EVgo Inc. — FY 2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021. This is an annual filing, not a stand-alone fourth-quarter report. The company’s 2020 comparison combines predecessor and successor periods around the January 2020 acquisition; accounting and ownership changes mean comparisons are not fully like-for-like. EVgo completed its SPAC business combination on July 1, 2021 and acquired Recargo on July 9, 2021.
Business context and financial highlights
EVgo owns and operates a U.S. public DC fast-charging network and sells charging, network, ancillary and regulatory-credit services. At year-end, its network had 1,676 DC stalls, versus 1,422 a year earlier; annual throughput rose to 26.4 GWh from 15.7 GWh. Management cited EV adoption and network expansion as growth drivers.
| Metric | FY 2021 | FY 2020 comparison |
|---|---|---|
| Total revenue | $22.2 million | $14.6 million; up 52% |
| Gross loss / gross margin | $6.8 million / (30.7%) | $9.0 million / (62.1%) |
| Operating loss / operating margin | $89.8 million / (404.4%) | $59.2 million / (406.2%) |
| Net loss | $57.8 million | $48.2 million |
| Adjusted EBITDA (non-GAAP) | $(51.4) million | $(24.0) million |
| Cash used in operations | $29.6 million | $20.4 million |
| Cash used in investing | $87.8 million | $19.5 million |
| Cash provided by financing | $594.6 million | $47.1 million |
Revenue growth reflected retail charging revenue of $11.0 million, up 88%; commercial charging revenue of $2.4 million, up 46%; network OEM revenue of $1.5 million, up 169%; and ancillary revenue of $3.4 million, up 84%, including Recargo. OEM charging revenue declined 42% to $0.8 million, primarily after the prior Nissan program ended. Regulatory-credit sales declined 7% to $3.0 million, mainly due to lower average credit prices. Charging revenue in Q4 2021 was 53% above Q4 2019, the last pre-COVID quarter; the filing does not provide a clear total-revenue figure for Q4.
Gross loss improved as revenue growth and operating leverage outpaced certain costs. However, G&A increased 101% to $71.1 million, reflecting higher payroll and share-based compensation, professional and legal fees, site-development costs, insurance and public-company expenses. Net loss included a $33.3 million noncash gain from changes in warrant and earnout fair values; reported loss therefore should be considered alongside the operating loss and cash flow.
Liquidity, debt and capital
At December 31, 2021, cash and restricted cash was $484.9 million on the balance sheet (the filing also cites approximately $485.2 million as cash balance), and working capital was $459.5 million, compared with a $43.6 million working-capital deficit at year-end 2020. Management said available cash was expected to cover current working-capital and capital-expenditure needs for at least 12 months from the filing date. Financing cash flow included $601.6 million of proceeds from the SPAC transaction before transaction costs and redemptions; the company also received $400 million from the PIPE as part of that transaction. Investing cash outflow included $65.0 million for property, equipment and software and $22.8 million, net, for Recargo.
The $59.6 million related-party note, including accrued interest, was converted to equity at the business-combination closing; no related-party note payable remained at year-end. The filing does not identify outstanding conventional borrowings at year-end. Other significant liabilities included $48.5 million of warrant liabilities, $23.2 million of capital-build liabilities and $12.8 million of asset-retirement obligations. EVgo had $28.7 million in charging-equipment purchase commitments and $16.0 million of future fixed minimum Site Host payments.
Material changes, outlook and risks
- Network and expansion: EVgo is prioritizing fast and ultra-fast charging, fleet solutions, software and partner-funded or white-label deployments. Under its amended GM agreement, it must install 3,250 fast-charging stalls by December 31, 2025, with 72% due by December 31, 2023, and maintain at least 93% network availability. As of March 15, 2022, about 2,500 stalls had GM approval, about 2,000 were in the development pipeline, and 85 stalls remained to meet the March 2022 quarterly milestone. Failure can lead to termination and liquidated damages of up to $15 million.
- Nissan commitments: The Nissan 2.0 agreement requires 210 chargers by February 29, 2024; 58 were due by August 31, 2022 under the then-current schedule. Delayed sites may incur penalties of up to $35,000 per site, subject to stated limits and cure periods. Nissan may terminate if it cannot secure required funding.
- Execution and market risks: Management identified permitting, utility interconnection, construction, supply-chain and equipment constraints as potential causes of deployment delays. The business also depends on EV adoption, fleet electrification, electricity availability and pricing, a concentrated set of customers and vendors, and government incentives and regulatory-credit markets. Two vendors supplied 37.3% of charging equipment and services in 2021; one customer accounted for 10.5% of revenue.
- Controls and accounting: Disclosure controls were not effective at December 31, 2021 because of material weaknesses in financial reporting controls, including segregation of duties, reconciliations and supporting documentation, technical-accounting review, and asset-retirement-obligation estimates. The journal-entry review weakness was remediated; other remediation remained in progress and could extend beyond 2022. KPMG issued an unqualified opinion on the financial statements, but management did not complete an internal-control effectiveness assessment.
- Other notable items: The Tax Receivable Agreement generally entitles EVgo Holdings to 85% of certain realized tax savings; no payment liability was recorded in 2021, but future amounts may be substantial and may accelerate in specified events. A predecessor-shareholder contingent-compensation dispute was settled in January 2022 for $1.5 million; EVgo Holdings agreed to indemnify EVgo Holdco for qualifying losses up to $7 million. The company reported no other material pending legal proceedings. The filing gives no formal numerical revenue, earnings or cash-flow guidance.
- Policy and COVID-19: The 2021 Infrastructure Investment and Jobs Act included up to $7.5 billion for charging infrastructure, but EVgo cautioned that availability and eligibility for incentives are uncertain. Federal Section 30C charging-station tax credits expired after December 31, 2021 unless extended retroactively. COVID-19 had caused construction and supply delays; the company said the future financial effect could not be reasonably estimated.
Important facts for investors to verify
- Confirm the revenue, gross-margin and adjusted EBITDA trends against the audited statements, including the non-GAAP reconciliations and the noncash warrant/earnout gains.
- Track charger installations, GM quarterly milestones and the 93% availability requirement, plus Nissan’s build schedule and any penalties or agreement changes.
- Review liquidity against ongoing operating cash burn, planned capital expenditures, purchase commitments and potential future Tax Receivable Agreement payments.
- Monitor utilization and throughput growth, regulatory-credit prices and contribution, and dependence on major customers, OEM partners and equipment suppliers.
- Check progress on remediation of the remaining material weaknesses and the effect of adopting lease-accounting requirements on reported assets and liabilities.