EVgo Inc. — FY2022 Form 10-K Summary
Reporting period: Fiscal year ended December 31, 2022; filed March 30, 2023. This is an annual report, not a standalone Q4 report. Comparisons are with FY2021.
Business context
EVgo owns and operates a U.S. public EV fast-charging network and provides fleet charging, charging-site development and operations through its eXtend offering, software and data services, and regulatory-credit sales. At year-end, its network had 2,184 DC charging stalls at more than 900 locations; throughput was 44.6 GWh. The company also operates PlugShare.
Financial results and liquidity
| Metric | FY2022 | FY2021 |
|---|---|---|
| Total revenue | $54.6 million | $22.2 million |
| Gross loss / gross margin | $5.7 million / (10.4%) | $6.8 million / (30.7%) |
| Operating loss / operating margin | $149.5 million / (273.9%) | $89.8 million / (404.4%) |
| Net loss | $106.2 million | $57.8 million |
| Adjusted EBITDA (non-GAAP) | $(80.2) million | $(51.4) million |
| Cash used in operating activities | $58.8 million | $29.6 million |
| Cash used in investing activities | $199.7 million | $87.8 million |
- Revenue grew 146%. eXtend revenue rose to $18.4 million from $0.8 million, primarily following the Pilot agreement; retail charging revenue increased 71% to $18.9 million. Throughput rose 69% to 44.6 GWh, and DC stalls increased from 1,676 to 2,184.
- Regulatory-credit sales increased 87% to $5.7 million. The company cautions that credit prices and program availability can fluctuate.
- Gross margin improved, reflecting stronger equipment-revenue margins and better fixed-cost leverage. However, operating loss widened as general and administrative expense rose 78% to $126.7 million, including higher payroll and share-based compensation.
- Cash, cash equivalents and restricted cash were approximately $246.5 million at year-end, down from $485.2 million. Working capital was $188.1 million, versus a $459.5 million deficit in 2021. Management said available cash was expected to cover current working-capital and capital-expenditure needs for at least 12 months from the filing date.
- The balance sheet lists no conventional borrowings at year-end. It includes $50.6 million of operating lease liabilities and $26.2 million of capital-build liabilities. Cash requirements also include $114.7 million of short-term charging-equipment purchase commitments.
- FY2022 financing cash flow was $19.8 million, including net ATM proceeds and capital-build funding. In Q4, the company sold 1.59 million shares under its ATM program for $10.7 million gross proceeds, approximately $10.4 million net.
Changes, outlook and material matters
- Growth versus losses: Revenue, throughput and network scale expanded substantially, but net loss and operating cash use increased as the company invested in network build-out and staffing.
- Commercial commitments: Under its GM agreement, EVgo must install 3,250 stalls by March 31, 2026, with 44% due by December 31, 2023, and maintain at least 95% network availability. Failure can lead to termination and liquidated damages of up to $15 million. The Pilot agreement covers up to 2,000 stalls at Pilot-owned sites and also includes construction milestones and potential liquidated damages.
- Capital and execution risks: EVgo depends on third-party equipment suppliers and contractors, faces utility interconnection and permitting delays, and reported that four vendors supplied 88.8% of charging equipment in 2022. Inflation and utility costs may pressure margins.
- Outlook: The filing provides no quantified revenue, earnings or cash-flow guidance. Management expects continued operating losses and significant expenses in the near and medium term; results depend on EV adoption, utilization, contract execution, incentives and access to funding.
- Controls and audit: The auditor gave an unqualified opinion on the financial statements. Management nevertheless concluded disclosure controls and internal control over financial reporting were ineffective at year-end due to material weaknesses involving staffing, risk assessment, information and communication, process controls and IT controls. Management reported no resulting material misstatement and described remediation measures; remediation may extend beyond 2023.
- Other notable items: The Delaware Court of Chancery validated specified corporate acts and securities in February 2023, resolving the identified uncertainty about the company’s capital structure. EVgo reported no material legal proceedings. Its Tax Receivable Agreement generally requires payment of 85% of certain realized or deemed tax savings to EVgo Holdings; no payment liability was triggered in 2022, but future payments could be significant.
Important facts for investors to verify
- Updated liquidity, cash burn, capital expenditure needs and financing plans, especially against the equipment commitments and network expansion program.
- Progress against GM and Pilot construction milestones, charger availability requirements, and any penalties, waivers or contract amendments.
- Whether utilization and charging revenue growth can improve gross margins while energy, maintenance and site costs rise.
- Customer and supplier concentration, and the sustainability and pricing of regulatory-credit revenue.
- Remediation of the disclosed material weaknesses and any subsequent changes in financial reporting controls.
- The potential timing and amount of Tax Receivable Agreement payments and the effect of share issuance, warrants and noncontrolling interests on dilution and liquidity.