EVgo Inc - Ordinary Shares - Class A Aktie

Good day, and thank you for standing by. Welcome to the EVgo Q1 2026 Earnings Call. [Operator Instructions]

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Heather Davis, Head of Investor Relations. Please go ahead.

Good morning, and welcome to EVgo's first quarter 2026 earnings call. My name is Heather Davis, and I am the Vice President of Investor Relations at EVgo.

Joining me on today's call are Badar Khan, EVgo's Chief Executive Officer; and Keefer Lehner, EVgo's Chief Financial Officer. Today, we will be discussing EVgo's first quarter 2026 financial results and our outlook for the year, followed by a Q&A session.

Today's call is being webcast and can be accessed on the Investors section of our website at investors.evgo.com. The call will be archived and available there, along with the company's earnings release and investor presentation after the conclusion of this call.

During the call, management will be making forward-looking statements that are subject to risks and uncertainties, including expectations about future performance. Factors that could cause actual results to differ materially from our expectations are detailed in our SEC filings, including 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 Investors 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 definitions and applicable reconciliations to the corresponding GAAP measures can be found in the earnings materials available on the Investors section of our website.

With that, I'll turn the call over to Badar Khan, EVgo's CEO.

Thank you, Heather. EVgo's first quarter was in line with our expectations. We delivered solid results, headlined by record first quarter revenues of $110 million, a 45% year-over-year increase.

Increased revenues were largely driven by the continued growth of our operating network, eXtend and 2 new contracts at dedicated AV hubs locations. Throughput on our public network increased to 91 gigawatt hours in the quarter. Stores in operation across the EVgo network were 5,280 with over 200 new stores added in Q1.

Adjusted EBITDA was negative $7 million in the quarter as we continue to invest in the long-term growth of the business by expanding our operations and deployment teams and our next-generation charging architecture.

We ended the quarter with a healthy balance sheet with $150 million in cash. We continue to make great progress on our next-generation charging architecture that we expect to start rolling out to the field by the end of the year. This will not only deliver improved reliability and an enhanced customer experience, but is also expected to lower CapEx per store and will further underpin our long-term unit economics that we believe will result in recurring adjusted EBITDA generation at the $0.5 billion level by 2030.

We've achieved some noteworthy milestones on the next-gen architecture, including completion of the first system build of the power cabinet and dispenser, successful vehicle charging with EVgo developed controllers and firmware and the start of long-term reliability testing.

EVgo has excellent partnerships with rideshare companies who we believe partner with us in part because of our enormous scale advantage versus the dozens of smaller operators and because of the value their drivers get on the EVgo network. Rideshare drivers are already around 1/4 of our network throughput and we continue to deepen our partnership with Uber, where we are working towards finalization of an agreement where they guarantee a minimum level of utilization that incentivizes us to build more and larger charging stations in key urban metros.

This would not only meet rising demand from the segment, but further accelerate the electrification of rideshare. We have excellent relationships with our site host partners from grocery stores to retail stores.

And this quarter, we had a record number of new stores signed under long-term leases, around 3x the same quarter last year, most of which will come online 9 to 12 months after signing.

This level of site lease signings is an indication of the value our site partners believe EVgo brings and their confidence in our ability to deliver fast-charging stores as we continue ramping up store deployments. We have over 100 stores operational with NACS connectors and continue to target having over 500 NAC stores available across the network by the end of the year at approximately 15% of our sites.

Strategically, by deploying NACS connectors across our network, we are effectively more than doubling our addressable market where drivers with cars with NACS inlets can charge without an adapter.

And importantly, we've agreed an amendment to our loan with the DOE Office of Energy Dominance Financing with the current administration, which we believe increases certainty and reduces complexity of go-forward draws and further enhances our already strong liquidity profile.

DOE's loan program has historically been designed as a bridge to commercial finance ability. In the case of EVgo, this is exactly what happened. Less than a year after closing the DOE loan, we closed our commercial bank financing of up to $300 million.

The combination of the amended DOE loan and commercial bank facility gives EVgo the capital it needs to deliver on our previously communicated build targets. EVgo successfully drew under the loan 3 times in 2025 and this amendment is a reflection of 2 things: first, the success we've had in securing additional private market funding and acknowledgment that debt -- additional debt capital is available to EVgo in the commercial markets.

And secondly, it reflects the current administration's view of the importance of this essential infrastructure build-out across the U.S. Our fast-charging infrastructure is performing well and better than originally modeled when the loan was underwritten.

Much of the loan remains the same and I'll highlight a few key updates. The size of the loan has been updated to $750 million, which includes $625 million in borrowings and up to $125 million in capitalized interest.

EVgo can draw up to 80% of total eligible project costs. However, because the loan is currently overcollateralized, we can draw up to 95% of eligible project costs on an incremental basis until total leverage hits the 65% loan-to-value ratio.

A redundant construction risk-related reserve account of $35 million is eliminated because debt funding occurs after store completion, which reduces restricted cash for EVgo, further improving our liquidity profile.

On May 1st, EVgo received our next advance of $81 million, bringing our cash balance on May 1st to $223 million. Other key terms remain the same as the original agreement. The availability period remains 5 years with a term of 17 years. The interest rate on the loan remains very attractive at treasury plus approximately 1.2% and we're able to request advances quarterly.

We already have the strongest balance sheet we've had in many years and these changes result in even more free cash available to be reinvested into the business. EVgo has ample liquidity with the DOE loan and our commercial facility.

And as of May 1st, we currently have up to $640 million available principal capacity on our 2 credit facilities, inclusive of the incremental availability. Between the DOE loan and our commercial credit facility and reinvestment of profits, we expect to have 12,500 to 13,900 EVgo public sold by the end of 2029, which is unchanged from our previously stated build targets.

Given the strong recurring and high-margin cash flows being generated from our charging infrastructure, we believe and the market has acknowledged that this is an infrastructure asset class that should be levered.

We will continue to explore other nondilutive financing, all while maintaining a healthy balance sheet to reduce our cost of capital to even lower levels or allow us to grow faster or both. We believe the long-term growth outlook for EVgo remains very attractive.

Projections for 2030 EV VIO are near $16 million, representing a 20% CAGR. Recent volatility in the oil market makes the ongoing TCO for EVs even more compelling for American drivers. Sales of new EVs in Q1 are rebounding from the Q4 lows and are expected to accelerate throughout the year, adding to VIO.

The market for used EVs has been very strong and we can see that over the past few quarters, quarterly sales of used EVs has approached the 100,000 units level with Q1 just under half the level of new BEV sales. Q1 used EV sales have more than doubled versus 3 years ago and are projected to continue to accelerate going forward.

Drivers of used EVs are often customers of public charging networks. This is because used car buyers are more likely to live in multifamily housing and multifamily residents tend to charge more frequently on public networks.

As a result, we expect to see the serviceable addressable market for public fast charging to increase faster than overall VIO growth, with growth in public fast charging remaining more resilient compared to growth in the overall EV market.

Prices for used EVs have nearly reached parity with their ICE counterparts, given the surge in EV leases following the passage of the IRA. Approximately 1.5 million leases are expected to expire between 2026 and 2028, resulting in a significant number of these cars switching hands from their original owner to an owner that is more likely to utilize public fast charging.

As a reference, there's no reason why the battery electric vehicle market over time will not resemble the broader automotive market, where the vast majority of all cars on the road are used. This is a significant tailwind for the business as it was not long ago that a secondary market for EVs did not exist.

So not only do we see enormous growth in overall BEV/VIO, but we expect that the average car will be charging more, both of which result in a favorable long-term outlook for EVgo.

Now I'll turn it over to Keefer to share more details on the quarter and EVgo's 2026 outlook.

Thank you, Badar. We ended Q1 with 5,280 stalls in operation, a more than 3x increase compared to the end of 2021. We added 200 new total stalls to the network in Q1 2026, including 100 new public EVgo-owned stalls.

Our customer base continues to grow and we look forward to welcoming more native NACS drivers to our network as we deploy more sites in 2026 with NACS connectors. Total energy dispensed on EVgo's network was 373 gigawatt hours for the trailing 12 months, a 21% increase from the TTM period ended Q1 2025.

Charging gross margin was 39% over the last 12 months, expanding by 2 percentage points over the prior year's TTM.

Adjusted EBITDA margin improved to 3% on a trailing 12-month basis as we get closer to the operational inflection point where charging network gross profit alone is expected to cover all of our G&A costs.

Our throughput on the public network during the first quarter was 91 gigawatt hours, a 10% increase compared to last year. Throughput per stall per day was 257 kilowatt hours in the quarter.

Q1 2026 throughput was impacted by the ongoing maturation of the record high number of new stalls deployed in Q4 2025 as we elected to select sites with slightly lower throughput potential in order to capture a higher amount of state grant funding as expected lifetime economics were attractive.

It was also driven by lower usage of our legacy equipment, several severe winter storms as well as seasonally lower vehicle miles traveled.

Revenue for Q1 2026 was $110 million, which represents a 45% year-over-year increase with growth across all 3 revenue categories. Total charging network revenue was $56 million, an 18% increase versus prior year, driven primarily by a larger operating network, representing our 17th consecutive quarter of double digit year-over-year charging revenue growth.

eXtend revenue was $33 million, delivering growth of 41% over the same period in 2025, driven by an increase in construction revenues and equipment sales.

And AV and ancillary revenue was $21 million, up over 300%, driven by gain on sales for 2 dedicated AV hubs locations. It's important to note that almost half of the anticipated 2026 AV ancillary revenue was recognized in the first quarter.

Charging network gross profit was $20 million, a 15% increase compared to the prior year. Charging network gross margin was 36%, a percentage point lower than last year.

First quarter adjusted gross profit was $30 million, up 17% against the prior year. Adjusted gross margin was 27% in Q1, a decrease of 660 basis points over the same period in 2025, driven primarily by higher non-charging revenue contribution.

Adjusted G&A for the quarter was $37 million, an increase of 19% compared to prior year as we are investing in network scale and accelerating cell deployment. As a percentage of revenue, the first quarter of 2026 was 34% compared to 42% in the first quarter of 2025. The above resulted in an adjusted EBITDA loss of $7 million in the first quarter of 2026.

Turning to our outlook and guidance for 2026. Our new stall guidance remains unchanged from the last quarter with 1,400 to 1,650 new stalls expected to be added over the year, including 350 to 400 eXtend stalls, approximately 100 of which were deployed in Q1.

The growth in public stalls deployed is expected to be around 70% year-over-year and the vast majority of the 2026 public build plan is expected to be deployed in the back half of the year with a significant weighting towards Q4.

We are reaffirming our recently provided 2026 total revenue and adjusted EBITDA guidance of $410 million to $470 million and negative $20 million to positive $20 million, respectively. Charging network revenue should be around 70% of 2026 total revenue.

Charging revenue is expected to increase each quarter sequentially and on a year-over-year basis. At the midpoint, charging network revenue are expected to be up 40%.

eXtend revenue for 2026 is expected to be $80 million to $90 million. AV and ancillary revenues are anticipated to be $40 million to $50 million for full year 2026 with just under half that amount realized in Q1.

Adjusted G&A for the year is still anticipated to be $150 million to $155 million as we continue to invest in our scale and deployment of new chargers. Q1 and Q4 are expected to be the strongest quarters for the non-charging business, eXtend and AV and ancillary, representing approximately 75% of our non-charging revenues.

As a result, we expect Q2 to be our softest quarter of the year with revenue and margins leading to an estimated Q2 revenue of $75 million to $85 million and an adjusted EBITDA loss of $12.5 million to $7.5 million.

We expect modest sequential improvement into Q3. Q4 is expected to be our strongest quarter of the year by a wide margin. We should drive improved incremental margins and sustainable profitability on a go-forward basis.

With that, we will open the call to Q&A.

[Operator Instructions] Our first question will come from the line of Chris Dendrinos of RBC Capital Markets.

Maybe to start out here and I'm just kind of looking at the charging network performance and 2 things stand out. I think you kind of talked through a little bit of the dynamics around the lower throughput this quarter, but maybe talk to the cadence of that increase going through the rest of the year?

And then separately, just on the margin performance in that segment as well. Are you seeing some of the, I guess, call it, leverage or operational leverage points that you're kind of expecting to see in the longer-term outlook?

Yes. Let me just touch on the first point and just kind of reemphasize for the quarter, daily throughput per stall, it's about 3.5% lower than last year. And that's really driven by 3 or 4 things, none of which really are long-term issues.

As we said on the last earnings call, we did have more severe winter storms this quarter than we saw in the same quarter last year. We also had a record number of stores deployed in Q4 that they always take -- new branding stores usually take 3 to 6 months to ramp up.

So that's a little higher impact this quarter than prior quarters just because of the record deployment we had in Q4. And we also mentioned a couple of times last year that many of these Q4 deployments in 2025 came with much higher CapEx offsets which is obviously great from a returns perspective, but they also come with lower productivity in throughput for the first year or 2.

So that's really what we're seeing. One additional thing that we're calling out here is that we are seeing lower throughput from our legacy 50 and 100-kilowatt store, especially as we're actually putting in a whole bunch of faster 350 across the network.

I think the good news is that today, in Q1, about 65 -- almost 65% of our throughput is already 350-kilowatt machines. That's up from kind of low 20% range 3 years ago and it will be in the 95% range by 2030.

So in the long term, the performance of the kind of sub-350 just becomes immaterial. So I'd say none of these factors really are issues in the long term.

For the full year, we do expect daily throughput per store to grow versus last year at the bottom end of guidance in the kind of mid-single digit percentage range to high teens in percentage range growth over '25, top end of guidance, that hasn't changed since the last quarter.

Keefer, do you want to just address the market?

Yes, to follow up on the second part of your question. We did experience slightly lower charging network gross margin in Q1. It was down 1 percentage point on a year-over-year basis.

We did have higher ASP in Q1. It came in right around $0.61 on a fully loaded basis, which was offset by increased energy costs and solid payment costs given some of the noise that we experienced in the quarter.

We don't see that as kind of a structural or long-term shift in the cost structure. Last quarter, we did provide long-term outlook of a 50% to 60% CAGR for gross network -- or gross margin at the charging network level and we wouldn't really expect that to be changing as we look out to the future.

Got it. And then maybe just as a follow-up, on the NACS deployment, I think previously you kind of spoke to slightly lower charging rates on that segment of the market initially. Are you still kind of seeing that? Or is adoption on the NACS portion of the network increasing?

Yes, Chris, it's -- we are just taking a very quick step back with NACS. We're really very excited about deploying NACS stores across the network because effectively, we double our addressable market for people choosing to charge their vehicles without an adapter, which is the majority of people.

I said last quarter that we deployed NACS like a little pilot 100 stores in kind of the fall of last year. And since then, we've seen throughput on those NACS stores rise. That's continued to rise since we talked about this last quarter.

So we still remain very excited about the deployment of NACS stores. They are still below the level of throughput that we see in our CCS stores.

As I said last time and saying again this time, it does take customers who have not been used to charging in our network to become familiar with our network and to charge if they've got these NACS cables. Tesla drivers continue to charge at a higher rate every month.

So we're very excited. And so we're very much intending to continue with the rollout of these NACS cables. We'll look to do about 400 more to get to around 500. That will be about 15% of our sites.

That will be pretty broadly spread between Q2, Q3 and Q4. We do expect that within maybe 2 or 3 years for all of our sites to have both NACS and CCS cables. And that's the point where I'd look at the addressable market having doubled. So hopefully, that answers that question.

And our next question will come from Andres Sheppard of Cantor Fitzgerald.

This is [ Anadan ] for Andres. Congrats on the quarter. So I wanted to touch on a little bit of the AV charging. So with Uber partnering with a variety of OEMs for EVs and we noticed you were named as a partner as well, we were wondering maybe if you could give us some granularity on what you expect from charging demand for yourselves on this front from the AVs?

Yes. Yes, look, I think that the sort of autonomous vehicle space, I remain of the view that it is a very interesting and potentially very significant source of upside to the forecast that we have put out previously. I think that the AV space grows as pretty many people are expecting.

We've been operating dedicated sites for autonomous vehicle partners for a number of years. We talked about it in the last quarter, last call. We have separated out the number of dedicated hubs and stores that are dedicated hubs for AV partners for over a year now. We expect that we'll add another 50 to 75 stalls. We did get a little gain on sale from some of the stores that were in operation in the last quarter in Q1.

I will say it's still -- we're still in the infancy of the potentially huge market opportunity. We're evaluating the best contract structures. As you know, the contract structures that we have today are really long-term contracted cash flow, which represents kind of good margin with not a lot of risk for us.

And so as this grows, we'll be looking at different contract structures that make sense for both ourselves and the AV partners or maybe also continue with what we have today.

I do expect that over the long term or midterm or long term, just as we've seen with rideshare, where really I think EVgo has become the partner of choice for rideshare companies, I do expect that there's really no reason why we wouldn't become the partner of choice for AV companies, just given our scale, the balance sheet, our emphasis on reliability and so on.

Got you. I appreciate the detail. And maybe as a quick follow-up, with respect to the DOE loan amendment, you talked about this for quite a bit on the call. You guys eliminated the cash trap, received an $81 million draw on May 1st.

Maybe can you walk us through how that amendment changes your practical liquidity, maybe the timing of your draws and ability to fund the accelerated owned and operated build-out?

