EVgo Inc. — Q1 2023 Form 10-Q
Reporting period: Three months ended March 31, 2023; filed May 9, 2023. EVgo owns and operates a U.S. public DC fast-charging network and also provides charging infrastructure, network and related services. Results are unaudited.
Financial and operating performance
| Metric | Q1 2023 | Q1 2022 |
|---|---|---|
| Revenue | $25.3 million | $7.7 million |
| Gross profit (loss); margin | $0.04 million; 0.2% | $(0.6) million; (7.8)% |
| Operating loss | $(42.6) million | $(29.9) million |
| Net loss | $(49.1) million | $(55.3) million |
| Net loss attributable to Class A holders; loss per share | $(13.1) million; $(0.18) | $(14.4) million; $(0.21) |
| Adjusted EBITDA (non-GAAP) | $(20.1) million | $(18.2) million |
| Cash used in operations | $(19.3) million | $(19.8) million |
| Capital expenditure purchases | $(65.2) million | $(28.3) million |
Revenue increased 229%, led by eXtend revenue of $10.3 million (versus $0.1 million), primarily from the Pilot agreement. Retail charging revenue rose 89% to $6.6 million; network revenue from OEMs increased to $2.7 million. Throughput more than doubled to 17.9 GWh from 8.0 GWh, while operational DC stalls grew to 2,352 from 1,772.
Despite near break-even GAAP gross profit, adjusted gross margin, a non-GAAP measure, declined to 25.3% from 37.2%. General and administrative expense increased 49% to $37.9 million, including higher payroll and share-based compensation, impairment expense and professional services. Operating loss widened, while net loss narrowed mainly because the noncash fair-value loss on warrants and earnout liabilities was lower than in Q1 2022.
Liquidity, capital and balance sheet
Cash, cash equivalents and restricted cash totaled approximately $163.8 million at March 31, 2023, down from $246.5 million at year-end; working capital was $114.6 million, versus $188.1 million. Net cash decreased $82.7 million during the quarter. EVgo reported $367.2 million of net property, equipment and software, reflecting substantial network investment.
The filing reports no borrowings or conventional debt balance in the presented balance sheet. It reports operating lease liabilities of $53.8 million, $66.0 million in short-term equipment purchase commitments, and $49.2 million of estimated lease commitments for sites not yet possessed. EVgo says cash on hand is sufficient for working capital and capital expenditure needs for at least twelve months from the filing date. It also reported $5.7 million net proceeds from ATM share sales in April 2023.
Outlook, risks and unusual items
- No numeric revenue, earnings or cash-flow guidance is provided. Management expects general and administrative expenses to rise in absolute dollars as the business grows.
- EVgo’s growth and financial performance depend on EV adoption, network utilization, execution of site construction and customer programs, and access to charging equipment. Inflation, supply-chain and utility/permitting delays, competition, and changing government incentives and domestic-content requirements could constrain expansion or raise costs.
- Contract execution creates potential exposure: the GM program requires 3,250 stalls by March 31, 2026, including 44% by December 31, 2023, and 95% network availability; specified defaults could lead to termination and liquidated damages up to $15 million. The Pilot program covers up to 2,000 stalls and includes construction milestones and potential site-level liquidated damages. Nissan’s build schedule also carries potential penalties, subject to amendments and waivers described in the filing.
- The company had $66.0 million of equipment purchase commitments, including take-or-pay obligations under its Delta charger order, subject to stated limits. EVgo also warns that future Tax Receivable Agreement payments could be substantial; no liability was recorded at quarter-end because no triggering tax savings transaction had occurred.
- Management disclosed continuing material weaknesses in internal control over financial reporting; disclosure controls were deemed ineffective at March 31, 2023. Remediation may extend beyond 2023. Management nevertheless states the presented financial statements fairly reflect the company’s position and results.
- The Delaware Court of Chancery validated the corporate acts and charter challenged in EVgo’s February 2023 Section 205 petition. EVgo said it was not party to any material legal proceedings at the filing date. The filing identifies no material changes to the risk factors in its 2022 Form 10-K.
Key facts investors should verify
- Whether growth in throughput and eXtend revenue translates into improving gross margins and lower operating cash burn; eXtend was a major source of Q1 revenue growth.
- Progress against GM, Pilot and Nissan construction, uptime and equipment-delivery obligations, including any milestone changes, delays, termination rights or penalties.
- Cash runway relative to the quarter’s $65.2 million investing outflow, $66.0 million purchase commitments and the stated twelve-month liquidity assessment.
- Remediation of material weaknesses and the timing of effective financial-reporting controls.
- Potential dilution from the ATM program, equity awards and redeemable OpCo units; EVgo owned 26.8% of EVgo OpCo at quarter-end, with the balance held by the noncontrolling interest.