Evgo Inc. ((EVGO)) has held its Q4 earnings call. Read on for the main highlights of the call.
The latest earnings call from EVgo Inc. paints a promising picture of the company’s growth trajectory, marked by significant revenue increases, expansion in operational stalls, and a growing customer base. The successful securing of a Department of Energy (DOE) loan and notable efficiency improvements further enhance the positive outlook. However, the company faces competitive challenges, potential policy impacts, and a reliance on incentives, which present noteworthy risks.
Record Growth in Charging Network
EVgo reported a remarkable 60% year-over-year growth in full-year revenue, with Q4 revenue marking the ninth consecutive quarter of double-digit growth. Utilization rates also improved, reaching 24%, up from 19% the previous year, showcasing the increasing demand for EVgo’s services.
Expansion of Operational Stalls
The company added a record 480 new operational stalls in Q4, bringing the total to over 1,200 new stalls for the year and surpassing 4,000 operational stalls. This expansion underscores EVgo’s commitment to enhancing its infrastructure to meet rising customer demand.
DOE Loan Guarantee Secured
EVgo closed a $1.25 billion loan guarantee with the Department of Energy, with the first $75 million advance expected in January 2025. This financial backing is crucial for supporting the company’s ambitious growth plans.
Strong Customer Growth
Customer accounts grew by over 50% year-over-year, reaching more than 1.3 million. This surge in customer base highlights the increasing adoption of electric vehicles and the trust placed in EVgo’s network.
Significant Efficiency Improvements
The company achieved a 9% reduction in gross capital expenditures per stall for current generation chargers and is targeting a 30% reduction with new generation architecture. These efficiency gains are vital for maintaining competitive pricing and profitability.
Positive Adjusted EBITDA Trajectory
EVgo improved its adjusted EBITDA to a loss of $32.5 million for 2024, a $26.4 million improvement over 2023. The company is targeting EBITDA breakeven in 2025, reflecting its focus on financial health and sustainability.
Challenges in EV Charging Competition
Concerns were raised about the US lagging behind China in EV infrastructure and competitiveness due to lower state sponsorship and fewer incentives. This competitive landscape poses a challenge for EVgo as it seeks to expand its market share.
Potential Impact of Executive Orders
There is uncertainty regarding the impact of potential executive orders on electrification and the DOE loan. These policy changes could affect EVgo’s strategic planning and operations.
LCFS Pricing Volatility
EVgo acknowledged the risk of LCFS pricing volatility affecting revenue projections. This factor adds an element of unpredictability to the company’s financial outlook.
Dependence on Incentives
Federal incentives, such as the 30C tax credits, represent about 10% of gross capital expenditures per stall. While these incentives reduce reliance, they remain a significant factor in EVgo’s financial strategy.
Forward-Looking Guidance
During the earnings call, EVgo provided detailed guidance for 2025, expecting total revenues between $340 million and $380 million, with two-thirds deriving from charging network revenue. The company aims for adjusted EBITDA breakeven, ranging from a $5 million loss to a $10 million gain. EVgo plans to add 800 to 900 public and dedicated stalls in 2025, as part of a broader strategy to triple its installed base over the next five years. Supported by the DOE loan guarantee, EVgo remains confident in its ability to maintain growth momentum.
In summary, EVgo’s earnings call reflects a robust growth trajectory with significant achievements in revenue, stall deployment, and customer base expansion. While the company faces competitive and policy-related challenges, its strategic initiatives and financial backing position it well for future growth. Investors and stakeholders can remain optimistic about EVgo’s potential in the evolving EV landscape.