Yes. Look, [ Anand ], just a comment here. I'm really pleased with where we are with this loan with the DOE. If you compare us to where we were a year ago, so today versus last year, this time last year, it's really just quite a change.

A year ago, we had $170 million of cash on the balance sheet as of Q1 and we had $1 billion loan with the prior administration that was largely undrawn. And I would get questions on these calls about whether the current administration supported it, even though the performance was very strong.

A year later, we have an agreement that's signed with the current administration. We continue to have a great productive collaborative relationship. It's now been drawn on 4 times.

The principal is reduced by $425 million, but we've -- since last year, we've also got a commercial bank facility for up to $300 million. I think more importantly, we've demonstrated the bankability of the company with this continuous inbounds from people interested in financing the business.

I think because it's a new asset class and maybe also because we're probably the only ones in the asset class that's actually financeable, today, as of May 1st, we have $223 million in cash, including the $81 million that we received last week with up to $640 million of remaining capacity between these first 2 facilities.

That means we have enormous runway to continue to build out this infrastructure really to a point where we're generating adjusted EBITDA in the hundreds of millions.

And I think as you say, in the short term, some of these amended terms will result in better liquidity to really an already very strong liquidity profile. So I'm really quite thrilled with where we are today.

In terms of your question around -- in terms of deploying capital, we just received $81 million from the DOE. We've got a very strong balance sheet today. We will be disciplined in our approach to capital allocation with the timing of advances just driven by balance sheet needs, which you can see is quite strong.

I think one of the great attributes of this loan is that there's no time limit on when we request advances other than the 5-year availability period.

So between that, the commercial bank facility, the fact that we're able to advance at a higher rate and if you translate -- if you kind of work out that math, it's about another $20,000 per stall that we're able to advance versus what we had before. We -- there's really no concerns that we have at all about financing the build program we previously discussed or near-term liquidity.

[Operator Instructions] Our next question will be coming from the line of Chris Pierce of Needham.

Badar, I just want to get a sense, you highlighted the EVs in the deck and you spoke about it on the call a little bit. Is there something specific you need to do to market towards these people?

And/or is this sort of just a sweet spot of customers that are potentially going to be using the network? And have you seen anything? Or is it too early to sort of see a ramp in new customers from these new EV owners that are buying used EVs?

Yes. Look, I think that there's a few things in here in terms of marketing to these customers. We -- I think, as you know, we have more -- the same or more charging sessions on our network than everybody else in the industry combined with the exception of Tesla and Electrify America.

And the reason for that is that we've really spent a lot of time building a very productive customer engagement sort of platform. We've got the ability to identify drivers of electric -- battery electric vehicles. We know how to reach out to them.

I've mentioned before in previous calls that we've been deploying AI agents that are increasing our level of sophistication in how we reach out to customers and that's why we've got such phenomenal engagement and demand on our network versus pretty much everybody -- almost everybody else in the space.

In terms of used electric vehicle drivers versus new EV drivers, there's no distinction. We will deploy the same methodology that's delivered such great success for us for used EV drivers as new EV drivers.

I think what's really interesting that we just -- that we're really pointing out here is that for us, it's not just about the growth in battery electric vehicles, used VIO that drives the business. It is expected to grow. It has grown fourfold.

It will likely grow another 2.5 to threefold over the next 5 years. I do think these 2030 forecasts swing like a pendulum. They were -- the 2030 forecast was 30 million vehicles 3 years ago. Today, it's 15 million or 16 million.

But what's important for us is how many of those vehicles are charging in public fast charging. Rideshare electrifying means they'll charge more at public fast charging, charge rates mean they'll charge more at public fast charging.

And as vehicles go from new to used, they'll charge more at public fast charging. What we're seeing is that used vehicle -- used EV owners tend to live in multifamily housing. And from our own data, we can see that drivers who live in multifamily housing charge 1.5x more than drivers who live in single-family housing. And so I'm really quite excited by this.

There's probably around 1 million used EVs out of the roughly 6 million today with all of these leases rolling off post the IRA, we're looking at maybe up to about 3 million used EVs out of total EV VIO 3 years from now, which is probably 25%, 30%.

And so if you look at the market, there's no reason why the EV market won't resemble the broader market where the vast majority of cars are used. And so I think that represents just another tailwind that I think it's worth bringing out when we think about our long-term growth prospects.

Okay. Perfect. And just one. I mean, I think complexity is the wrong word, but if you look at the model, you've got the core charging business, then you've had the eXtend business, which was sort of in the end sort of kind of -- we're in the later innings of that rolling off so investors can focus on the charging model.

If we think about the AV line and the ancillary line, is there a way to kind of know what that's going to look like? Could you -- could that be a construction business similar to eXtend and then you have gain on sale when you flip it back to the end user?

Or should we think of that -- like I just want to understand as AV grows, will we get to a point where that sort of becomes a new [Technical Difficulty] and you've got to sort of guide in different pieces? Or like when can charging revenue be just the story a little cleaner for new investors looking at the model?

Yes. Well, look, if I just take that apart, you're right, the eXtend business has been a very valuable source of revenue for the last couple of years and will be for this year, too, and for a portion of 2027.

But at some point in 2027, the eXtend -- the majority of the revenue from eXtend will sort of drop off. It will become O&M, which will be quite a bit smaller.

Charging revenue, I think you just said that we've had the 17th consecutive quarter of year-over-year growth. So we will continue to see the charging revenue, the charging network just continue to grow quarter-over-quarter over the next several years.

I think this AV piece is really interesting because as you know, Chris, and I think many people have commented, there's a significant amount of capital that needs to get deployed to build out this autonomous vehicle opportunity from the vehicles themselves, the technology in the sort of autonomous vehicle technology whether it's LiDAR or elsewhere for rideshare will be the capital required for the technology stack as well as fleet operations, capital required for charging.

Our perspective is that that's a ton of capital required to get deployed. We have the capital available for a piece of that, which is the charging infrastructure. And we're quite excited about it because we're such a large player doing this sort of charging infrastructure.

We -- the contracts that we signed to date are these long-term contracts that have contracted cash flow. So we've got -- we're generating $1 per stall per month, if you will. And that doesn't have to be the contract structure for this space going forward.

So we're quite excited by it because these are likely to be very heavily utilized vehicles that will have very strong demand in our network. I think that I would be open to exposure to utilization and throughput from this space.

So it may look like a -- look a little more like our regular charging business as opposed to, as you're saying, a construction business like eXtend.

We're in the early innings of this. As you can see, we've built a very strong competitive advantage with rideshare where we're really the kind of partner of choice for rideshare companies.

I see no reason why we wouldn't be a partner of choice for the AV companies, many of whom we've been working with for years already.

And I would now like to turn the conference back to Badar Khan for closing remarks.

Great. Well, thank you, everyone. EVgo had yet another strong and record quarter. We're expecting 2026 to be an inflection year with around 70% growth in new public stores added, supported by strong site post and rideshare partnerships.

We continue to see a very strong long-term growth outlook and we're pleased to have reached an amended agreement with the DOE, allowing us to scale the company to that $0.5 billion or more in adjusted EBITDA by 2030. I look forward to sharing our progress with you on our future calls. Thanks very much, everyone.

And this concludes today's program. Thank you for participating. You may now disconnect.

My name is Joe, 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 2025 Earnings Call. [Operator Instructions]. I would now like to turn the conference over to Heather Davis, Vice President of Investor Relations. You may begin.

Good morning, and welcome to EVgo's Fourth Quarter and Full Year 2025 Earnings Call. My name is Heather Davis, and I am Vice President of Investor Relations at EVgo. Joining me on today's call are Badar Khan, EVgo's Chief Executive Officer; and Keefer Lehner, EVgo's Chief Financial Officer. Today, we will be discussing EVgo's Fourth Quarter and Full Year 2025 financial results, followed by a Q&A session.

Today's call is being webcast and can be accessed on the Investors section of our website at investors.evgo.com. The call will be archived and available there along with the company's earnings release and investor presentation after the conclusion of this call. During the call, management will be making forward-looking statements that are subject to risks and uncertainties, including expectations about future performance. Factors that could cause actual results to differ materially from our expectations are detailed in our SEC filings, including 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 Investors 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 Investors section of our website. With that, I'll turn the call over to Badar Khan, EVgo's CEO.

Thank you, Heather. When I first joined EVgo as CEO at the end of 2023, we set a goal to be adjusted EBITDA breakeven in 2025. And I am pleased to say we achieved that goal in the fourth quarter. This significant milestone demonstrates the growth, scale, operating leverage and durability of the EVgo business and the dedication and hard work of our team.

As I'll touch on later, we're now focused on our next milestone of achieving the real operating leverage inflection point, which will allow us to further accelerate adjusted EBITDA growth and margin expansion. EVgo delivered another excellent year of results, with total revenue of $384 million, a 50% increase over last year and record charging network revenues. We ended 2025 with 5,100 stores in operation following a very large store deployment of 500 new stores in the fourth quarter. Total [indiscernible] dispensed in our public network increased over 30%, which is more the national growth. Our pilot, approximately 100 3,400 connectors, also known as NACS, during 2025 was successful, and we'll be rolling out over 400 more NACS connectors in 2026, both of new sites and retrofits at existing sites with a goal of effectively doubling our addressable market over time.

Given the returns we expect to generate from these tools, we tried to increase our public stores deployed by over 50%. This increased pace for deployment significantly increasing the number of NACS connectors and our next-generation charging architecture represent real investments in 2026 to drive longer-term value creation. EVgo continues to offer drivers more choices on where to charge their AVs as our own public network and extend network expands across the U.S.

Today, drivers can find over 1,200 EVO operated stations across 47 states. EVgo is the third largest and second fastest-growing network in the U.S., serving all EV models with key OEM, [ rideshare ] and [ psychost ] partnerships, and I look forward to expanding our network even further in 2026. Our network stands at over 5,100 stores and is one of the most highly used EV charging networks in the United States.

While we know charging station deployments have grown significantly over the last several years, the reality is that the usage of America's EV network is disproportionately concentrated amongst 3 largest charge point operators for [ CPOs ], EVgo, Tesla and [ Electrify America ]. This is according to an independent third party. The concentration of consumer demand among these top 3 operators demonstrates the importance of network effect, an already established customer base, which, in our case, encompasses 1.6 million customers and scale as a driving force behind this unmatched network utilization.

EVgo's fourth quarter utilization was 24% which is higher than the average of the top 3 and nearly 5-fold higher than the large group of subscale CPOs, most of whom see usage in the single digits. Personal demand growth for EVgo's charging network continues to outpace the industry. Since Q1 2024, EVgo's utilization has grown 4 percentage points, while the rest of the industry excluding the top 3 has actually declined by 2 percentage points. In other words, according to this third-party data, eVgo has emerged as a clear leader in the EV charging space in the United States, representing outsized consumer demand for our network as compared to the competition.

It's clear to me that EVgo has a strong competitive moat that is enduring and continues to strengthen over time. We've developed superior, AI-driven and scalable site selection algorithms and host partnerships that allow us to build charging stations where drivers want to be, conveniently near where people shop, eat and run their daily errands. We're continuing to scale with strong grocery and retail partnerships, including an expanded partnership with [ Kroger ], which we announced earlier this year.

EVgo now has almost 14x the average number of stores of the rest of the industry outside the top 3 CPOs. We have partnerships with rideshare companies such as Uber and Lyft, we believe partner with EVgo in part because of our enormous scale advantage versus a dozens of smaller operators and the value drivers get with discounted rates on the EVgo network. As you may have seen recently in the news, EVgo and Uber are in discussions to expand our partnership to meet rising demand for our services from rideshare drivers. We developed and are continuing to deploy leading customer engagement tools and capabilities to enhance our customer experience.

The investments we're able to make in our EVgo app and other technologies are only possible given we have the scale, network effect, talent and capital to build the tech stack. Of note is [ Auto ] charges, where [indiscernible] drivers enroll their vehicle and payment method. And when they pull up to a charger, they simply plug in and charge. It's a seamless customer experience and 30% of our sessions are now initiated with [ AutoChargeP+]. EVgo continues deploying more 350-kilowatt or faster chargers that now make up the majority of our network offering full charge in under 5 minutes, compared to just 19% for the rest of the industry, excluding the top 3.

Our products and hardware teams work tirelessly to improve the charging experience, including ongoing maintenance campaigns targeted at improving reliability on our existing chargers and through our next-generation charging architecture.

Finally, unlike many in the industry, we have the [ nondilutive ] financing in place to build at scale. This competitive vantage is not solely driven by EVgo's superior site selection but rather the combination of all the factors I've described built over 15 years of doing what we do.

In the second half of 2026, we expect to reach a critical milestone in the evolution of the business, achieving a key operating leverage inflection with gross profit from our charging operations, without any contribution from our non-charging business covering adjusted G&A. At the same time, we're intentionally investing in 3 key areas that we believe will strengthen the long-term competitiveness, resilience and value of the EVgo platform.

We will build on our already significant scale advantage by ramping up our deployment teams to meet market demand, further separating ourselves from a dozen to smaller operators and significantly increased the number of new owned stores we bring online in 2026 with even higher growth planned in 2027. We'll roll out more NACS connectors this year, doubling our addressable market in the long term. This represents an investment in 2026 as we're trading highly productive [ CCS ] stalls with [indiscernible] where performance is lower than CCS initially, but growing over time as NACS drivers discovered these [ tools ] through our customer marketing campaign.

And our investment in next-generation charging architecture improves the fundamentals of the business scale. It simplifies the hardware, which uses failure points, improves reliability and lower operating costs over time and also giving us the flexibility to support higher power vehicles and standards like NACS and ultimately delivering a better customer experience. That combination is critical to sustaining high utilization and expanding margins as the EVgo network grows.

Over the last 2 years, we've deployed over 1,200 stores on our network each year, including our extended network. In 2026, we expect this will increase to 1,400 to 1,650 and importantly, we plan to increase the number of new, old and operate installs deployed by over 50%. Approximately 2/3 of these tools will be deployed in the second half of 2026.

We are targeting cash and cash paybacks of 3 to 5 years with our highest performing top 15% of stores achieving paybacks in as little as 1 to 2 years. These strong returns support our ability to continue accelerating store deployment, enabled the nondilutive financing we have in place that positions us to further scale our build-out in 2027 and beyond.

Our autonomous vehicle partnerships remain an important source for further growth and potential upside to these forecasts. And as discussed before, new stores from our existing sand partnerships are expected to wind down during 2027, allowing us to transfer build capacity to our owned and operated business.

The industry transition to NACS is an exciting opportunity for EVgo. Over half the EVs on the road today have NACS inlets, mainly Teslas today, but new models from other OEMs are being launched with native NACS. We expect to add over 400 NACS connectors in the EVO network by the end of 2026, allowing drivers, [ charter ] our stores without an adapter at effectively more than doubling our addressable market. In 2025, we deployed about 100 NACS connectors in our existing sites on a pilot basis with the goals of validating the technology and determining how to grow NACS throughput as quickly as possible.

I'm pleased with how the NACS connectors are performing from a technology perspective. I do want to thank our hardware team who worked tirelessly to make these liquid cool cables happen for our fast chargers. EV drivers can find our NACS locations with EVgo [indiscernible] or from the distinctive yellow siege at these sites. Throughput for [indiscernible] is currently lower than our CCS stores on the same side, but we are clearly seeing it grow driven by increasing numbers of tested drivers, charging at these tools. Over the course of this year, we expect to grow NACS per store usage through our customer communications efforts driving awareness. This is an important medium- to long-term goal as native NACS vehicles share of overall [ VIO ] rows.

I've highlighted a number of company-specific sources of competitive advantage. And now I want to turn to some of the industry-wide tailwinds we continue to see driving the share of public fast charging that EVgo also [indiscernible]. Today, we are beyond the early adopter phase of EV with almost 6 million EVs on the road, American drivers and choosing to go electric and EV prices continue to fall relative to ICE vehicles, making EVs more affordable, which in turn makes EV ownership more accessible to more Americas, including to those that live in multifamily housing.

These drivers often don't have access to a garage or private driveway and therefore, are more reliant on public fast charging. In fact, they charge approximately 1.5x more of the EVgo network and those drivers that live in single-family homes. The electrification of ride share is another key tailwind that has been and is continuing to drive the share of public fast charging, right? The drivers are adopting EVs 5x faster than regular [indiscernible] and are more likely to live in multifamily housing or otherwise not have access to home charging and charge significantly more on EVgo's network than the average retail customer.

Companies like Uber, Lyft, have their own targets and incentive programs to help ride share drivers make the switch. And on the policy side, New York City and California, both have policies in place to encourage increased [ rideshare ] electrification each year through 2030 which other states like Massachusetts are also considering.

Over the last 3 years, commercial ride share throughput as a percentage of total throughput on EVgo's network has almost doubled and is roughly 1/4 of EVgo's public network throughput today. We are pleased to have reached an initial agreement with Uber, where they will guarantee a minimum level of utilization and incentivizes EVgo to build a number of new, larger charge stations in key urban locations in San Francisco, L.A., Boston and the New York metro areas. This expanded partnership with Uber is designed to address a key concern amongst electric rideshare drivers, which, in turn, we expect will continue to accelerate the electrification of ride share. I'm excited to share more details of its expanded partnership once it's finalized.

