EVGO Q3 2026 EARNINGS CALL - EVGO INC

Financial Performance:

• Q3 2026 total revenue was $91 million, a 1% decrease year-over-year (YoY) due to declines in non-core Xtend and AV ancillary segments; core charging revenue grew 29% to $72 million.
• Q3 2026 charging gross profit was $28 million with a gross margin of 39% (up from 37% in Q3 2025); adjusted gross profit rose 21% to $32 million with an adjusted gross margin of 35%.
• Adjusted G&A was $36 million (39% of revenue), while adjusted G&A as a percentage of core charging revenue improved to 50% from 57% YoY.
• Q3 2026 resulted in an adjusted EBITDA loss of $3.5 million, an improvement from the $5 million loss in Q3 2025; trailing 12-month adjusted EBITDA margin reached positive 1% vs. -6% prior year.
• Network size expanded to 5,530 operational stalls (up 20% YoY); 160 new stalls were added in Q3, including 100 public EVgo-owned stalls.
• Total energy dispensed over the trailing 12 months was 392 GWh (up 12% YoY); Q3 public network throughput was 103 GWh (up 8% YoY).
• Daily throughput per stall was 283 kWh (down 4% YoY), but excluding OEM charging credits (which declined 69% YoY), underlying throughput grew 7% to 270 kWh.
• Balance sheet liquidity stood at approximately $787 million (cash + available debt capacity), with $620 million available across DOE and commercial facilities.
• Full-year 2026 revenue guidance lowered to $375–$400 million; adjusted G&A expected at ~$145 million; adjusted EBITDA loss expected between -$30 million and -$15 million.

Guidance and Future Outlook:

• 2026 stall deployment guidance reduced to 1,075–1,275 new stalls (including 600–750 public/AV and 475–525 Xtend) to reflect shifting build timelines to 2027.
• 2026 CapEx expected to be approximately $100 million lower than previous targets, with 550–650 new public sites planned for the year.
• NAC stall rollout targets: currently 290 stalls (up from 100 last year), expected to reach ~400 by year-end 2026, with a goal for 2/3 of the network to have NACS by end of 2028.
• Management expects NAC stalls to eventually deliver up to 400 kWh/day per stall at parity utilization with CCS, driven by higher charge rates (35% higher than CCS in Q3).
• Adjacent G&A costs for 2027 are expected to be 15% below prior 2027 guidance (~$150M vs previous ~$178M view) due to efficiency measures.
• Full-year 2026 non-charging guidance: Xtend $90–$95 million; AV ancillary $30–$45 million.
• Long-term goal: Achieve sustainable profitability by dialing growth up/down based on financial return and utilizing high-throughput sites.

Business Segments and Product Lines:

• Core Charging: 19th consecutive quarter of double-digit YoY revenue growth; transitioning network from 50kW legacy to 70% 350kW+ stalls.
• NACS & Tesla Integration: Rolling out NACS connectors to 9% of throughput; first EVgo-branded Supercharger site open in Chicago, second expected Houston Q4; 20 stalls currently live with hundreds planned.
• Next-Gen Architecture: Unveiled design for 750kW charging system with dynamic power sharing and touchless payment; deployment expected to begin in 2027.
• Xtend (Construction): Revenue declining; expected to trend lower to $5–$10 million annually by 2028.
• AV Ancillary: Episodic revenue driven by long-duration project timing; one large 50-stall site targeting late Q4 2026 operationalization.
• Site Hosts: Expanded partnerships with Brixmor (500+ new chargers) and Regency Centers (400+ new chargers) adding >900 stalls across major grocery retailers.

Market and Competitive Landscape:

• Market shift toward NACS standards: NACS vehicles now ~60% of total EV market, expected to reach >80% by 2030, effectively doubling EVgo's addressable market.
• Competitive advantage in next-gen equipment: EVgo designs own hardware (rare in industry), improving reliability and customer experience.
• Used EV drivers identified as high-value segment: Tend to rely more on public fast charging and charge at higher rates than new EV owners; used EV sales rising consistently.
• New EV sales bottomed in Spring 2026; anticipated strong YoY growth in Q4 due to prior incentive roll-offs.
• Industry transition from CCS to NACS creating short-term friction but long-term market standardization benefits.

Risks and Challenges:

• OEM Credit Roll-off: Decline in OEM charging credits (down 69% YoY) and slower customer conversion from credit-eligible to retail customers impacted Q3 throughput.
• EV Adoption Slower than Expected: US EV sales growth has been muted compared to prior forecasts, impacting near-term throughput per stall.
• Legacy Equipment: 50kW stalls becoming less competitive; 70% of the network was 50kW in 2022, though this is rapidly transitioning to 350kW+.
• NAC Ramp-up Pressure: Near-term throughput per stall may face pressure as new NACS connectors ramp up before reaching full utilization.
• Incentive Elimination: Removal of federal EV purchase and infrastructure incentives in the prior year impacted initial demand.

Management Commentary and Tone:

• Management acknowledged the unsolicited $2/share take-private offer from majority shareholder LS Power but declined to comment further pending Special Committee review.
• Tone was confident and strategic despite near-term headwinds, emphasizing control over capital deployment and path to profitability.
• CEO Badr Khan highlighted the "next turning point" for the company as NAC utilization accelerates and legacy CCS credits disappear.
• CFO Kiefer Lehner emphasized that the business model is adaptable, noting the company is already adjusted EBITDA positive without growth expenses.
• Management stressed that the 2026-2027 vintage cohorts are expected to be the "best performing" despite being smaller in number.

Analyst Questions and Answers:

• Christian Rinos (RBC): Asked about drivers of lower Q3 throughput per stall; Management clarified that excluding OEM credits, underlying growth is 7% YoY. Discussed that NACS utilization is ramping (currently 9%) but charge rates are 35% higher than CCS, suggesting significant upside.
• Christian Pierce (Needham): Inquired about used vs. new EV sales dynamics; Management noted used EV sales are rising steadily and are a major tailwind as used EV owners rely more on public charging.
• Q&A on Superchargers: Analyst asked about early Tesla Supercharger performance; Management reported the Chicago site is "off to a flying start" after one week.
• Q&A on NACS Utilization: Clarification provided that NACS drivers are utilizing both NACS stalls and CCS stalls with adapters, providing data to optimize future NACS deployment locations.

Other Key Points:

• EVgo customer base exceeds 1.9 million accounts.
• First EVgo Supercharger sites are now visible natively in Tesla navigation and trip planner.
• Management expects the transition to NACS to create long-term growth opportunities despite short-term deployment delays.
• The company is leveraging AI-driven insights for marketing campaigns to increase throughput.
• A special committee of independent directors is reviewing the LS Power take-private proposal.