would have. And so, Paul, do you want to just comment on the...

Sure.

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 the 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 talk about...

Sure. Yeah. So, just as Badar mentioned, we're looking at complementary financing to sit alongside the DOE loan. First of all, any projects that the stalls 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 EVgo to pursue. So, we have been talking with various, institutions, banks, and what they like about our model is the steady and predictable cash flows. They've seen our unit economics. They've seen everything 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 of term, but project financing to straight debts or 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 the proven developer. As you mentioned, Bill, execution, they can see the execution happening, and they can see the cash flows as well. So, confident we're going to be able to execute on an on a complementary source of financing this year.

Yeah, thanks, Badar and Paul, for that. And then, my second question, I'd like to kind of unpack a little bit about the full year guide again in the context that last year proved to be conservative. So, I guess, what can drive the outcomes to the negative or positive end? And does any of this depend on DOE loan deployments? Or perhaps you can shed some more light or quantify how much G&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 assuming any improvement relative to the exit rates in 2024?

Yeah. Bill, let me -- let Paul ask -- let me just ask Paul to respond to that, but just 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'll reduce over time, it's a reflection that this is a business model that's dependent upon total VIO rather than annual EV sales. I mean, Paul, you can provide some color on...

Sure. So, just a bit more background on the guidance. So, we said revenue of $340 million to $380 million. 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, just 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&A, we expect will increase modestly from our Q4 run rate, which reflects our investments in technology plus some inflation. We said our adjusted EBITDA range is minus $5 million to $10 million positive. So, with all of that above, you can -- and looking at our 2024 results, you 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 increasing as well.

Yeah, 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 Dendrinos with RBC Capital Markets. Please go ahead.

Yeah, 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 maybe debt funding. So, would that be the option to, I guess, continue the growth cadence that you're on right now?

Chris, are you talking about the executive orders and their impact on electric vehicle sales? Is that what you're...

Just on -- if, say, like, the DOE loan was paused and they went -- I guess, took you all to court to try to fight it and not fund it?

Right. Okay. So, yeah, look, we -- as we said before on the last question -- on Bill's question, we feel very confident in the loan. It's perform -- the loan assets themselves are performing very strongly. It's really a good -- it's a good deal for the US government with a lot of protections for the government, so we feel pretty good about it. In terms of funding and cash flow, I mean, we have very strong cash balance. We're starting the year with about $200 million, and so we feel very good about that. Paul, do you have any other comments...

Yeah. So, that's right. So, as we mentioned, we've got around $200 million of cash, including the drawdown we took in January. And when you step back and look at our model, primary uses of our cash are the cash from operations and then for CapEx. So, since we're going to be EBITDA breakeven in 2025, that implies that our operating cash flow is close to breakeven as well. You saw in '24, our cash from operations, we used $9 million, which was a significant improvement over 2023. So, you can cast that forward and say that's more or less breakeven as well in '25. So that leaves CapEx as kind of the swing factor. So, our net CapEx is expected to be $160 million to $180 million, which includes buildouts not only for the 2025 stalls, but also for 2026 vintage as well. And we have the option, of course, to either speed up or slow down the deployment of 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 AV charging station side, those private stalls. Can you maybe, I guess, talk about the strategy there and how does that compare with the public network stations? Thanks.

Yeah, absolutely. Yeah. Look, so, we've been building and operating these dedicated sites, dedicated hubs for autonomous vehicle fleet partners, actually for a number of years. Last year, we more than doubled the number of stalls that are in -- that are operational, these dedicated stalls from -- to 110, and that's why we actually separated it out from the public network. We -- these are -- we received a fixed dollar amount for the -- on a monthly basis for the stalls where the electricity is pass-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 -- at the end of last year, we actually think that this autonomous vehicle robotaxi space could grow quite a bit faster over the coming years than 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.

Our next question comes from the line of Douglas Dutton with Evercore ISI. Please go ahead.

Thank you. Hey, team. Thanks for having me on. I was just curious about how the strategy has maybe shifted on the 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?

Yeah. Look, let me just comment a little bit on the impact on electric vehicle sales. As I said in my remarks, our business is driven by the difference between the supply of DC fast charging and demand in terms of overall VIO, not annual sales. And that supply has exceeded demand for years. It's why we've seen a four-fold 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 we've got that supply 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, this is actually a pretty resilient business model. In terms of your specific question around geographic expansion, we are increasing the share of our store growth and 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're following demand. We're going to build -- our network plan is designed to follow demand, and that's really what we're doing.

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

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

Thanks. Hey, good morning, everybody. I was hoping we can 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 personal 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 chargers from China. I think as you know, we -- our supply chain is really not impacted by Canada or Mexico tariffs. Our 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 delta between supply of EV versus -- demand of EV versus supply of charging infrastructure, and that's been an imbalance for years and will continue to be. And that's really what's driving our growth.