More portable vehicles, increasing number of drivers living in multifamily housing accelerating rideshare explication together with faster vehicle charge rates are all driving the growth of public fast charging and we remain very focused on capitalizing on these exciting tailwinds and to fuel EVO's continued growth.

And finally, EVgo is well positioned to benefit from the growth in autonomous right share. Autonomous speakers are electric and just like human-operated right here, vehicle downtime when AV is charging is lost revenue. So fast charging is key to maximizing their utilization and revenue. Given the amount of technology in these vehicles, they consume more kilowatt hours per mile driven and as a result, are even more relied on as charging. EV market is poised for tremendous growth over the next 5 years with a 20-fold increase in robotaxis expected by 2030.

EVgo has been operating dedicated charging stations for autonomous rideshare fleet since 2020. Today, we have 140 dedicated charging stores for autonomous vehicle company. We're proud to be [ Waymo's ] charging partner in San Francisco and L.A., and we operate charging sites for another AV company as well. While this is a small part of the EVgo business today, our track record, partnerships, competitive strengths, position us well to support the rapid expansion of the AV market, which should, in turn, provide meaningful upside to our business plans over the medium and long term.

Before Keefer shares more detail on our fourth quarter and full year results, I want to take to introduce him to our investors and analysts. We are thrilled for the nearly 2 decades of operational and financial expertise Keefer brings as a public company CFO, [indiscernible] investment banker and private equity investor. He is a great addition to the management team, and I look forward to partnering with him to try shareholder value. Now I'll turn it over to Keefer.

Thank you. Before I begin, I want to share how thrilled I am to be at EVgo as we build the infrastructure this country needs. Since joining in mid-January, I've been working closely with Badar and team to transition into the role I'm excited about the substantial organic growth runway in front of us. My focus is clear: building on the strength of our balance sheet to accelerate profitability as we continue to scale the business for accelerated long-term growth and value creation.

With that, let's jump into our fourth quarter and full year results. Operational install growth is one of the key components of growing EVgo's revenue. We ended Q4 with 5,100 stalls in operations a 3x increase compared to the end of 2021. We added over 1,200 new stalls to the network in 2025, including 500 in just the fourth quarter, representing our largest stall deployment in a quarter ever.

Our customer base has grown almost fivefold over that same period, which contributes to the network effect, driving increased brand loyalty and usage across our ever-expanding network. We've grown the total energy dispensed on EVgo's network in 2025 to 366 gigawatt hours, a 14-fold increase over that same period in 2021.

2025 revenues of $384 million have increased over 17x from 2021 levels. [ Chart Network ] gross profit margin expanded over 2,500 basis points from the mid-teens to the upper 30s, reflecting the meaningful operating leverage of fixed cost of sales on a per sale basis as throughput and revenue per stall continue to rise. Importantly, we again delivered improving profitability with adjusted EBITDA growing at a meaningfully faster rate than revenue, and we achieved a positive adjusted EBITDA margin in 2025 for the first time in company history.

Total throughput on the public network during the fourth quarter was 99 gigawatt hours, an 18% increase compared to last year. Revenue for Q4 was $118 million, which represents a 75% year-over-year increase with growth in all 3 revenue categories. Total charging network revenue was $64 million, a 37% increase versus the prior year. Extend revenue was $24 million, delivering growth of 33% over the same period and ancillary revenue of roughly $31 million was up about 9x. Q4 ancillary revenue benefited from a $26 million contract buyout from a former [ AV ] partner at [ ExSpace ].

Charging Network gross profit and margin in the fourth quarter were $29 million, and 46%, respectively, up 56% and 560 basis points, respectively. This is slightly higher than our run rate given the higher-than-usual network OEM revenues, resulting primarily from branding revenue associated with our GM contract and higher charging credit breakage. Since 2021, charging network gross profits have grown over 32x.

Fourth quarter adjusted gross profit of $60 million was up over 2x versus the prior year. Adjusted gross margin was 51% in Q4, an increase of over 1,700 basis points over the same period. Adjusted G&A for the quarter was $35 million, an increase of 14% compared to the prior year, but as a percentage of revenue, improved from 46% in the fourth quarter of 2024 to 30% in Q4 of this year.

Adjusted EBITDA was $25 million in the fourth quarter of 2025, a $33 million improvement versus the fourth quarter of 2024. Importantly, it excludes the impact of the $24 million ancillary contract buyout, we were still positive adjusted EBITDA for the fourth quarter.

Moving to key highlights for full year 2025. Total throughput on the public network in 2025 was 366 gigawatt hours, 32% increase compared to last year. Revenue for 2025 was $384 million, which represents a 50% year-over-year increase with growth across all 3 revenue categories.

Total charging network revenue was $218 million, a 40% increase compared to 2024. [indiscernible] revenue was $116 million, delivering growth of 34% compared to the prior year and ancillary revenues of $49 million were up 239% year-over-year again, benefiting from a $26 million contract buyout from a former AV partner that exited the space. Charging Network gross profit and margin in 2025 were $86 million and 39%, respectively, up 46% and 170 basis points, respectively, versus the prior year.

2025 adjusted gross profit of $141 million was up 86% versus the prior year. Adjusted gross profit margin was 37% in 2025, an increase of over 700 basis points. Adjusted G&A as a percentage of revenue also improved from 42% in 2024 to 34% this year, further demonstrating the scalability and operating leverage intrinsic to our model. Adjusted EBITDA was $12 million in 2025, a $44 million improvement versus the prior year.

Full year net capital spending for 2025 was $76 million, a 64% increase versus the prior year. 61% of 2025 CapEx, net of capital offsets was spent in Q4 as we deployed over 500 stalls in the quarter and began laying the groundwork for accelerated growth in 2026. For our 2025 vintage, net CapEx per stall was approximately $70,000 and a slight increase from 2024 vintage, which had an elevated amount of capital offsets.

On the financing side, we also borrowed an additional $6 million under our commercial bank facility in December 2025. As mentioned in last quarter's call, we received the latest DOE loan funding of $41 million in October 2025. In total, that brings our commercial bank and DOE loan balances as of December 31, 2025, to $66 million and $141 million, respectively.

Turning to our outlook and guidance for 2026. As we've outlined earlier, we see an opportunity to build the top-tier charging network in the United States. While EV sales in 2026 are expected to be flattish to slightly up from 2025, that still means at least 1.2 million new EVs will be on the road, and BIO is expected to expand 20%-plus year-over-year with new EV sales expected to account for less than 10% of our total 2026 revenue. We're investing in scale, test and deepening our network advantage while focused on capturing strong returns on capital deployment. We expect to accelerate our deployment of EV go public and dedicated stalls this year with 1,050 to 1,250 new stalls being added in 2026 and with the majority of these additions coming in the second half of 2026.

In order to facilitate our accelerated future growth, we're making investments in G&A to support this growth engine. Our expectation of the number of eXtend stalls operationalized this year to 350 to 400 stalls, which will get us through approximately 70% of the contract with the pilot company. We anticipate building the remaining eXtend installs under this contract in 2027, at which point the contract will primarily be tied to operations and maintenance of pilots network. Overall, we plan to deploy 1,400 to 1,650 total stalls in 2026, a significant step-up from 2025, and we expect the rate of deployment to continue to increase as the company grows in 2027 and beyond. For the full year 2026, we expect total revenues of $410 million to $470 million with adjusted EBITDA in the range of negative $20 million to positive $20 million. We also expect significant shape in second half weighting to the year as approximately 2/3 of the 2026 [indiscernible] deployments will go live in the second half of 2026.

The adjusted EBITDA range is informed by variability in expected throughput on our network. The incremental benefit of each kilowatt hour sold has a big bottom line impact. Roughly 2.5 gigawatt hours of retail throughput equates to approximately $1 million of adjusted EBITDA impact. We expect second half 2026 run rate to be well above full year guidance given the significant shape to the year. We expect second half annualized adjusted EBITDA to be up to $40 million. We do anticipate Q1 and Q2 adjusted EBITDA will be negative given the growth investments we are making and the second half weighting of our new stall additions in 2026.

Charging network revenue should be around 70% of 2026 total revenue. Charging revenue is expected to increase each quarter on a year-over-year basis. In the first quarter, growth is expected to be softer as our new stalls added in Q4 are still ramping up, and we had significant weather impacts from winter storms.

eXtend revenues for 2026 are expected to be down on a year-over-year basis as we are constructing fewer stalls under the program this year as we get closer to completing the contract of pilot. Beginning in 2028, this will drive lower revenue solely tied to O&M activity which frees up our team to focus on further accelerating the expansion of our owned and operated network. Given our strong unit economics and paybacks, we are investing in G&A in 2026 for accelerated future stall deployment and improving the customer experience. These near-term investments are expected to position EVgo to accelerate revenue and profit growth into the future.

Adjusted G&A for 2026 is expected to be $150 million to $155 million for the full year which is approximately 35% of 2026 revenue guidance. This is largely in line with 2025 SG&A expense as a percentage of revenue, but on a full year basis, is burdened by the back-end growth the 2026 plan. 2026 will be an exciting year of transition for EVgo as we augment our foundation to support sustained profitability and set the table for an accelerated go-forward growth trajectory, which should drive improved incremental margins and sustainable profitability on a go-forward basis.

With that, I'll hand it back over to Badar to dive deeper into EVgo's differentiated value proposition for our shareholders.

Thank you, Keefer. Our unit economics we've shown over the last 2 years and the details for Q4 are in the appendix of our investor deck, highlighting the growth we are driving in cash flow per store. Throughput for store growth results from EVgo's competitive moat and rising EV [ BIO]. We believe our superior site selection, top-tier partnerships with OEMs, site hosts, rideshare, navy companies, our leading customer engagement and customer experience offerings, including faster chargers and our growing customer base that is now 1.6 million customers, all combined to create a moat [ radios ] business that is hard to replicate and 1 we spent 15 years building.

This is what drives our recurring and ever-expanding cash flow per store. [indiscernible] throughput per [indiscernible], whether for the average of the network, over the top 15% of stores continues to rise. Our 350-kilowatt tools are currently comprise over 60% of our network and will comprise around 90% of the network within a few years are now generating almost 350-kilowatt hours per store per day. Annualized cash flow per store for our entire network in Q4 was $21,000. If you look at our 350-kilowatt chargers that is $28,000, proof that our network will scale to our longer-term target.

On the top 15% of our network was over $65,000 which represents a payback period of just over 1 year for new stores performing at these levels. Top 15% of stores clearly shows the operating leverage within charging gross profit where these stores generated 54% charge in gross margin, a full 8 percentage points higher than the average of the network due to the higher throughput per stall reached a critical milestone this quarter, delivering positive adjusted EBITDA for the quarter and for the full year. This achievement rely in part on our non-charging lines of business spend and ancillary because of the growing number of owned and operated stores and the growth in store profitability due to rising throughput per store, the real growth in the company comes from our charging business.

Revenue growth since our IPO is over 17 points, and we've moved with adjusted EBITDA loss to a profit. As we've said before, nearly 2/3 of our total G&A is largely fixed growing much slower than the growth in the charging business. Therefore, the real operating leverage inflection with the gross profit from our charging business alone without any contribution from the non-charging businesses, covers our G&A occurs in late 2026.

From that point, we expect a significant increase in our already strong incremental margins with a significant portion of our charging gross profit falling straight to the bottom line, further accelerating the growth in adjusted EBITDA and driving significant adjusted EBITDA margin expansion. This is on top of the operating metric that exists within charging gross profit that I just discussed earlier.

Over the next 4 years, we are targeting charging network profits to grow at a CAGR of 50% to 60%. And with adjusted G&A growing at a CAGR of approximately 15%. This operating leverage results in 105% to 130% CAGR in adjusted EBITDA. We are confident that over the course of the next few years, we'll have a business that goes from breakeven to triple-digit millions in adjusted EBITDA.

EVgo has spent the past 15 years building a business model and a competitive moat that is hard to replicate and benefits from a number of growing mega trends and tailwinds that have already translated into strong financial results and will deliver even stronger results over the coming years. EVgo operates a highly differentiated, industry-leading charging platform that has meaningfully higher utilization at almost every one of our peers. This is not only driven by proprietary site selection capabilities, but also best-in-class customer experience and customer engagement to a large and growing customer base, combined with leading partnerships across the broader industry.

Our ability to attract nondilutive financing to accelerate our growth further separates us from our peers. Our focus on owning and operating our network especially in the high-density urban centers, where drivers need fast charging the most results in a business model with strong and growing unit economics with equally compelling operating leverage. And all of this benefits from a compelling macro backdrop that will propel the business for many years to come.

Vehicles in operation are expected to more than double by 2029. The share of public fast charging continues to rise due to the electrification of ride share, more affordable vehicles and faster charge rates, standardized cables will double EVgo's addressable market over time. And of course, the rise, fully electric, autonomous vehicles that will need to charge a fast-charging locations will just add to the growth we expect to see in our network.

By the time we end 2029, we are targeting to have an enduring infrastructure business with over 12,500 public-owned stores. Charging Network revenues modeled to grow at 40% to 50% and with adjusted EBITDA margins in the 25% to 30%. This is capital efficient, accretive growth model that positions EVgo to compound intrinsic value as we continue to scale our network. Taken together our differentiated approach, the accelerated demand environment and the strong returns on new investments gives us deep confidence in the long-term value creation opportunity ahead. Operator, we can now open the call for Q&A.

[Operator Instructions] Your first question comes from the line of Stephen Gengaro of Stifel.

Congrats on the progress. Can you -- this might be an odd question, but when you look at the customers, I forget the number you mentioned about 1.3 million or 1.5 million customers. Can you tell us -- did you give a [ sense ] for the percentage of usage that a certain piece of the customer base has? Like if you have 1.6 million, I think, was the number you gave, are you seeing -- like are the repeat users driving 25% driving 75% of the business? Like how do those numbers look?

Yes. Stephen, we -- I've been saying on a pretty much regular basis over the last several quarters that around half of our usage comes from rideshare customers or from customers on subscription accounts. So these are the customers that are using our network most frequently.

I think we've said rideshares roughly 1/4, rideshare alone is roughly 1/4 of the business. And then we've got the subscription accounts and of course, customers on the OEM charging programs. So that's roughly what it is. I think rideshare in particular, as we said over many quarters now, it's gone from roughly 10% 4 years ago to about a quarter. So it's a really exciting part of the demand of the network rideshare is electrifying, it's going to continue to electrify. Companies like Uber Lyft, cities like New York City, states like California, are all focused on encouraging the electrification of [indiscernible]. So that's really a big component there.

Okay. Great. And the other one was how do you participate? And I know you mentioned it on the autonomy side, like what -- are there incremental -- are there folks at the EVgo charging? How does that ultimately work in your mind?

Yes. Well, I think that as we said on the call, I think the autonomous vehicle space is, I think, a very significant source of potential upside for the business. we have -- we've got about 140 operational stores that are dedicated to autonomous vehicle partners. We've been actually we've had operating stores for [ AP ] Partners for years, actually 5 years now or more since 2000 -- since 2020, I'm sorry. So we've been doing it for quite a while. We are adding maybe doubling the number of stores. It's still ready this year. 2026 is so still pretty small.

But I do think that just like in human rideshare, EVgo will become the partner of choice for autonomous vehicle companies just given our scale, our balance sheet, the emphasis on reliability, our significantly superior customer demand that [indiscernible] for the third-party industry data. And these sites do have even operators who are plugging the cables in the vehicles, if I thought, if that was your question.

Your next question comes from the line of [ Laura Dang ] of RBC Capital Markets.

I think last quarter, you all mentioned those charter tech enhancements. Just wanted to know if there's an update with that and when you expect to have that second enhancement completed? And then I have a follow-up.

Yes. We're thrilled very pleased with the work that's going on actually with our supply chain partners, that's [indiscernible]. We've been systematically requalifying reinstalling the tack on each of these sets of equipment and progress is going great. We completed that program with [ Signet], I want to say over a year ago now, and the effort that we have in [ Delta ] continues through the course of this year. I expect that we'll be well past the majority of that were the middle of the year. So going very well.

Got it. Got it. And then on NACS, what have you all seen with the initial performance on the connectors installed so far? And then what gives confidence to accelerate that deployment this year?

Yes. So the throughput per store on our NACS stores has nearly doubled since the fall. And that's really giving us the confidence to accelerate the rollout this year. The throughput here on these NACS cables, NACS tools are actually still well below CCS installs. And that's because it just takes a little longer for test the drivers to kind of get used to charging in places other than Tesla superchargers. But we do expect that over time through our engagement efforts, our customer communications, and really also because our stores are charging dispos are faster. There's 350-kilowatt versus the [indiscernible] network of 250. They're closer to where drivers are where they [indiscernible], they live, they work. We'd expect to see that rise.

And that's really why we're really quite excited by this max deployment. It effectively doubles our addressable market. There are many more NACS vehicles in their RCC over time, charging our network with that adaptor. It is an investment in 2026 that I expect will be will pay off quite materially in the future. And so that's why we're talking about rolling out over 400 more stores in the course of this year.

[Operator Instructions] Your next question comes from the line of Bill Peterson of JPMorgan.

First, it looks like you lowered your build schedule targets now through 2029. And trying to get a better understanding of what's driving the revision? Is it higher CapEx for [indiscernible]? I mean less demand -- presume it might be less demand. But can you just define what your expectations are? I think you were talking about industry expectations of [ VIO ] doubling by 2029.

But I mean what if growth remains flat or even declines implying lower [ VIO], would you subsequently lower your deployments? Or do you feel confident in the revised guidance? So I understand the value proposition of EVs, but the near-term growth projections are certainly far from [indiscernible].

Yes, Bill, I mean, I think that as I -- as we look at our build plans for our owned stores, which is really what we're focusing on here, that start with 2026. We are really stepping up the deployment of new stores in 2026. We've been growing new stores, owned stores roughly kind of 700 to 800 a year for about almost 4 years now. And what you can see for 2026 is -- it's up to about 8% higher, 50-some to 85% higher. So that's a very significant step-up. We'll incur those expenses this year in terms of deploying more stores.

2027 is about 2.5 to threefold versus 2025 levels. So it's another big step up. We will start incurring growth expenses for the '27 deployments towards the end of this year. And I think when I look at this deployment schedule, it's really -- we're just being very disciplined around how we deploy capital. That's what guides our decision making. We're generating payback is as fast as 1 to 2 years. The top end of our net with the top 15% of stores. We're targeting 3- to 5-year paybacks. We're getting something at the faster end of that range.

And so as long as the returns that we're generating on this capital is at those levels in the [indiscernible] at those levels. We think it makes a ton of sense to deploy, -- we balance a bunch of things from -- in the past has been the balance sheet. The balance sheet, of course, is at the strongest place it's been in pretty many years now. We do think about in year earnings. We do think about the sequence of deploying our operational capacity. I think the pilot contract deployments reaching an end in 2027 does allow us to transfer some of that operational build capacity over to the old operation owned fleet without causing too much disruption.

So that's how we think about it in terms of the underlying [ VIO]. I mean, look, we've seen these forecasts -- you and I, we've seen these forecasts. It's been slashed in the last couple of years. And yet, we say it's a muted demand environment, and yet, it's still 2 or 3x where we are today for 2030. And so I don't know about these forecasts, I sometimes feel like they swing like a pendulum going back and forth. We're going to be focused on deploying capital in a way that makes sense for our shareholders. And the good news is we can deploy faster or slower based on the returns that we're seeing.

Yes, thanks for that color. I'd like to maybe double click in on the -- kind of relatively why the EBITDA guidance range maybe understand better what drives it closer to the lower end of the range versus positive. You talked about a pretty significant ramp in the second half. Is there anything else that we should be thinking about, for example, how much is the removal of the [ 30 ] tax credit have an impact? Maybe the eXtend, how much shows up in '26 versus '27. Just anything you can do to help us better understand the guidance range.

Bill, this is Peter. I'll jump in on this one. To your point, we guided to an adjusted EBITDA range at the midpoint is breakeven. But we did -- and also, to your point, share color on both the shape of '26 as well as the exit rate represented by a second half annualized number, which is clearly well above the full year guidance range.

The shape for the year is really driven by the deployment cadence of our 2026 capital spending plus some near-term investments at the front end of the year from a G&A perspective as we work to make sure we have the foundation in place to support a more rapid build-out of our owned and operated network.

So those are really the key drivers there. I think the operating leverage around the charging business and our charging margin is really what drives that as operating leverage increases through still dependent and propending costs that illustrates that operating leverage on a forward basis. So charging or gross profit accounts for roughly 2/3 of the range within the $110 million to $140 million forecast that we showed in the slides.

Your next question comes from the line of Craig Irwin of ROTH Capital.

Actually, my question is very much on the same line of what the last person just asked. So I was hoping you could get a little bit more granular about incrementally how much G&A dollars you're investing in '26 versus '25? And if you could maybe give us color on where you're spending these dollars. Is this in primarily rideshare support and multifamily? Or is this in education and other things with used car -- used DV buyers. I mean there's many different ways you could approach organic growth on the network. If you could maybe just share with us a little bit about where you're spending the money.

Yes, Craig. Great question, and thank you. So as you think about 2026, just total adjusted G&A, we're guiding to a range of $150 million to $155 million. At the midpoint there, that's up about 19% compared to full year 2025 and up about 8% from where we exited 2025 on a Q4 annualized basis. So G&A spending will be up year-over-year, albeit at a much more muted level than what we're expecting from a top line and margin expansion standpoint. Our DNA remains kind of 2/3 fixed as you think about the fixed and variable split and where we're really making investments in 2026 is around internal resources as well as additional R&D support and resources as we work to build out and roll out latest generation hardware software and firmware over the course.

Yes. And Craig, maybe if I can just jump in here a little bit, just to add a little more to that. If I just take a step back, we are generating paybacks as fast as or in 2 years. Got a network that's now nearly 15x larger on average than almost everybody else in the space, the demand on our network on a personal basis is 5x higher. And so many of our top shareholders are actually keen for us to leverage this strength by growing faster.

So where Keefer was talking about increased resources, it's really to grow faster, grow faster, solidify that competitive advantage, really separate ourselves from the rest, which gets us to that triple-digit millions in adjusted EBITDA within last time, it took us to get from negative [ $80 ] to breakeven. We could choose to not go that fast, and we might be $20 million, maybe $25 million is better off in 2026 on adjusted EBITDA.

But I think that honestly seems to be a little shortsighted. It wastes the moat that we've built and not to mention it is a lot lower -- it results in a slower adjusted EBITDA ramp than if we go faster. So we're actually really excited about this year. I think it's a year of really ramping up, which will pay off handsome. We expect to pay off handsomely going forward.

Understood. That makes complete sense. So my next question is about the charging network gross margins, right? So I definitely appreciate the detail that you've been sharing with us over the last several quarters, a 600 basis point improvement year-over-year. That is fantastic. There's quite a lot of volatility out there around electricity prices and several investors have been asking about your ability to pass through some of the short-term volatility that shows up in the market, many other large buyers of electricity actually this last quarter had contracting margins, and you've had expanding margins. Can you maybe just discuss how you purchase and make your commitments for electricity? And your visibility on expanding these margins like you share for your top 15% of the network?

Sure. I mean, look, margins will expand just because of the operating leverage within charging gross profit were roughly 30% of our costs are on a fixed on a personal basis. And I think as you just mentioned, you see that when you look at the difference between the top 15% of our network and the average of our network, every quarter, when we report every other quarter reported unit economics, you can see our charging the gross margin is quite a bit higher, it was 8 percentage points higher for higher usage stores.

So there is this embedded operating leverage as usage per store rises. We've got real scale relative to everybody else in this industry. Almost everybody else, we've got real scale. We're able to engage an active energy cost management in certainly [indiscernible] markets. As you know that my background comes from that space. We've got very -- more sophisticated dynamic pricing algorithms deployed across the network. We deployed them in through '24 and '25. We've got that next round of --

Pardon the interruption, we seem to be experiencing technical difficulties. I'll place you back on music hold until we get this resolved. Thank you. We have the speakers back. Please go ahead.

Okay. I will assume that you can hear us. So look, Craig, just to summarize we feel pretty excited about our pricing sophistication. I will say that we are in the foothills of a multi-decade journey. And so our long-term unit economic gross margins are really not different from where we are today. So I think that might seem to be a conservative assumption.

Your next question comes from the line of Chris Pierce of Needham.

Okay. Perfect. You've talked about moving faster. You talked about the network effects and network advantages. I guess if we think about this long tail of substandard operators. Is there a chance for M&A in maybe some areas where it's a desirable geographic location and you've got a competitor there that is maybe a local-only competitor. And that would sort of grow the installed base even faster? Or is that not quite something that's possible given the DOE loan or how you guys think about installing a need electricity for 350, et cetera?

At the highest level, Chris, we are -- we want to ensure that we are deploying capital that is generating the best returns deploying capital organically as we can all clearly see is generating very strong returns. If we're able to deploy capital inorganically that can compete with that, then of course, we will take a look at it.

It is our view that our really quite material difference, superior performance on demand in terms of the usage per [indiscernible] is due to the site location, but also all the other things that you were just alluding to, our network effect, our investments in customer experience, customer engagement through reliability, the charger speed. And so if there may be a scenario where our know-how on top of somebody else's assets, as long as they're in good locations, could generate much more attractive returns. But these are all hypothetical at this point, we're just very focused on deploying capital organically.

Your next question comes from the line of Andres Sheppard of Cantor Fitzgerald.

Congrats on the quarter. A lot of our key questions have been asked. I wanted to maybe touch on autonomy and autonomous vehicles since that's a big area of emphasis going forward. Just curious like how should we think about KPIs in that industry? And what would you recommend we look for in terms of seeing progress there. Should we expect a major increase in utilization rate? Is it just an increase to the stall counts, network throughput? Like what would be the exceed lever to focus there for autonomous vehicles?

Yes. And I mean, I think, as I said before, I think this is a space that's really very exciting and is a potentially very significant source of upside in the medium to longer term. We do have 140 of the 5, 100 stores that are operational, 140 today that are dedicated to autonomous vehicle partners. We separated them out in our disclosure at the beginning of 2025. We added 30 to that count last year. This year, it will be maybe a bit double, to be kind of 50 to 75 stores. So maybe that's a metric to look at.

I will say it is pretty early in the game in terms of the autonomous vehicle space. Our contract structures are ones where we -- current contract structures are ones where we don't have any utilization exposure. In other words, we're just getting a fixed monthly fee for these stores. So these are kind of like contracted cash flows over a long period, long term.

We are still working out with between our partners and ourselves, what are the best contract structures that make sense for everyone in the long term. But just like a human rideshare, as I said, I expect that EVgo will become the partner of choice for these companies, just given the scale, the balance sheet and the track record that we've built here over the last many years. And we've been -- on the AV space, we've been not preserving AV partners for 5 years now.

Got it. That's super helpful. I appreciate all that color. Maybe just as a last and quick follow-up. Can you maybe just remind us capital needs going forward with roughly $211 million in liquidity, you also have the DOE loan. How are you thinking about capital needs and particularly if you're planning on being active in the M&A market?

Well, just to be clear, we are very focused on growing the company organically. So if there are opportunities to deploy capital that compete with that, we'll look at it. But today, we're very focused on growing organically. I will say -- I'll ask Keefer just to comment on the capital leads, but we've got one of the -- at this point, I think the strongest balance sheet we've had in my time, certainly as CEO and prior to that. So -- and we've got this -- I consider kind of superior and lower cost access to nondilutive financing to the DOE and the commercial bank facility. And so we feel very good about those facilities. But I'll ask maybe Keefer just to comment on how you think about the capital needs this year.

Good question. So to jump in on '26 capital spending, right now, we're estimating a range in kind of the high $100 million up to approaching $200 million of spend for '26. Approximately 2/3 of that would be earmarked for 2026 deployments. So the [indiscernible] room there is just related to future capital spending when that hits from a timing perspective. On a net basis, that was a gross number I just gave you on a net basis, we're expecting costs this year to be approximately 17%. So on a per install basis, we do believe we'll be able to drive down gross capital spending per stall. So we're in the low single digits on a year-over-year basis as we look from '25 to '26.

And your last question is a follow-up from the line of Stephen Gengaro of Stifel.

This was -- in reference to the margins and the pricing side, this came up a little bit on an earlier question, but are you -- have you implemented -- how do you handle sort of the dynamic pricing model? Like how where is the system of alternatives and how do you sort of adapt to changing environments with pricing? Is that real time? Is it -- just could you give me an update on how you handle that?

Yes. Us, we rolled out our first set of dynamic pricing algorithms back in 2020, late '24. So they've been running now for about 12 to 18 months. And these are -- these are really algorithms that are optimizing pricing for us to generate absolutely to maximize absolute gross margin. And so these algorithms are resulting in different prices certainly throughout the day, over a 24-hour period and across different locations where prices might be going up or down.

We expect to roll out a new level of algorithms this spring. We were hoping to do that at the end of last year. But with -- we had the record deployment of new stores. It was the largest deployment of new stores in the company's history ever in Q4. We wanted to just sort of manage the operational bandwidth there. And those new algorithms just take us to another level of sophistication in terms of frequency of change and sort of disaggregation in terms of pricing combinations across our entire network.

With no further questions. That concludes our Q&A session. I will now turn the conference back over to Badar Khan for closing remarks.

Great. Well, thank you, everyone. If you go, as you can see, reached a critical milestone of adjusted EBITDA breakeven, and we had just a fantastic fourth quarter in terms of new stores deployed. We can see from this third-party industry data that EVgo's competitive moat that we spent 15 years building is really paying off. with far superior customer demand versus almost everybody else on the network.

In 2026, we are choosing to leverage this position of strength and make investments that both secures this competitive advantage and results in adjusted EBITDA reaching or in the triple-digit millions within reach. I look forward to sharing our progress with you over the course of this coming year. Thanks all.

This concludes this conference call. You may now disconnect.

Thank you for standing by. At this time, I would like to welcome everyone to the EVgo Third Quarter 2025 Earnings Call. [Operator Instructions]

I would now like to turn the call over to Heather Davis.

Good morning, and welcome to EVgo's Third Quarter 2025 Earnings Call. My name is Heather Davis, and I am 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 third quarter 2025 financial results, followed by a Q&A session. Today's call is being webcast and can be accessed on the Investors section of our website at investors.evgo.com.

The call will be archived and available along with the company's earnings release and investor presentation after the conclusion of this call. During the call, management will be making forward-looking statements that are subject to risks and uncertainties, including expectations about future performance. Factors that could cause actual results to differ materially from our expectations are detailed in our SEC filings, including 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 Investors 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 Investors section of our website.

With that, I'll turn the call over to Badar Khan, EVgo's CEO.

Thank you, Heather. EVgo delivered another solid quarter of results, furthering our position as an industry leader built for long-term success. We delivered total revenue of $92 million and record charging network revenues. We ended the quarter with almost 4,600 stalls in operation and expect to see a very large fourth quarter for stall deployment. And we continue to see improvement in adjusted EBITDA.

From a liquidity standpoint, we are in a very strong position with a higher cash balance at the end of the quarter than last quarter. In October, we received the latest advance for $41 million from the DOE Loan, which is being used to accelerate the nationwide build-out of EV charging infrastructure, offering American drivers more choices on where they charge.

As you recall from the last call, we closed on a first-of-its-kind transformational commercial financing facility in July for $225 million with potential to expand up to $300 million, which we believe reflects the confidence these banks have in the resilience of the cash flows generated by our ultrafast charging infrastructure.

We have now received 2 draws from this facility for a total of $59 million. We've expanded our pilot for J3400 connectors, more commonly known as NACS, and now have roughly 100 NACS cables installed. We're encouraged to see an increase in Tesla's charging at EVgo. And we continue to improve returns on capital deployed by lowering net CapEx per stall with 2025 vintage net CapEx per stall now expected to be lower than our initial plan by 27%.

Unlike other companies in the EV charging space, EVgo's revenue has grown consistently and predictably faster than the growth in EV vehicles in operation, growing at double the CAGR of VIO growth over the past 4 years. This is due to both market factors and company-specific factors, and we believe this outperformance of revenue growth over VIO growth is set to continue for the foreseeable future.

Today's market-wide tailwinds include higher usage fueled by rideshare electrification, expansion of affordable vehicles, bringing more drivers to public charging, faster vehicle charge rates with a shift towards larger, less efficient cars. And historically, EV vehicle miles traveled has steadily closed the gap to their ICE counterparts.

Company-specific factors that are driving EVgo's outsized growth include our network planning, which looks for better locations with high utilization compared to the rest of the industry, building better charging stations and our expanding network effect of more than 1.6 million customer accounts.

The third quarter saw a historic number of EV sales in the U.S. ahead of the federal tax credits expiring. While we won't speculate on the level of EV sales in Q4 and 2026, it will result in an ever-increasing number of EVs on the road. Although EV projections today are lower than in the past, the latest forecast for EV VIO growth remains strong, albeit with a slower rate of growth.

Our charging revenue forecast based on our updated unit economics and forecasted store growth we discussed last quarter also conservatively assumes a lower rate of growth than we delivered historically and yet still represents 3 to 4x annualized growth from today. As we noted earlier, we are nearing a critical milestone, delivering breakeven adjusted EBITDA, which we expect to achieve in the fourth quarter.

Over the past 4 years, quarterly revenue and gross profit have accelerated 15 to 19-fold, whereas quarterly adjusted G&A has only grown modestly because most of our G&A is actually fixed. As a result, we are predictably reaching adjusted EBITDA inflection to positive in the fourth quarter. But after this inflection, EVgo has 2 sources of operating leverage that will position us for accelerated adjusted EBITDA growth in the future.

First, and something we have been benefiting from over the past 4 years is that we have leverage within our charging network cost of sales. Approximately 28% of our cost of sales is fixed on a per store basis. So as throughput per store grows, so does the charging network gross margin. These fixed costs on a per store basis include rent and property taxes.

Secondly, once store-based cash flow or charging network gross profit less sustaining G&A exceeds the total of growth and corporate G&A, which are largely fixed, all profits from the charging network fall straight to the bottom line, accelerating adjusted EBITDA growth. With approximately 2/3 of our G&A cost base largely fixed today, this represents very strong operating leverage.

In fact, excluding growth G&A, EVgo is already adjusted EBITDA positive, but we are choosing to incur growth expenses given the strong returns associated with deploying new stores. Making this even more attractive for investors is that we have the financing in place through 2029 to deploy all these new stores without the need for any additional equity capital.