Thanks, Badar. 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 where you stand with some utilities and some jurisdictions on extending or instituting demand charge holidays? And do you think there's maybe a risk over time as there's obviously significant expected load growth in the US for the first time maybe ever on AI data centers, et cetera? But maybe how does that potentially impact, like, demand charges and demand charge holidays? Thanks, guys.

Yeah. We've got demand charge reductions or holidays across the vast majority of our kilowatt hours today. And as utilization and throughput per stall on a per site basis continues to grow, clearly the impact 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 throughput per stall continues to grow, as you've seen throughput per stall has grown five-fold, 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. Makes sense. Thank you.

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

Hey. It's Pat on for Stephen Gengaro. 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?

Yeah. Look, let me -- I'll ask Paul just to comment on 2025, but, I mean, 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 26%. So, we're already in that range. As you saw in one of the slides, two-third -- 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 to be -- 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 that -- 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 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 350 kilowatt chargers. Those two things are what drives the volume in our -- price times volume formula. But, Paul, do you want to comment on 2025?

So, yeah, without repeating too much of what you just said, Badar, but if you look at our utilization from our -- from the slide that we showed in our unit economics, we went from 19% in 2023 -- the end of 2023 or Q4, to 24%. So, 5 point increase in one year. As Badar mentioned, our guidance of 23% to 26%, we're already in the range now. So, when you're modeling for 2025, I'd encourage you to put utilization at the highest end of the range. And as you mentioned, we may revisit that in -- later on this year as we get more information about the performance of our stalls. And then, charge rates, similarly, increasing from 43 kilowatts to 47 kilowatts, in Q4 '24. So, up for -- we continue to see that increasing as newer vehicles with faster charge speeds hit the market. And we deploy more 305 kilowatt chargers out there too, which are able to accommodate that. So, we see a big increase there or an increase there throughout 2025. As Badar mentioned, in terms of -- it's not just utilization, it's one thing that we're learning as well. The time of day is just as -- almost just as important in terms of how we manage utilization. So, we're finding, in some cases, we have chargers deployed where they're being utilized at 15% utilization at 3 o'clock 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 utilization going forward.

All right. Great. That's very helpful. Just to follow-up, I know in the past you said non-Tesla vehicles make up the majority of the throughput on the network, but just curious if you've seen any uptick in Tesla vehicles charging on the network, especially since it opened its network to the other OEMs?

Yeah. I mean, look, so Tesla vehicles generally, as you know, as we've said before, don't charge -- haven't historically charged our network. With the introduction of the NACS cable, [Stephen] (ph), 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 EV VIO. Our first site with NACS 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 NACS cable deployed, and we're seeing -- clearly, we're seeing Tesla vehicles charge on our network at higher rates than 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 NACS cables throughout the course of this year.

Great. Thanks a bunch. I'll turn it back.

Our next question comes from the line of William Grippin with UBS. Please go ahead.

Hi, William.

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 to what extent could that drive some cost reductions for 2025 vintage CapEx? And could that potentially offset the loss of 30C tax credits should that actually happen?

Yeah. I mean, look, the -- I mean, let's just quickly just take a step back on the 30C tax credits. These are -- this is, I think, less than 0.5% of the total cost of the IRA. The 30C, it's their technology neutral. They're bipartisan supported, 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, that's 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. We -- 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 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 or 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% improvement.

Got it. And then, just wanted to follow-up here on the pilot side with the NACS 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 Tesla vehicles charging, 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 year. We're thrilled that we...

All right. Appreciate the time.

Yeah. Go ahead.

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

Hey. Not to belabor the Tesla NACS 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 you -- so in terms of the deployment of NACS connectors, yeah, we are -- as a company, we charge all electric vehicles. That's been our policy and our philosophy and our strategy. We -- 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 actually simplifies the customer experience. And so, we're excited about deploying NACS cables. I've been talking about it all year last year where we've got the first site now with the NACS cable as a pilot. We expect to be able to deploy those NACS 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 throughput without any increase in VIO. 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 a direction 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 Ionna move from beta to national release and talking about putting a thousand fast-charging stalls out there this year, what are your kind of -- like, at a 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?

Yeah. I mean, this is -- I mean, I think we've 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. We know 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 Ionna, you're right. It's been almost a couple of years since Ionna was announced, and 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 sophisticated network plan and site selection algorithms. It doesn't appear to us that those sites are sites that that we would look at in terms of maximizing utilization. And -- but, again, many of these charging companies have goals other than utilization. Once, chasing NEVI awards, for instance, are clearly not focused on utilization because there's not a lot of growth of utilization on highways. And Ionna may indeed have other goals beyond utilization for the network. Either way, for us, increasing charging supply results 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 US 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. Thanks very much, everybody.