The expected result is a very attractive business by 2029 with $0.5 billion in adjusted EBITDA at mid-30s adjusted EBITDA margins. For almost 2 years, EVgo has been delivering one of the highest levels of network usage across the industry. Again, this is driven by both market and company-specific factors. Average daily throughput per stall is an important KPI to view network performance, and it is growing, driven by both time-based utilization as well as charge rates, both of which have been growing for the past 4 years.

Rising charge rates are a significant tailwind we benefit from as higher charge rates deliver more kilowatt hours at the same utilization level and tend to result in higher levels of EV adoption, in turn, increasing demand for our fast chargers.

Higher charge rates also improve returns on capital deployed because they allow us to dispense more kilowatt hours from the existing assets without the need to deploy more capital. Higher charge rates come from improved battery technology and EVs, as well as EVgo deploying more 350-kilowatt ultrafast high-powered infrastructure. Average daily throughput per stall has grown more than sixfold from less than 50 kilowatt hours in Q1 2022 to 295 this quarter, and we conservatively assume only slightly higher utilization by 2029, but with rising charge rates, we expect to see 450 to 500 average daily throughput by 2029.

This higher throughput per stall, combined with many more stalls deployed is what has been and will continue to drive growth in revenues. Not only have we been delivering some of the best performing usage across the industry, we're focused on ensuring our chargers perform to their maximum potential and can maintain increasing utilization rates. Today, nearly all stores deployed are 350-kilowatt chargers, which delivered almost 60% of our throughput in the quarter. These chargers are the most representative of our expected future network since we estimate well over 90% of our throughput in 2029 will come from these chargers.

Utilization on the EVgo network has surpassed others in the industry, our expectations and the expectations of the equipment providers. This high usage placed stress on our Signet chargers, which were the first 350-kilowatt chargers we deployed. After performing root cause analysis in conjunction with Signet in 2024, we embarked on a number of tech enhancements and a year later, Signet chargers are performing very strongly with usage already close to our long-term target in 2029.

We are now at a similar junction with our Delta chargers, which have comprised almost all new builds since 2024. EVgo is embarking on the same kind of tech enhancements we did with Signet, and we're confident we will see the same strong performance step-up as we've seen with the Signets. As an industry leader, we are focused on ensuring we have the best quality hardware through ongoing maintenance, periodic enhancement of specific components and our next-generation charging stations, which we are actively developing at our innovation lab in El Segundo.

Our new generation of charging architecture is being designed not only for a better experience and lower cost, but also being developed and qualified for these higher levels of utilization from the start. This project is being led by the EVgo team and features a robust design for reliability methodology, including best-in-class hardware design and software, taking into account our learnings from our 15 years of experience in EV charging and over 1.6 million customer accounts, all of which sets us apart from the rest of the industry.

The next generation of charging architecture is expected to lower our gross CapEx per stall by over 25% in 2029 versus 2023, delivering even stronger returns on capital deployed. In the meantime, we've been driving down both gross and net CapEx per stall over the last 3 years. In 2025, vintage gross CapEx per stall is expected to be 17% lower than 2023, driven by savings from lower contractor pricing, material sourcing and increased use of prefabricated skids.

When you include capital offsets, our CapEx per stall is expected to be reduced by 40%, resulting in vintage net CapEx per stall of $75,000. As a reminder, capital offsets come from 3 sources: state and utility incentives, OEM infrastructure payments and federal incentives like 30C. Our forecasted performance this year is a reminder that despite the fact that federal incentives for EV charging will sunset in the summer of 2026, state grants and utility incentives are alive and well.

As we said last quarter, in order to capture some of these state grants, a certain number of stores that were due to be operationalized in the second half of the year have shifted out by a few weeks, lowering the total number of stores that we expect to deploy in calendar 2025. Our long-term expectation is to continue lowering gross CapEx per stall as a result of our next-generation architecture, but we conservatively assume we do not have a same level of offsets as we've seen in the past couple of years.

Let's now briefly turn to progress on our 4 key priorities: delivering a best-in-class customer experience, operating in CapEx efficiencies, capturing and retaining high-value customers and securing additional complementary nondilutive financing to accelerate growth. As we discussed earlier, our next-generation charging architecture will take our customer experience to the next level. We've completed the enhancement of a number of components in our Signet 350-kilowatt chargers and are now embarking on a similar campaign for our Delta 350-kilowatt chargers.

In terms of efficiencies, while the next-generation charging architecture is expected to deliver CapEx efficiencies by 2027, we're making great progress in the near term, too, lowering 2025 vintage net CapEx by 27% versus our plan for the year, and we continue to see a reduction in G&A as a percent of revenue for 2025 versus prior years.

The EVgo app has now reached an overall rating of 4.5 on the Apple App Store, which is a key threshold above which we would expect to see accelerated organic customer acquisition, and we're thrilled with reaching this milestone. Our NACS pilot has continued to expand from 2 sites last quarter to almost 100 stores as of the end of October. In this pilot, we continue to test our ability to attract native NAC vehicles to our network and we remain encouraged by the higher number of Tesla drivers at these stores than they had prior to installing the NACS cables.

This is a key part of our iterative learning process before a much wider scale rollout plan for 2026. And on financing, we've made excellent progress this year between continued advances under the DOE Loan, closing the sale of our 2024 Vintage 30C portfolio and of course, the transformational first-of-its-kind commercial financing facility. As we noted earlier, we expect 40% capital offsets for the 2025 vintage CapEx. We have the financing in place to increase our annual store build to up to 5,000 stores a year by 2029 without the need for any new equity capital.

Now, Paul will share more detail on our third quarter results.

Thank you, Badar. Operational stall growth is one of the key components of growing EVgo's revenue. We ended Q3 with 4,590 stalls in operation, a 2.7x increase compared to the end of 2021. Our customer base has grown almost fivefold over that same period, which contributes to the network effect driving increased usage on our network. We've grown the total energy dispensed on EVgo's network to 350 gigawatt hours over the trailing 12 months, a 13-fold increase over that same period.

Revenues of $333 million over the last 12 months have increased over 15x since 2021. Charging network gross margin has grown from the mid-teens to the mid to high 30s, reflecting the leverage of fixed cost of sales on a per stall basis as throughput per stall rises. And importantly, we continue to deliver improving profitability and adjusted EBITDA margin has made significant improvements driven by increasing revenues, leverage of fixed costs and disciplined cost management.

Total throughput on the public network during the third quarter was 95 gigawatt hours, a 25% increase compared to last year. Revenue for Q3 was $92 million, which represents a 37% year-over-year increase with growth in all 3 revenue categories. Total charging network revenues were $56 million, exhibiting a 33% increase. eXtend revenues were $32 million, delivering growth of 46%.

Ancillary revenues of roughly $5 million were up 27%. Charging network gross margin in the third quarter was 35%, up 1 percentage point. Third quarter adjusted gross profit of $27 million was up 48% versus the prior year. Adjusted gross margin was 29% in Q3, an increase of 230 basis points.

Adjusted G&A as a percentage of revenue also improved from 40% in the third quarter of 2024 to 34% in Q3 of this year, demonstrating the operating leverage effect. Adjusted EBITDA was negative $5 million in the third quarter of 2025, a $4 million improvement versus the third quarter of 2024.

Now turning to our 2025 guidance. We anticipate some of the public and dedicated stalls we forecasted to be operationalized in December will now be open in January 2026. As such, our EVgo public and dedicated stall expectation for the year is 700 to 750. This shift in deployments to January will be reflected in our 2026 guidance, which we expect to issue with our Q4 results in early 2026.

However, we are increasing our expectation of the number of eXtend stalls operationalized this year to 550 to 575 due to the great progress we've been seeing all year with our partner, Pilot Flying J. As a result, Q4 is expected to represent a very big quarter for newly operationalized stalls. Overall, we will deploy slightly fewer total stalls in 2025 compared to our guidance in Q2. However, the mix has changed with fewer public and dedicated stalls and more eXtend stalls.

We have not only been focused on capital efficiency, but also reducing the length of time it takes for us to develop and build stalls. As a result, we now expect fiscal net CapEx for 2025 in the range of $100 million to $110 million driven primarily by less spend this year on 2026 [indiscernible] stalls. We are now forecasting a wide range of outcomes for the fourth quarter and full year than we normally would, substantially due to a potential contract closeout payment to EVgo in relation to dedicated stalls we were building for one of our autonomous vehicle partners that has decided to exit the robotaxi business.

There is currently uncertainty on both the quantum and timing of these payments. And because this amount could be very significant, we are issuing a baseline guidance that does not include this item and an upside guidance that includes it. Our prior revenue and adjusted EBITDA guidance did assume a smaller range from this matter in 2025. As the matter has progressed, we now believe the range of outcomes could be much wider.

In addition, the matter may not be concluded this year and may slip into the new year. For the full year 2025, we expect total baseline revenues will be in the $350 million to $365 million range with baseline adjusted EBITDA in the negative $15 million to negative $8 million range. Our baseline revenue and adjusted EBITDA guidance are relatively in line with our prior view, excluding our prior estimate for the ancillary upside.

Including the ancillary revenue upside of up to $40 million, 2025 revenues are expected in the range of $350 million to $405 million, with adjusted EBITDA in a negative $15 million to positive $23 million range. There are a few moving parts for the implied Q4, so let's unpack those a bit.

Charging network revenues are estimated to be near 60% of total revenues for the full year, in line with prior guidance. We're anticipating continued sequential improvement in the fourth quarter. We expect the 2025 charging network margin profile to be consistent with 2024. Fourth quarter charging network margin should improve compared to Q3 '25.

Our eXtend business with a pilot company continues to perform better than expectations. Full year eXtend revenues are anticipated to be approximately 30% higher than prior year eXtend revenues, slightly higher than prior guidance. We'll be more than halfway through the build program with pilot by the end of this year and thus expect 2026 eXtend revenues to be similar to 2025.

Ancillary revenues are expected to grow significantly in 2025, driven by our dedicated hubs business serving other autonomous vehicle partners. Baseline ancillary revenues are expected to show at least 50% growth before any potential upside. Adjusted G&A for 2025 is expected to be approximately $125 million to $127 million for the full year.

In 2026, we're continuing to invest in growth, therefore, anticipate G&A increasing by approximately 20%. We expect to achieve adjusted EBITDA breakeven in the fourth quarter at the midpoint of our baseline guidance. This is a significant milestone for the company.

Operator, we can now open the call for Q&A.

And your first question comes from the line of Chris Dendrinos with RBC Capital Markets.

I guess maybe to start out here, and you mentioned some commentary around the EV demand outlook, and I know you wouldn't comment on it. But maybe could you kind of walk through how you're thinking about EV demand in relation to your longer-term outlook? And what are the puts and takes that would maybe make you slow development down or speed development up?

Yes. Chris, look, I think EVs -- the number of EVs on the road have grown, as you can see, three to fourfold in the past 4 years. Today, there's around 100 battery electric vehicle models available, and that's -- it was probably about 30, 4 years ago. We see these cars are increasingly affordable and just great cars to drive. I think in some ways, EV sales forecasts sometimes to me anyway feel like a pendulum swimming back and forth. They were probably too high a few years ago and maybe the pendulum swung back and maybe it's too low today, driven by a view of these incentives that have just expired.

I actually think that we'll see higher sales than what the current forecasts show because the cars are -- they're just great to drive. They're -- in many cases, they're getting better. And I think it's just a matter of time before they're cheaper. As it relates to our business, the way we think about our charging stalls is, of course, whether we're able to generate the kind of strong returns on capital that we're generating today. You can see or most people can see that we're at 2 to 3-year payback here.

As we look at the market, we think about the ratio of cars per fast charger nationwide. And over the last several years, that ratio has been growing, meaning there is more upside on usage per store. And that's, in fact, what we've seen. We've seen our usage per store go up sixfold. We don't see that picture getting any worse than today. And therefore, we -- if it gets better to today, then that's even better for us. If it's no worse than today, we will expect to be deploying charging stalls that are generating the kind of returns that we are today. And that's how we think about the capital deployment in the business.

Got it. And then as a follow-up, you mentioned you're seeing an uptick in Tesla's charging on your network with the rollout of that NACS cable. Can you maybe kind of quantify here what you're seeing early days?

I would say it's still a little too early to quantify or to give you a real quantification. We've gone from a couple of sites that we talked about last quarter to almost 100 cables as of the end of October. Team here and myself are pretty excited about what we're seeing. Tesla driver usage is higher at these sites than they were pre-installation. These are all retrofit. I expect that we will do what we've done in everything else in the business, which is sort of very databased analysis of the situation where if we are continue to have the kind of confidence we have today that we're able to put these retrofit cables at sites that are targeted sites close to where we believe Tesla drivers live and work and run [indiscernible] and we continue to see that sort of Tesla usage rise, we'll look to scale rollout in 2026.

I think we'll keep it at this sort of 100 level for another quarter or so, make sure that we remain confident in the results and then really scaling it out next year.Your next question comes from the line of Bill Peterson with JPMorgan.

I realize you're going to provide more granularity on stall guidance for next year. You gave some framework for eXtend. But if you look at the guidance, assuming some of the pushouts into next year, your prior guidance from the middle of the year was around, I don't know, 1,400 or so, 1,350 to 1,500 at the midpoint. I guess, conceptually, should we think of that coming in lower, maybe perhaps towards where you had provided guidance at the start of 2025, which was more in the 1,000 to 1,200 range. I'm just trying to get a sense of how we should think about that as well as really the build plan over the next 5 years. Should that be tracking more like what we saw at the start of the year? Just trying to get a sense given the realities that we may be probably see a negative year-on-year growth for EV demand maybe for the next several quarters.

Yes, hey, Will, we haven't yet provided guidance for 2026, as you said. But I think looking back to what we said last quarter is actually a useful starting point. And on our call last quarter, you're exactly right. We said that we would expect to see 1,350 to 1,500 stores for 2026. And to be clear, that was our owned and operated stores at 1,350 to 1,500, that's our public network and our dedicated stores. So that's about double the rate of growth that we're at today.

This year in 2025, the larger number that you mentioned includes our eXtend stores. So, we were at the sort of 800-ish public and dedicated plus eXtend for 2025. We now see 2025 a little bit lower, more extend, a little less public and dedicated. But on the public and dedicated side, it's -- we would be looking at about a doubling of where we're at this year for 2026. So, we're pretty excited by it. We're generating the kind of returns that we expect that we've been talking about for the last couple of years or the last several months or last several quarters. And as long as we are generating those kind of returns, then we expect our shareholders would want us to deploy that capital.

I'd like to try to understand this ancillary upside a bit more -- and just to be clear, this was not contemplated in your prior guidance, right? So -- and then if that's the case, trying to get a sense of what this closeout could mean for future revenue impact. In other words, was there some sort of expectation that this dedicated fleet customer would have been continuing beyond 2025? Any additional color would be helpful here.

Yes. So, we had assumed a smaller range from this contract close out in 2025 in our prior guidance. It was in the $10 million to $15 million range. And so, if you look at our guidance today, we're pretty much at the same place as we were last quarter. So, if you just take today's baseline guidance, excluding our updated view, add on the $10 million to $15 million that we assumed in our prior guidance, and you're at pretty much the same place. In terms of the update, it's a larger range. So the upside is quite a bit higher than we had thought earlier in this year, but also there could be a timing issue where it occurs, it slips into next year.

We don't assume that this is a recurring thing, Bill. So, this is -- we consider this a one-off, and that's why we're separating it out. So, you can see the very strong trajectory of the underlying baseline business.

Your next question comes from the line of Stephen Gengaro with Stifel.

Two things for me. I guess the first is you talked about fourth quarter and maybe getting to EBITDA breakeven at the midpoint of your guidance. Can you just remind us as we sort of think about seasonal patterns as you get into '26 without specific numbers, should we be thinking about this as when you get there, you should stay there and then progress from there? Or are there some seasonal noise we should be contemplating in our models just to make sure we're in line with how you're thinking about things?

Yes. Let me talk about the seasonality point in just one second, Stephen. The -- but you're right, the company has maybe at a macro level, very strong operating leverage, where around 2/3 of our G&A is kind of largely fixed. And so, when the growing profits from the charging network exceed those costs, all that profit goes straight to the bottom line. I'm talking about charging network gross profit less sustaining G&A. And that's the point where EBITDA really accelerates.

Looking back, that's how we've gone from an $80 million loss to approaching breakeven. And it's really how we get to $0.5 billion in adjusted EBITDA in 4 to 5 years' time. And to your question more specifically around the near term, in Q4 this -- in Q3 and in Q4 this year, we still have gross profit from our non-charging businesses that are helping to cover those fixed costs. But in 2026, the charging network profit, so again, that's charging network gross profit less sustaining G&A will be higher without any contribution from our non-charging business to cover those fixed costs. And that's where we see things really accelerate. We think that will be in the second half of next year.

In terms of the seasonality point, we do have seasonality. We do see it in terms of vehicle miles travel. So, there's a little less VMT and therefore, a little less throughput per store per day in the kind of Q1 in the winter than in the summer. We also see seasonality in terms of charge rates. Charge rates tend to be a little lower in the winters than in the warmer summer months. And we also see seasonality in terms of gross charging gross margin where we have higher cost of sales, energy cost of sales, higher tariffs in the summer months. So those are probably the main sort of seasonality things that we see.

And as I said, once that charging network gross profits exceed fixed costs, that's the point where you see the EBITDA growth just really accelerate, and we're getting closer and closer to that point if we standby.

Great. And then my other question was just around industry dynamics. And how do you think about -- I mean, you've laid things out very well as far as your plans through '29. How do you think about just the number of players in the industry, industry consolidation in the U.S. market? And how do you think that plays out over the next couple of years?

Yes. I mean, look, we are -- we think that we've got a number of sources of competitive advantage where specifically, we focus very much on site selection. So, building sites where drivers are and as a result, generate the kind of returns that we're generating today. We do not see that across the rest of the industry, either they're people are focused on chasing federal grants that may not necessarily be the most productive sites or their goal isn't necessarily to maximize returns on charging, but in terms of encouraging people to buy electric vehicles. We know that charging or range anxiety is alongside the upfront price, one of the 2 biggest reasons for even faster adoption of electric vehicles.

And so, some companies are focusing on building charging stations to sell cars. When we think about -- we've got scale -- that translates to advantages in customer experience, the remote monitoring and diagnostics, the kind of marketing and dynamic pricing I talk about every quarter, the supply chain relationships, we talked about those relationships on the call today. These are not things that we see with the rest -- with many others in the space.

The average number of charging stations across this industry amongst our competitors are significantly smaller than us. And so, when I think about these advantages, next-generation architecture, our balance sheet, it seems to me that we'd expect to see a smaller number of other peers in the network in the industry. I'm thrilled when we see our peers building charging stations because that will ultimately encourage EV adoption. And as I said before, I expect that will result in more throughput per store for our network because we've got faster charging stations and better located sites. So that's maybe one way of thinking about this landscape.

Your next question comes from the line of Craig Irwin with ROTH Capital Partners.

So Badar, I was hoping we could dig in a little bit more on the experience you're seeing out there with the new NACS connectors, right? This is an exciting opportunity for you given the size of the Tesla fleet and that it's early days for the OEMs to cut over to the NACS connector where they're heading longer term. Can you maybe unpack for us what the actual utilizations are or early experiences on utilization around NACS? I mean, are you seeing the Tesla drivers come back repetitively to the same locations, use multiple locations? And how should we think about the build here and the tempo? And what would you use to guide your change out of additional locations in the future? Are there specific data points or other metrics you would use to guide the adoption of these cables?

We completely agree with you that the upside here is quite significant. As you said, and we've talked about in prior calls, there are -- there's a significant amount of the vehicle fleet that are Tesla vehicles that are generally not charging on our charging stations. And so being able to access roughly half of all the IO it was just a giant step-up for us. And so, we're pretty excited by it. We also know that switching out a CCS cable that is very productive. I mean we can see we're at an average of almost 300 kilowatt hours per stall per day across the network is not something that we want to -- it's not something we want to take for granted.

And so, we are being very thoughtful about switching out the CCS cables with these NACS cables. It does take us a few months to ramp up throughput per stall on our CCS cables with drivers that are very familiar with EVgo. And so, we want to make sure that we're being thoughtful about that switchover and attracting Tesla vehicles.

In the early part of the year, it was all about making sure that we've got cables that can withstand the high power. So, these are liquid cool cables, and we've got the right technology, and I think we've proven that. We've gone up to 100 cables as of the end of October, and we're going to spend some months now making sure that we're learning everything we need to be learning in terms of all the questions that you asked, what is the behavior of Tesla drivers in terms of the charging stations, repeat at the same location, other locations, how are they identifying EVgo stations? How can we help them to identify and locate our stations even better.

We expect in 2026, when we issue our guidance that this will be a fairly key part of our store rollout schedule. As I said before, I expect a lot of the 2026 will be retrofit. I do expect to be a scale rollout of the NACS cables next year, again, attracting roughly half the market that isn't really charging in our standard network today. That could be a big source of upside. And for the new stations at some point in 2026, perhaps around the middle of the year, new charging stations from the get-go, not just retrofit will include the NACS cables. But you're going to have to wait until our guidance for 2026 before we reveal that. As always, Craig, I think as you've seen, we're going to be pretty thoughtful and pretty analytical about all this.

Understood. That definitely makes sense. So, my next question is about dynamic pricing. In your past couple of calls, you'd shared some real points of success where that's actually driven much better utilization for the network and the overnight. Can you maybe share some more detail with us on where you stand with dynamic pricing, the peak-to-trough variance in rates, the geographic success? What should we be looking at to understand this business and what it could mean for EVgo over the next number of quarters?

It's super exciting, Craig. We've got first -- I will call it a sort of a first version or 1.0, if you will, of dynamic pricing across our entire network. We rolled that out, I want to say, throughout 2024, maybe late 2024, I should say. And we have it across all geographies, across all charging stations. There is some -- there are some limitations around the number of combinations of prices and the frequency of change, which will come through our next version -- our next iteration of dynamic pricing. We were expecting that to be in the fourth quarter of this year, Craig, but we've got such a large fourth quarter build-out. I think as you will have heard from Paul, we've got about 350 to 400 stores that we'll be deploying. This is public and the dedicated stores. So, the owned and operated network in the fourth quarter and the eXtend stores on top of that, we felt that it was more sensible to get -- not to try and take on too many things.

So, the next iteration of our dynamic pricing will get rolled out in the first -- at the end of the first quarter of next year. In terms of what the impact is, I mean, you can see our revenue per kilowatt hour is pretty flat. We're growing throughput per store. We're obviously very happy about that. We see double-digit utilization in the overnight hours which I think is pretty extraordinary. We're talking about 3:00 in the morning. A lot of that is all through dynamic pricing and our approach to the way that we communicate with our customers, so shifting usage from peak times to off-peak or overnight hours. And these are all the kind of things that we're deploying that results in growing throughput per store, growing utilization while minimizing wait times or queuing times and providing opportunities for customers to charge at rates that are appropriate for them.

If I could sneak in a third one. The autonomous vehicle fleet out there is growing, right? There's many more cities where we're seeing adoption and vehicles training, new vehicles in commercial operation, but many cities training. And I'm going to guess that some of these leading companies are using the EVgo the EVgo network or at least their own proprietary stations built and managed by EVgo. How does revenue recognition work for you on these things? When they're in training, are they actually generating revenue already on the EVgo network? Are they already customers? Or do we see site commissioning when they go commercial? And how do we think about fleet growth correlating to demand growth for EV? Is this something that should be sort of 1:1? Or is this something that happens sort of in increments or steps? Any color there for us to understand the -- how these businesses are interconnected?

Yes. Look, the both of that point and the autonomous vehicles are the 2 big sources of upside for the company over the coming years. And we completely agree with you that we see that autonomous vehicles is a potentially very significant and very interesting source of upside. I do see the space growing potentially very quickly. These are all electric vehicles, and they'll all be needing to be charged at fast charging sites, not slow charging. And yes, we are working with all the leading players in the EV space -- in the AV space in terms of building dedicated sites for these AV partners.

Today, the way that we are contracting with them, we've got effectively a monthly rent, so dollars per store per month from when the store is operational, whether anything is charging there or not. And that's the nature of the contracts today. These are -- we're in the foothills, in fact in my mind, in this industry. And so, the structure of these contracts may very well evolve or very likely to evolve over the coming years. But that's the way that we're contracted.

In terms of revenue recognition, it's -- these are long-term contracts. And so there's typically a gain on sale with this long-term revenue stream that's recognized when the store goes live or around when the store goes live.

Anything else, Paul, in terms of revenue recognition that is important here?

No, that's good. That's pretty much how it works. They are long-term contracts with basically a fixed fee, a fixed monthly fee. That's the cash flow that we receive. But because they are long-term contract or some of them are, I shouldn't say they all are, but some of them are long-term contracts under accounting, it's considered to be a deemed sale, so sale lease accounting. So, with some of them with the longer-term contracts, we do recognize a gain on sale of the construction costs. So, there's a markup to what we think is fair market value for this site and then that gain is recognized when the site goes live when the customer -- the client takes over -- the partner takes over the site.

And then after that, it is basically the operating cash flows for maintaining the site that we receive. When we have that gain on sale, we're bringing forward some of the economic value. And so that creates a receivable. So then when we receive the money in, we draw down that receivable over time over the life of the contract. So, it's a bit tricky. I know we said last time, we'll do a webinar or teach-in on how it all works, we'll just sort of provide annual guidance as to where we think in total those will come.

Excellent. Well, you've confirmed for me that it's an exciting business, and I think that's what investors really mean. So, congratulations on the progress across the board.

And your next question comes from the line of Brett Castelli with Morningstar.

Just sticking with autonomy, I wanted to come back to this contract closeout here that you talked about and really understand more medium and long term. Does that at all impact sort of the prior range of expectations you gave us in terms of stalls and build-out for that particular part of the network?

No, it does not. So, the range that we provided last quarter on the last quarterly earnings call for public and dedicated build targets remain valid, remain the same as they are. As Bill asked upfront, next year, we were looking at 1,350 to 1,500 public and dedicated. The majority of that is public. We have not yet broken out how many are public versus dedicated. Dedicated are these stores for autonomous vehicle partners. As Craig said, I think that, that remains a very, very exciting and very interesting source of upside. We just need to make sure that the -- if we are doing a significantly more dedicated stores that they are meeting our return expectations. The economics are attractive for us.

We can see very strong and very attractive economics for our public network. And so, the contract close out, there's really one company that was going to get in the robotaxi space in a pretty big way that do exit, but there are many others that are building out these businesses and we're working with them all.

Okay. And then I just wanted to ask on the charging network gross margin. We've seen more muted margin expansion within that line item here in 2025. Can you remind me for the drivers behind that? And then how we should think about margin expansion within that line item in 2026?

Yes. So, maybe I'll just start and then, Paul, I can ask you just to sort of provide further details. We are seeing charging network gross margin expand, Brett, year-over-year. There is seasonality. So Q3 is seasonally the lowest margin percent typically quarter over the course of the year because we got the higher summer tariffs. We saw that last year. You see that this year. This year is higher than last year year-over-year. And the operating leverage, we've got 2 sources of operating leverage, one in the G&A, which we talked about earlier and then operating leverage within the charging network cost of sales where about 30% of that is fixed. And so as usage per store grows, that margin just expands. And that certainly we fully expect to see continue over the next several years.

But Paul, any other color or any other detail that might be helpful in the near term?

Sure. Yes. So, when we look over year-over-year and say, I'll talk about Q1 '24 first. So, in that quarter, we did have a large amount of breakage revenue, which has got 100% margin. So that's customer credits. When they expire, we recognize that as revenue and as margin, and that increased Q1 '24. If you took that out and then just looked at '24 by quarter versus '25 by quarter, it generally shows an increase, a couple of percentage point increase quarter-over-quarter.

And then if you look at where we are in Q3 '25, 35%, which is about 1% increase over '24. In '24, that increase from Q3 to Q4 was 6 percentage points. And in the prior year, it was about 5 percentage points. So, we would expect Q4 '25 to follow a similar pattern and be 6, 7 percentage points higher in Q3 this year. And we see that pattern moving -- continuing to move up steadily as we've shown in our -- as we get the operating leverage as we've shown in our unit economics as well.

So, when you correct for a couple of those things and look at the that quarter-over-quarter and think about the seasonality, I do think you see improvement.

Your next question comes from the line of Chris Pierce with Needham & Company.

Just one question for me. If I look at last quarter, if we calculate ASP per kilowatt, there was a mid-double-digit increase and then it's kind of a high single-digit increase kind of moving down sequentially in the third quarter. I just want to understand how to think about the pricing levers you guys are pulling and how bill to pull kind of going back to Craig's question on dynamic pricing? Or is it that OEM revenue sort of distorted things in the second quarter and made things look a little more robust than they actually were. I just kind of want to get a sense of pricing across the buckets there and how to think about ASP per watt.

Yes. Paul, do you want to take that?

Yes. So, when I look at the pricing charging revenue overall, I see Q2 versus Q3 to be broadly flat, and I see, of course, the costs energy costs, in particular, increasing in Q3 as we talked about because of summer tariffs, the seasonality there. So, we see a bit of a squeeze in the margin in Q3 as expected. But as I mentioned before, our pricing has been generally pretty steady, and our margins have been showing a general increase overall, which we expect to continue into Q4 and follow a similar pattern into '26 as well. There is some mix effect when we look at pricing, we have to think about where the volume of energy is coming from and being dispensed to. But it's been broadly flat across the portfolio in the quarter.

There are no further questions at this time. I will now turn the call back over to Badar Khan for closing remarks.

Great. Well, look, thank you, everybody. We had another solid quarter of great operational performance and hitting strategic milestones. We can clearly see that we're nearing the inflection to adjusted EBITDA breakeven. And with the operating leverage that we have, we can see accelerated EBITDA growth coming soon. And I look forward to sharing that progress with you on the next call. Thanks, everybody.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Thank you for standing by. My name is Kate, and I will be your conference operator today. At this time, I would like to welcome everyone to the EVgo Q2 2025 Earnings Call. [Operator Instructions] I would now like to turn the call over to Heather Davis, VP of Investor Relations. Please go ahead.

Good morning, and welcome to EVgo's second quarter 2025 earnings call. My name is Heather Davis, and I'm the Vice President of Investor Relations at EVgo. Joining me on today's call are Badar Khan, EVgo's Chief Executive Officer; and Paul Dobson, EVgo's Chief Financial Officer. Today, we will be discussing EVgo's second quarter 2025 financial results, followed by a Q&A session.

Today's call is being webcast and can be accessed on the Investors section of our website at investors.evgo.com. The call will be archived and available there, along with the company's earnings release and investor presentation after the conclusion of this call.

During the call, management will be making forward-looking statements that are subject to risks and uncertainties, including expectations about future performance. Factors that could cause actual results to differ materially from our expectations are detailed in our SEC filings, including 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 Investors 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 Investors section of our website. With that, I'll turn the call over to Badar Khan, EVgo's CEO.

Thank you, Heather. EVgo had yet another excellent quarter with strong operational performance and achievement of important strategic milestones. We had particularly strong revenue this quarter, up 47% versus the same quarter last year. Adjusted EBITDA was more than $6 million better than last year, bringing us closer to our goal of breakeven adjusted EBITDA for the full year.

We had 4,350 stalls in operation and ended the quarter with $183 million in cash, cash equivalents and restricted cash, which is $12 million higher than the prior quarter. And most importantly, does not include $65 million in gross proceeds from the first drawdown from our commercial bank facility and expected 30C sale proceeds in August.

On July 23, we closed on the largest and first-of-its-kind commercial bank financing for charging infrastructure in the U.S. for $225 million with the ability to expand to $300 million and have already received a $48 million first drawdown. This is a major strategic milestone for the company, enabling us to accelerate our expansion and diversifying our funding sources with low-cost, non-dilutive capital.

As you will see, we expect to be able to increase our ending 2029 public stall guidance by approximately 3,500 more stalls than we had previously estimated to roughly 14,000 stalls. Strategically, EVgo is now very well positioned competitively as one of the best capitalized players in the sector. As always, we are focused on being disciplined in allocating capital, leveraging debt funding sources and the growth of our balance sheet.

At this time, we do not have a request in front of the DOE LPO for our next advance. One of the many attractive features of the DOE loan is that there is no time limit, where we need to request advances for specific tranches of eligible costs we incur other than the overall 5-year availability period.

And finally, we've passed enough milestones this year to be able to forecast a reduction in net CapEx per stall for 2025 vintage stalls by 28% versus our initial expectations. A reduction in net CapEx per stall of this magnitude results in significantly higher returns.

The outlook for EVgo as an owner-operator of DC fast charging remains very bright, with demand growth outstripping supply growth. The latest independent forecasts project that the increase in electric vehicles in operation is outpacing the more modest increase in the number of DCFC stalls in the U.S. These latest forecasts take into account all of the federal administration's policies in electric vehicles, which results in EV VIO over 4x higher than today by 2030.

As we're seeing from GM, Ford and many others, major automakers continue to prioritize a growing lineup of affordable electric vehicles that appeal to all customer segments. Forecasts of the growth in DCFC stalls are not as robust, but anecdotally, we see a slowdown taking place among both a large number of smaller companies, who are likely going to struggle to attract capital in this environment and also a small number of larger companies whose parents may be allocating capital to other priorities. The DCFC forecast shown here represents the industry continuing to grow at the same pace it did over the last 12 months.

As a result, we expect that the recent trend of more electric vehicles per fast charger is likely to continue, resulting in a promising macro environment for EVgo in this coming 5-year period, which we expect will continue to drive up both EVgo market share and throughput per stall. This macro environment continues to be supplemented by multiple additional tailwinds that continue to show positive trends, like the electrification of rideshare, autonomous electric vehicles and more affordable vehicles in both the new and used electric vehicle markets, attracting more customers without at-home charging and thus reliant on public fast charging. In June, Uber disclosed that the number of their EV drivers globally was up more than 60% versus the year prior. And in the U.S., only just over 1/3 had a dedicated home charger.

We are very pleased to close the commercial bank facility provided by a syndicate of global project finance banks led by SMBC and includes Royal Bank of Canada, ING, Bank of Montreal, and Investec. With an initial 325 basis point spread, this loan demonstrates the creditworthiness of our business that these commercial banks see and the confidence the banks have in the resilience of the cash flows generated by the ultrafast charging infrastructure EVgo is building across the United States, to give customers more choices to charge their electric vehicles.

This facility is complementary and incremental to our $1.25 billion DOE loan with a similar structure with standard project finance terms. It offers tremendous flexibility and can be used to finance the build-out of more EVgo-owned stall types, including dedicated hubs for autonomous vehicle partners.

We received a $48 million advance on July 24, and we have the ability to draw down on the facility monthly. We have the ability to go faster and build a higher number of stalls or go slower with lower deployment targets. All new EVgo-owned stalls can now be levered going forward.

Additionally, this bank facility represents an important milestone in establishing long-term relationships with commercial lenders. We believe the opening of the commercial bank project financing market as a source of capital for public fast charging infrastructure reflects the maturity of the company, the profitability of the EVgo network, and confidence in management.

With the financing we now have in place, together with our targeted CapEx per stall and reinvesting excess operational cash flow over the next 5 years, we now expect to be able to more than quintuple our annual stall build schedule from 825 stalls in 2025 to up to 5,000 by 2029. That rate of growth in 2029 is more than double our earlier estimates. This accelerated pace meaningfully differentiates EVgo amongst U.S. fast charging companies and results in a level of scale that will become harder for others to replicate over time and deepens the competitive moat around our business.

The second strategic development this quarter is that we're now forecasting a 28% reduction in 2025 vintage net CapEx per stall from our original estimate. This is an exciting milestone. Even including the impact of global tariffs, we are still expecting an 8% improvement in vintage gross CapEx per stall versus what we initially expected for 2025. This improvement is driven by savings from lower contractor pricing, material sourcing, and increased use of prefabricated skids, some of which we shared in the last earnings call.

Today, however, I'm able to share that we now expect vintage CapEx offsets to be around 50% higher than we originally expected because more stalls we're operationalizing this year are expected to have state grants associated with them. Unlike many other charging companies, we have a large enough project pipeline, where we can now move the timing of operationalizing assets from 1 quarter to another and from 1 year to another. That flexibility allows us to capture more state grants wherever those opportunities may arise.

As a reminder, capital offsets come from 3 sources: state and utility incentives, OEM infrastructure payments, and federal incentives like 30C. Our forecasted performance this year is a reminder that regardless of recent changes to federal incentives, state grants incentives are alive and well. 30C will remain in effect for assets placed in service until the end of June 2026, 9 months longer than many other incentives created by the IRA. As a result, we expect net vintage CapEx per stall to be significantly lower this year, materially enhancing our return on capital, especially considering the top 15% of our stalls are already generating $50,000 in cash flow per stall per year against a net onetime average CapEx of $74,000.

Two consequences of shifting our project portfolio to capture state grants is that a certain number of stalls that were due to be operationalized in Q3 will now shift to Q4. And secondly, stalls with state grants tend to be a little less productive in terms of throughput per stalls in the first year or 2 than other stalls without state grants. However, the lower CapEx more than makes up for it when we look at project returns. Our long-term expectation is to continue lowering gross CapEx per stall as a result of our next-generation charging architecture that remains on track for the end of next year.

That said, we conservatively do not assume capital offsets are as high as the last 2 years, which still results in very favorable project returns, especially given the higher annual cash flow per stall levels we expect to reach by 2029.

Let's now briefly turn to progress on our 4 key priorities: Improving the customer experience, operating in CapEx efficiencies, capturing and retaining high-value customers, and securing additional complementary nondilutive financing to accelerate growth.

Improving customer experience remains our #1 priority, and our strong momentum from last year continues. This quarter, we experienced lower uptime on certain equipment types due to faulty firmware updates that were largely rectified in July, and we decided to take that opportunity to tackle some legacy hardware issues across multiple charger types that resulted in higher associated maintenance costs. These efforts are fully aligned with our goal to continually improve the customer experience, and we are already seeing these efforts pay off with much higher throughput per stall in July. Building larger public sites with 6 to 8 stalls is now our standard configuration. At the end of the second quarter, 24% of our sites had 6 stalls or more.

We continue to deploy high-power chargers. The number of stalls served by a 350-kilowatt charger is now 57%, up from 41% a year ago and 25% 2 years ago. Autocharge+, our seamless plug-and-charge capability, continued to gain traction, accounting for 28% of sessions initiated. Finally, our customer success metric of One & Done increased 1 percentage point this quarter versus last year, with 95% of sessions resulting in a successful charge on the first try.

As we detailed in our first quarter earnings call in May, we expect that the impact of increased tariffs on our CapEx will be more than offset with capital efficiencies we've identified and implemented, and there is near 0 impact on our operating costs from tariffs.

EVgo continues to meet all our milestones in the development of our next-generation charging architecture we are jointly developing with Delta Electronics. We are on track to have our prototype and initial deployment in the back half of 2026. We remain focused on improving the profitability of the overall business while investing in the future growth of the company. We expect continued improvement in G&A as a percent of revenue throughout 2025.

Over half of our throughput in Q2 came from frequent use sources, rideshare, OEM charging credit programs, and EVgo subscription plans. This quarter, we've added to our dynamic pricing, digital marketing, and customer acquisition and reactivation capabilities with the deployment and use of AI agents to optimize and increase the effectiveness of our campaigns.

In certain geographies, we launched seasonal-based pricing to help cover the increased costs from summer utility tariffs. Our second pilot site with native NACS cables went live in June. The focus of the initial pilot in February was to validate technology. And for the second pilot, our focus is to get an early read on our ability to attract Tesla drivers with the NACS cables installed. While it remains very early, we are encouraged by the fact that since going live with the NACS cables, this site has had significantly more usage from Tesla drivers as it had prior to installing the NACS cables.

Once we scale these cables across the rest of our network and because our charging stations are faster than Tesla and closer to where Tesla drivers live, work and go about their lives, we expect to see potentially significant growth in usage per stall. This is because we expect to attract a greater share of Tesla drivers than before, and these drivers still make up the majority of EVs on the road. In August, we expect to add 30 more NACS cables to more sites, and we expect to add around 100 NACS cables to sites on a retrofit basis through the rest of the year.

Finally, we are in construction of our first flagship sites with General Motors. We look forward to opening these stations, which will feature up to 20 stalls and offer features like overhead canopies, lighting for an elevated customer experience.

We've made huge strategic progress on financing this quarter with the closing of a low-cost commercial bank facility. We expect to close our second sale of 30C income tax credits this week for our 2024 vintage portfolio for an anticipated $17 million of gross proceeds. As I said earlier, we now expect 45% CapEx offsets for our 2025 vintage stalls.

Paul will now cover more detail on the commercial bank facility and how that relates to higher long-term estimates, our financial performance for Q2 and our updated outlook for 2025.

Thank you, Badar. I'll walk us through the summary loan terms for this facility. Flexible loan structure allows EVgo to build over 1,500 new public and dedicated stalls over the next 3 years and finances the 400 existing public stalls we added as collateral.

As Badar mentioned earlier, facility allows us to finance stalls that wouldn't have been eligible for debt financing under the DOE loan. The interest rate is SOFR plus 3.25% with a 25 basis point increase at the beginning of year 5. Facility has a 5-year term and a 3-year deployment period.

EVgo will be able to draw against the loan facility monthly after stall is operationalized for 60% of costs, including CapEx, capitalized G&A, and $31,000 of deployment expenses. As collateral for the loan, EVgo contributed 400 operational stalls into a project level SPV, and we received $48 million of gross proceeds in July after closing. We expect to see incremental network growth from this facility starting in 2026 as it typically takes EVgo 12 to 18 months to get a site operational.

In terms of expected stalls in operation, we are now including estimates of growth net of removals, averaging roughly 130 per year through our EVgo ReNew program over this entire period, where we are removing legacy equipment from the network.

EVgo now is fully capitalized to have roughly 14,000 projected public stalls by the end of 2029, which will increase operational efficiencies by leveraging economies of scale. This is approximately 3,500 stalls more than our previous estimate.

As described in our fourth quarter 2024 earnings call in March, our unit economics continue to grow, and we expect to realize the operating leverage in our model through increased throughput per stall per day, leveraging fixed costs per stall, dependent costs such as rent and a reduction in maintenance costs through our next-generation charging architecture.

EVgo anticipates that in 2029, our stalls will generate $90,000 to $104,000 per year in revenue, charging network gross margin per stall in the range of 50% to 52% and annual cash flow per stall in the $38,000 to $47,000 range.

Adjusted EBITDA generation is also particularly strong. Because these per stall cash flows include all costs other than fixed costs, which will be covered by this year, the stall base cash flows fall straight to the bottom line. So by 2029, the additional roughly 5,000 stalls that we plan to build that year will generate approximately $200 million incremental adjusted EBITDA annually. As we have discussed before, this represents a very compelling annual return on a onetime net CapEx per stall of $95,000. Applying this high and low-end annual cash flow per stall from our unit economics to the anticipated stalls in operation at the end of 2029, you have a very compelling business with $1.2 billion to $1.5 billion in annual revenue from the owned and operated charging business, generating $380 million to $570 million in annual adjusted EBITDA at 32% to 38% margins. We are assuming our total adjusted G&A increases up to 2x in real dollar terms as we add to our growth G&A to build out the network, which again demonstrates the operating leverage in this business as the network is growing 4x.

With full utilization of the current loans, we expect to exit 2029 with a low net debt to adjusted EBITDA ratio of under 2.5x which provides us with additional debt capacity to finance growth well into the future. Since infrastructure companies with predictable adjusted EBITDA generation and margins typically have higher leverage ratios of 5 to 6x, our expected ratio of less than 2.5 would provide us with significant incremental leverage capacity.

Now turning to more detail on our second quarter results. Over the past 3 years, we have grown our operational stall base by 2.6x, while our revenues have grown 14x. Increasing our scale and maintaining our focus on costs allows us to deliver improving bottom line performance.

Our public network throughput per stall has grown 2.5x in the last 2 years, significantly outpacing our public charging network stall growth of 1.4x. Throughput per public stall was 281 kilowatt hours per stall per day in Q2 compared to 230 a year ago, a 22% increase and up 6% sequentially. After a recent firmware update and incremental investment in Q2 maintenance, July average daily throughput approached 300 kilowatt hours per stall per day.

In the second quarter, total public network utilization increased to 22%, up from 20% a year ago. Total throughput on the public network during the second quarter was 88 gigawatt hours, a 35% increase compared to last year. Revenue for Q2 was $98 million, which represents 47% year-over-year increase with growth in nearly all revenue categories. Total charging network revenues were $51.8 million, exhibiting a 46% year-over-year increase.

eXtend revenues were $37.4 million, delivering growth of 35%. We delivered more charging equipment to PFJ in the second quarter than anticipated as they accelerated their purchasing. Ancillary revenues of $8.8 million were up 157% versus last year, driven primarily by growth of the hubs business for autonomous vehicle companies.

Charging network gross margin in the second quarter was 37.2%, up 210 basis points from the prior year. Adjusted gross profit of $28.4 million in the second quarter of 2025 is up from $17.7 million in the second quarter of 2024. Adjusted gross margin was 28.9% in Q2, an increase of 240 basis points compared to last year.

Adjusted G&A as a percentage of revenue also improved from 38.5% in the second quarter of 2024 to 30.9% in Q2 of this year, demonstrating the operating leverage effect. Adjusted EBITDA was negative $1.9 million in the second quarter of 2025, a $6 million improvement versus the second quarter of 2024.

Now turning to our 2025 guidance. EVgo anticipates we will add 800 to 850 new public and dedicated stalls in 2025, with over half the stalls going operational in the fourth quarter. Total fiscal net CapEx has been reduced to $140 million to $160 million, reflecting the capital efficiencies we are realizing this year and faster expected development timelines, resulting in less capital spend in 2025 for 2026 vintage stalls. In addition, we forecast to add new eXtend stalls of 475 to 525 this year.

Revenue for the full year is expected to be $350 million to $380 million, an increase of $5 million at the midpoint compared to our prior guidance. Charging network revenue are estimated to be roughly 60% of total revenues in 2025. We're expecting sequential improvement in the third and fourth quarters for charging network revenues. We expect the 2025 charging network margin profile to be like 2024. Our third quarter charging network margin will decrease seasonally due to higher summer electricity rates and resume its upward trajectory in Q4.

Full year eXtend revenues are anticipated to increase around 25% versus last year, and ancillary revenues will be more than double this year. We expect both eXtend and ancillary revenues will be lower than Q2 in the third quarter. EXtend revenues are expected to be relatively evenly distributed in the third and fourth quarter. Ancillary revenues are anticipated to have a much higher fourth quarter following revenue recognition milestones.

We're investing in accelerating the growth of EVgo, including investments in our operations and deployment team to increase stall growth as well as our next-generation architecture. Adjusted G&A for 2025 is expected to be flat to the Q4 2024 run rate plus inflation, reflecting investments in growth with some offsets due to efficiencies. These investments for accelerated growth will continue in 2026, and we, therefore, anticipate similar growth in adjusted G&A next year.

EVgo continues to make progress towards adjusted EBITDA breakeven. In 2025, we continue to expect adjusted EBITDA in the range of negative $5 million to positive $10 million. Following our anticipated revenue trajectory for the back half of the year, we expect Q3 adjusted EBITDA to be negative and lower than Q2 and positive for the fourth quarter. Topline growth financed with low-cost nondilutive capital, coupled with leverage in our operating model is expected to deliver compelling shareholder returns. We look forward to keeping you apprised of our progress.

Operator, we can now open the call for Q&A.

[Operator Instructions] Your first question comes from the line of David Arcaro with Morgan Stanley.

Maybe first on the CapEx trends and offsets here. Great to see. I was just wondering if there was a geographic trend that's driving the capital offsets going to 45%. Were you targeting states in a different way based on demand that you're seeing? Or were there changes in state incentives? Just wondering what shifted that geographic trend around.

Yes. Well, look, I think -- thank you, David, for the question. I think that one of the key things we wanted to communicate here is that, not only are we focused on EBITDA generation with strong margins, we are also very much focused on delivering strong returns on capital for shareholders. And so, being able to lower our vintage CapEx per stall by almost 30% is very much aligned with that. Our first priority, of course, is to lower gross CapEx per stall, which is a trajectory we've been on for some time, and we've been successful at, and we are looking to continue with our next-generation architecture.

On the offsets, we're absolutely pleased with where we are this year. We had a very high level of offsets for vintage 2024 in the 50% range. This year, the offsets are also looking like they're going to be very strong. We've seen that already for our first half year deployments where offsets are at that sort of 45% range.

And these grants are really coming from all over the United States, to be perfectly honest. For the first half of the year, we have a lot of grants in -- grants and incentives from California, but the rest are coming from states like Florida, Ohio, Pennsylvania, Washington. And so, it's really all over the United States. I think a key point here, of course, is that regardless of what happens with federal incentives, state grants and utility incentives remain alive and well.

And I was just wondering, any updates on the DOE loan in terms of availability, any recent conversations you've had around drawdowns that you would highlight? I know you're not currently looking for one, but curious just any background color there.

Yes. I mean, the project is performing very strongly, and that's the nature of the dialogue that we have with the DOE. It represents excellent credit quality, which hopefully you can see from our earnings today. We are not dependent on the IRA or 30C remaining in place, and so our dialogue with the DOE LPO staff remains a very productive conversation.

I think the big strategic news this quarter is that we are no longer reliant on just one source of financing. The proceeds, as we just laid out today from the commercial bank loan and the gross proceeds from 30C are 3x what a quarterly advance would have been if we -- from the DOE this quarter. And so, we're very focused on not just being disciplined in our allocation of capital, but also disciplined in the growth of our balance sheet.

And I think the good news or one of the many sources of good news is that there's really no time limit on when we request advances for eligible CapEx with the DOE loan other than the 5-year availability period. And so we can incur the CapEx now. And if we want to drop it into the DOE loans at some point within the next 5 years, we can or with the commercial bank facility. Of course, the commercial bank facility also allows us to fund stalls that are not eligible for the DOE loan, which I think is also very attractive. It allows all of our stalls at this point to be levered going forward.

Your next question comes from the line of Chris Dendrinos with RBC Capital Markets.

I wanted to ask a little bit on the utilization rate this quarter. And I think you mentioned that there was a firmware update that went through. And then in July, you all had, like, I guess, maybe a significant increase in the utilization rate as that got rectified. Can you maybe just provide a bit more detail about that? Maybe how long the issue was lasting and sort of what you're seeing now coming out of that?

Thanks, Chris. Yes, we did have a faulty firmware update at the beginning of the quarter in Q2, which is largely addressed at this point. We -- given that we had these issues, we did proactively take that opportunity to address some legacy charger issues at the same time and invested in maintenance to get -- really just to get a stronger network. We thought that made sense to tackle both issues at the same time. And then, as we said on the call, we can see average throughput per stall for July approach 300, which is quite a bit higher than what we saw in the Q2 average.

I think what's really kind of most interesting here is that as an indication of true demand on the network, the average throughput on the chargers that -- where we weren't experiencing these issues was meaningfully higher than the chargers, where we were taking these steps on maintenance and the firmware. And I think that actually also really validates the decision and the path that we're on with our next-generation architecture where -- as I said before, I don't believe that really anybody else in our sector or very many others in our sector is able to do where we own the firmware and the development of critical components like the dispenser. And it's very much part of our journey of taking that customer experience to the next level.

And then maybe on the NACS cable, and you highlighted some promising, I guess, call it, initial results from some of the deployments that you've done so far. I guess how are you thinking about deploying those longer term? And sort of what are you looking for that would maybe drive you to accelerate deployment? Or are you already seeing things given the kind of results you've seen so far that would drive you to maybe try to accelerate the deployment of those NACS cables?

Chris, I mean, I think that the NACS cable and the autonomous vehicle space are both, I think, really interesting sources of upside for the company here. And we can talk about the AV space maybe later on. But on the NACS, we had a couple of pilot sites in the first half of the year. One was around technology validation. It's super important that we are, again, focusing on the customer experience, making sure the technology works. But the second site was really geared around are we able to attract more Tesla drivers.

And I would say that I think the team is really pretty excited about the results. They're early, but what I said on the call is that Tesla driver usage was significantly higher on that site than pre-installation of the NACS cable. I do think it's early days. We're going to have about 30 cables, NACS cables, installed in August. And we're -- at this point, we're looking at 100 for the full year. These all retrofit before we start doing native, so -- not retrofit, but original equipment connectors in next year. But -- I mean, I think that if we continue to see what we saw so far, for sure, we'll be looking at our ability to deploy more NACS cables.

But we want to just be certain about this. Everything that we've done at EVgo has been very thoughtful and very analytically based, whether it's the algorithms and site selection through to the AI in our marketing or AI agents in our marketing and customer outreach. Here, we don't want to pull out a productive CCS cable unless we're sure we can make it an even more productive NACS cable, which, again, the first site is definitely showing, but that's what we're looking at.

Your next question comes from the line of Bill Peterson with JPMorgan.

This is Mahima Kakani on for Bill. Your updated build schedule looks quite robust, especially in the '28 to '29 time frame. Can you help us understand why the builds are so back half weighted if you have the liquidity available to you now? And how do you think about balancing the EV VIO to DCFC ratio across the market versus capturing market share early on from competitors potentially?

Yes. I mean, look, I think the -- on the build schedule, there are really 3 things that have increased the schedule versus what we last indicated, which would have been about 6 months ago after the DOE loan. Those are the commercial bank facility and the fact that we are lowering our CapEx per stall. We've been talking about it for a year, but we've never reflected that lower CapEx per stall in our long-term forecast. And then lastly, we are generating quite significant excess operational cash flow. And so, we thought for simplicity's sake, we would assume that we'd be reinvesting that cash flow into new stalls.

To be honest, the reality is, as Paul said, we've actually got fairly a reasonable amount of capacity for additional leverage in the back half of this 5-year period. But regardless, we think that's a good enough proxy. And that results in a very significant increase of stalls that we deployed that we're now fully capitalized for, which I think is the important point.

In terms of whether we could go faster in the very near term, the next year or 2, we really are -- we've been talking about a 12- to 18-month time line that takes from start to finish to deploy stalls. And that's still, I think, in place. I think in the medium term, though, we are looking at ways where we can reduce that overall elapse time. We know and the market knows that it is possible to deploy at a much higher rate. We've seen certainly one competitor deploy at a significantly higher rate. And of course, we've got a lot of folks in our team from Tesla today. And so I expect that over the course of the next year or so, you may hear me provide updates on what we're doing to be able to reduce that elapse time and effectively go bigger and faster.

Maybe to follow up on an earlier question about utilization. Should we expect to see any kind of seasonality from here on out? And do you maybe expect to see increased usage by Tesla users with the NACS integration driving higher utilization over time? Also, do you recognize that also we've seen third-party reports that utilization kind of fell in the second quarter across the U.S. public network. So if there's anything else to call out there, that would be great.

Well, for sure, on the NACS cable, I mean, that's been the hypothesis that we've talked about, and so to the earlier question, we are quite excited about that. It's early days, and we don't want to get carried away. But I think it's really important just to bring out something that we've also been talking about, which is that we saw pretty healthy growth in throughput per stall sequentially, and that was because of rising charge rates. The higher the charge rate, the less the utilization we need for the same kilowatt hours dispensed. Our long-term forecast is actually only 23% to 26% utilization, but with an 80-kilowatt charge rate. And that actually translates to about a usage per stall -- kilowatt hours per stall that's about 60% greater than today.

If we look back over the last 3 years, our charge rates have actually grown about 20 kilowatts in the last 3 years. And that's when we had slower chargers. 3 years ago, only 12% of our chargers were 350 kilowatt. Today, it's about 57%. 3 years ago, the charge rates in the cars were slower. So 20 kilowatts in 3 years going backwards, our long-term unit economics, as you can see in the chart, suggests a growth of just around 30 kilowatts in 4.5 years, but with faster machines and faster charging cars. And so we're -- this is a tailwind that we've been talking about, and I think we're really seeing that come through. And so it's really not just about utilization. It's really also about utilization and charge rate that's driving the throughput per stall up, and we're really pleased to see that.

And to your question about seasonality, yes, we do have seasonality in charge rates typically. We have seasonality in different parts of our business. But on charge rates, they tend to be a little lower in the winter months, tend to be a little higher in the summer months. But the growth that we've seen in the last 3 years. Operator, can we go to the next question?

Your next question comes from the line of Andres Sheppard with Cantor Fitzgerald.

Congratulations on the quarter. I think a lot of our key questions have been asked, but I wanted to maybe hone in on self-driving technology. As we're ramping up robotaxis and self-driving across the country, curious if you can maybe give us a sense of kind of your strategy to capture as much of this market share as possible. How are you thinking about capturing the autonomous vehicles that are ramping up? And what are some plans to maybe differentiate EVgo?

Yes. I mean, look, I mean, along with the NACS cable, I think that this is one of the 2 sources of upside in the business that's probably not in anyone's forecast. We do think it's a really interesting and potentially significant source of upside if indeed the AV space grows, which certainly it does seem as though it's going to.

I know as I think you pointed out and others have, these are going to be electric vehicles and they're not looking to be charged in slow charging locations. That makes 0 sense. So we have been building and operating dedicated sites for autonomous vehicle partners for a number of years. Last year, we more than doubled the number of stalls at these dedicated sites to serve the space to 110 stalls. And we actually separated it out in our stall disclosure. And our public disclosure, it's sort of wrapped up in what we call ancillary at the beginning of this year.

As Paul said in our guidance, we do expect to see a more than doubling of ancillary revenues this year over last year. And so we're pretty excited by it. We think that the kind of parties that we work with are pleased with the way that we're able to deploy fast charging speeds that are appropriate for the -- for those vehicles. Obviously, we're pretty good at it, building charging sites, whether they're public or for dedicated. And so we think that we've got a great relationship with these folks, and we're excited about the dialogue that we're having with them. And of course, now that we're fully capitalized and the commercial bank facility allows us to lever those stalls where we don't think they're eligible for DOE loan funding, we think we're in actually a really pretty good space and pretty good place.

And maybe just as a quick follow-up. Can you just remind us what are maybe the key catalysts to look for maybe in Q3 and Q4?

Well, look, I mean, we are just focused on executing the business, Andres. We're fully capitalized at this point. The charger issues that we talked about, the firmware and our choice to invest in the maintenance of some of these legacy issues is largely behind us, but we expect to be pretty much wrapped up with that activity by the early part of this Q3 period. I think that sort of just watch us execute. That's -- we're just heads down executing, and that's really what we're focused on.

Your next question comes from the line of Stephen Gengaro with Stifel.

Two things for me. The first is pretty straightforward. I'm not sure you'll want to answer. But when we think about your guidance for this year, do you think as you get into next year you'll be positive EBITDA in every quarter?

Yes, Stephen, we're not going to get into the guidance for 2026, it's just so early. But I think that if you think about what's really driving EBITDA for us, it is the measure that we've spoken about for the last year -- the last several years now, which is that throughput per stall per day, and that's rising. That continues to rise. It's rising sequentially.

Yes, there's sometimes seasonality in that, again, in the winter months. It can be a little bit flattish in the kind of Q4 to Q1. But yes, that's going to be a big driver of growth in the business, and that's what we're seeing. So I think that's probably all I'm going to share at this point in terms of 2026.

And I guess the other thing, you mentioned earlier in the call in your prepared remarks about the economics of some of the chargers that are being driven by grants and maybe being a bit lighter in the beginning of the life cycle. Is that something that we will observe in the numbers [indiscernible] throughput per stall? Like just so we kind of know what to look out for. Or is it just not big enough to kind of really move those numbers around too much?

It can a little bit, Stephen. And I think that -- I think the really important point here is -- a couple of points here is that these are not federal incentives, right? So that's, I think, number one. I think that the state and utility space is very productive and supportive for EV charging infrastructure build-out.

I think that the second point is that even if they're a little less productive in the first sort of periods, first few periods, these are phenomenally strong returns on capital invested. And so from our perspective, yes, we're obviously looking at EBITDA generation and very strong EBITDA margins, which is the business that we've laid out here. But it's also important to us that we're deploying capital that's delivering strong returns for shareholders on the capital invested. And I think that's what we're seeing with some of our choices.

I think the fact that we've got such a large pipeline, which a lot of other smaller charging companies just don't have, allows us to move some stalls where we think we can get some great grants from one quarter to another or from 1 year to another. And that's what we saw this year where -- we did actually move some of our sites around. It forced us to push some sites from Q3 into Q4, but we thought that was worth it because the -- just the level of offsets is just so great and the returns, of course, on that capital is so strong.

And if I could ask you one other quick one. Understanding the NACS cable rollout, we -- big fans of Tesla, but not everybody is these days. Is there any targeted marketing that you're thinking about or you've done for Tesla drivers, because you see these stickers on Teslas that -- owners that are mad at Elon, et cetera. Is there -- has anybody thought about something like that you've done? Or are you thinking about any kind of campaign like that?

Yes. I mean, look, I know that this space is -- feels like it's very heavily politicized. We're running this business as an infrastructure business where we're deploying capital that's returning strong returns for shareholders and strong EBITDA generation, strong margins. We try not to get too political about stuff. We just think that's not necessarily always the best thing. However, we're very analytical. So where we're putting these NACS cables over the course of this year are in locations where we know there are Tesla drivers, where we -- those Tesla drivers, we expect will come over to our stations because there isn't a Tesla supercharger nearby.

And as I said on the call today, we're just taking our capabilities to the next level. We've got these AI agents now that are creating messages, and they are figuring out which customers to send which message to at what time. And I think that we're -- that's sort of broadly what we're doing to get sort of the right level of interest at our stations at the right time. And I think that for the NACS cables, where we're attracting Tesla drivers with, frankly, charging stations that are faster. These are largely 350-kilowatt stalls that we're deploying today versus the supercharger network of 250 and closer to where they live with their amenities. We think that's a very interesting and successful -- should be a very successful approach.

Your next question comes from the line of Craig Irwin with ROTH Capital Partners.

Paul, in your prepared remarks, you mentioned the ancillary revenue progression over the next couple of quarters, the fact that we should have a pretty strong fourth quarter. Can you maybe give us a little bit of color as far as the strength that we had in the second quarter, and how that's likely to materialize relative to your execution over the last couple of months? And anything else you could share to help us understand the way this is rolling out?

Sure. Yes. So yes, we did have strong non-charging revenue overall in the quarter, both ancillary and the eXtend business. So the - with the Xtend business, I'll just talk about that one for a quick second. So what we saw was higher level of equipment sales with eXtend as our partners sought to bring forward equipment purchases.

And then with the ancillary revenue, a large part of that growth is due to our hubs business. So when we set our guidance for the year -- the hubs business is a relatively new business. We're still learning what the economics could be and negotiated contracts. And so now we've got better line of sight overall into what our hubs business is going to generate this year in terms of revenue. So with the ancillary revenues, which is largely the hubs business, we expect it's going to more than double from last year, from 2024. We're expecting also to have a much higher fourth quarter as well, given some of the revenue recognition nuances in the hubs business. Again, it's largely because we now have better line of sight in the near term as to where we expect it's going to end up. There is some lumpiness to it, I will admit with the hubs business due to some of the accounting. And as we go forward and it becomes a much bigger part of our revenue mix, we'll provide more specific guidance on it that I think will be helpful.

So then Badar, you're clearly executing well versus your financial targets, right? You're delivering, and you have been for several quarters. But it does look like you're adding a little bit of expenses to the model. So maybe there's a bigger opportunity or a different opportunity set. Can you talk a little bit about your priorities as you look for opportunities for investment over the next couple of years? Real-time pricing, I guess, is one thing that's got a lot of attention over the last several months. There are several things we could touch on. What do you see as the most important areas for investment at EVgo over the next several quarters?

Thanks, Craig. I mean, look, the single biggest use of cash in this business is the capital that goes into the charging infrastructure. And so we are very focused on both capital efficiencies per stall, that's gross CapEx per stall. We've talked about vintage offsets for quite a bit here. But the first priority is on gross CapEx per stall, which we've been lowering. But I think in part of that journey in terms of your question is the investment we're making into our next-generation charging architecture. We are -- our strategy is to be able to get the benefits of being vertically integrated without being -- without the risks and the cost of manufacturing. That's why that partnership with Delta Electronics is so important. It's why the -- our taking ownership of the firmware, which is the issue that we saw in Q2 is so important. And it takes that customer experience to the next level. That is what we're investing in, and we see that investment show up in OpEx. But ultimately, it's -- the goal there is to lower our gross CapEx per stall in line with the slide that we showed earlier for the second half of 2026.

But you're right, we're also investing in marketing, in customer marketing, customer approach, the databases, these AI agents. We've invested over a long period in the algorithms behind our site selection, which we think is one of the many sources of competitive advantage for us. So you picked up on -- dynamic pricing is in an area of investment since last year, again, which we can see paying off in the unit economics schedule. So we're thrilled. But I think the -- I think one -- maybe the last point to leave is that the company has tremendous operating leverage.

If you look at the fixed costs in this business versus the total G&A, it's pretty high. And so once you cover your fixed costs, all of that cash flow above fixed cost falls to the bottom line. And that's why this business model is just so -- to me, so compelling. The EBITDA generation after this year is really pretty exciting. And that's what we're trying to convey when we put -- every few months when we put out these long-term financials.

Fantastic. And just another one, if I may. Firmware, you mentioned the firmware issue in the quarter. Can you maybe share with us what sort of a headwind this was on throughputs across the network? Or any other color for us to understand the financial impact?

Yes. I mean, look, we said that in July, the firmware issues, they're kind of -- at this point, they're largely behind us. We are -- we did, at the same time, decide to take some -- put some stalls into maintenance because we are seeing these issues anyway in terms of customer experience. So that will be largely addressed through the first part of Q3.

But if you look at our July throughput, it was approaching 300 kilowatt hours per stall per day. And that's quite a bit higher than what we saw in the average in Q2, and that's probably a good enough proxy for where throughput -- for your question in terms of where throughput could have been.

Your next question comes from the line of Christopher Pierce with Needham & Company.

I was just wondering, is it -- are you seeing increased competition for rideshare drivers? I mean, I know it's just one article, one headline, but we talked about 40-plus stalls going in at LAX and things like that. I just was wondering if sort of more people are realizing how interesting this business is or the frequency with which these drivers have to charge.

I mean, look, it's hard because there's so many companies in the space that are private and small. It's hard to know, to be perfectly honest. When we look at our own throughput, rideshare has been pretty steady in the 20% to 25% of our total kilowatt hours for I don't know how many quarters at this point. It's usually maybe a couple of years at this point. So rideshare is going great for us. It's been a steady contributor to our kilowatt hours in aggregate. That remains the case. We're thrilled. We've been saying forever that rideshare is a significant source of upside. That's beyond that battery electric vehicle to DCFC charging ratio, which is also a macro supply-demand factor that benefits the business.

So yes, we're thrilled. I mean, I think that a lot of companies, smaller private companies in this space, anecdotally, we wonder whether they'll be able to attract capital, quite honestly, just because they're smaller scale.

And can you just touch on, lastly, ASP per watt. It looked like it was up pretty smartly quarter-over-quarter, and that's after a 1Q increase from 4Q last year. I just wanted to kind of -- if you could touch on pricing power? Or is this dynamic pricing that you're kind of able to flex? Or is this people that are on a monthly plan, but because of the firmware issue, the charger that they go to was down, so you had a onetime benefit there?

So yes, we have seen our revenue per kilowatt hour pricing increase. As we've talked about on other calls as well, we're continuously testing our pricing programs, dynamic pricing. We're just talking about rideshare and trying to incentivize rideshare drivers to go off-peak and trying to influence the shape of our utilization curve as well. And it's all resulted in us having the ability watching customers' reaction to seeing how much we can move prices up.

We also, though -- when we look to price, we also look at what is the revenue minus our throughput costs, which are mostly our energy costs. And so as energy costs increase or decrease, we want to make sure that we maintain a spread or widen that spread to some degree. And I think that's really the most important point in the quarter where we saw that spread increase last year from, I think, $0.29 a kilowatt hour to $0.32 a kilowatt hour, which is right in the middle of our long-term guidance. So we're kind of approaching the spread where we think long-term it could end up. But we'll continue to test these programs with customers, making sure that we're delivering value to our customers, retain them, looking at the long-term value of customers as well, not just the short-term pricing opportunities and to make sure that we're maximizing the value and increasing retention as well.

I will now turn the call back to Badar Khan, CEO, for closing remarks.

Well, thank you, everyone.

Ladies and gentlemen, that concludes today's call. You may now disconnect. Thank you, and have a great day.