What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-08-01 compared with 2024-05-07 · 172 added, 72 removed, 422 unchanged (37% of the section changed)

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The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of EVgo’s consolidated results of operations and financial condition.

The discussion should be read in conjunction with EVgo’s unaudited condensed consolidated financial statements and the related notes thereto as of March 31, 2024 and December 31, 2023 and for the three months ended March 31, 2024 and 2023 included elsewhere in this Quarterly Report, and the audited consolidated financial statements and related notes thereto as of and for the years ended December 31, 2023 and 2022 contained in the Annual Report.

The discussion should be read in conjunction with EVgo’s unaudited condensed consolidated financial statements and the related notes thereto as of June 30, 2024 and December 31, 2023 and for the three and six months ended June 30, 2024 and 2023 included elsewhere in this Quarterly Report, and the audited consolidated financial statements and related notes thereto as of and for the years ended December 31, 2023 and 2022 contained in the Company’s Annual Report on Form 10-K.

In addition to historical information, this discussion contains forward-looking statements that involve numerous risks, uncertainties, and assumptions that could cause EVgo’s actual results to differ materially from management’s expectations due to a number of factors, including those discussed in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” in this Quarterly Report.

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EVgo is one of the nation’s largest public fast charging networks, featuring over 1,000 fast charging locations across more than 35 states, including stations built through EVgo eXtend, its white label service offering.

EVgo is accelerating transportation electrification through partnerships with automakers, fleet and rideshare operators, retail hosts such as grocery stores, shopping centers, and gas stations, policy leaders, and other organizations.

EVgo is expected to accelerate transportation electrification through partnerships with automakers, fleet and rideshare operators, retail hosts such as grocery stores, shopping centers, and gas stations, policy leaders, and other organizations.

The foundation of the Company’s business is building, owning and operating EV fast charging sites that deliver charging to EVs driven by individuals, commercial drivers, and fleet operators.

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Additionally, recent inflationary pressures have resulted in and may continue to result in increases to the costs of charging equipment and personnel, which could in turn cause capital expenditures and operating costs to rise.

Sustained levels of high inflation have likewise caused the U.S.

Federal Reserve and other central banks to increase interest rates, which could have the effects of raising the cost of capital and depressing economic growth.

Notwithstanding the current easing of inflation and general improvement in the macroeconomic environment, EVgo remains vigilant of factors that may have the effects of raising the cost of capital and depressing economic growth.

The current economic environment remains uncertain, and the extent to which EVgo’s operating and financial results for future periods will be impacted by the conflicts in Ukraine, Israel and the broader Middle East region, rates of inflation, instability in the financial services sector, supply-chain disruptions, government efforts to reduce inflation and any recession will largely depend on future developments, which are highly uncertain and cannot be reasonably estimated at this time.

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Network throughput (GWh) on the EVgo Network for the three months ended

Network throughput (GWh) on the EVgo Network for the six months ended

Number of DC Stalls on the EVgo Network (in thousands) as of

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In addition to California, EVgo is monitoring proposed new Clean Fuels programs in Illinois, Massachusetts, Michigan, Minnesota, New Jersey and New York.

Results of Operations for the Three Months Ended March 31, 2024 and 2023

EVgo believes that EV charging is subject to seasonality related to driving, travel and economic activity that impacts demand for charging.

For example, Americans typically drive more miles in the summer months and fewer in the winter months, especially in January and February.

EVgo’s rideshare drivers also typically experience lower activity levels in the first quarter.

The exact impacts that these underlying trends have on charging demand has been difficult to discern given the growth in throughput and utilization that EVgo has experienced over the past several years.

Lastly, many utilities tend to charge higher rates in the summer (typically defined as a four month period starting in June), than the rest of the year.

Results of Operations for the Three Months Ended June 30, 2024 and 2023

The table below presents EVgo’s results of operations:

Three Months Ended March 31,

Three Months Ended June 30,

(dollars in thousands)

15 unchanged sentences

Interest income

Other (expense) income, net

Other expense, net

Change in fair value of earnout liability

Change in fair value of warrant liabilities

Total other income (expense), net

Total other income, net

Loss before income tax expense

3 unchanged sentences

Operating margin

Network throughput (GWh)

Number of DC Stalls on the EVgo Network (in thousands) as of

1 In the fourth quarter of 2023, the Company changed the presentation of cost of sales to disaggregate such costs between “charging network” and “other.” Previously reported amounts have been updated to conform to the current presentation.

Total revenue for the three months ended June 30, 2024 increased $16.1 million, or 32%, to $66.6 million compared to $50.6 million for the three months ended June 30, 2023.

As further discussed below, the increase in revenue was primarily due to a $13.3 million increase in retail charging revenue, a $4.7 million increase in commercial charging revenue, a $2.7 million increase in OEM charging revenue, and a $0.9 million increase in network revenue, partially offset by a $5.6 million decrease in eXtend revenue.

Charging Revenue, Retail.

Charging revenue, retail, for the three months ended June 30, 2024 increased $13.3 million, or 146%, to $22.3 million compared to $9.1 million for the three months ended June 30, 2023.

Period-over-period growth was primarily due to an overall increase in throughput driven primarily by increased charging volume from a greater number of customers and more throughput per customer.

Charging Revenue, Commercial.

Charging revenue, commercial, for the three months ended June 30, 2024 increased $4.7 million, or 193%, to $7.1 million compared to $2.4 million for the three months ended June 30, 2023.

Period-over-period growth was primarily due to higher charging volumes by the Company’s public fleet customers.

Charging Revenue, OEM.

Charging revenue, OEM, for the three months ended June 30, 2024 increased $2.7 million, or 269%, to $3.6 million compared to $1.0 million for the three months ended June 30, 2023.

Period-over-period growth was primarily due to an increase in active OEM customers and increased throughput per customer.

Regulatory Credit Sales.

Regulatory credit sales for the three months ended June 30, 2024 increased $0.1 million, or 8%, to $1.7 million compared to $1.6 million for the three months ended June 30, 2023 due to the impact of increased throughput, partially offset by decreased market prices.

Network Revenue, OEM.

Network revenue, OEM, for the three months ended June 30, 2024 increased $0.9 million, or 119%, to $1.6 million compared to $0.7 million for the three months ended June 30, 2023.

The period-over-period increase was due to increased membership fees and marketing activities from OEM customers.

eXtend Revenue.

eXtend revenue for the three months ended June 30, 2024 decreased $5.6 million, or 17%, to $27.7 million compared to $33.3 million for the three months ended June 30, 2023.

The decrease was primarily due to a decrease in equipment sales, partially offset by increased construction projects in process or completed, compared to the same prior year period.

Ancillary Revenue.

Ancillary revenue for the three months ended June 30, 2024 increased $0.1 million, or 3%, to $2.5 million compared to $2.4 million for the three months ended June 30, 2023.

The increase was primarily due to increased revenue from engineering and construction and licensing, partially offset by decreased revenue from equipment sales and research and consulting.

Cost of Sales

Charging Network.

Charging network cost of sales for the three months ended June 30, 2024 increased $12.0 million, or 100%, to $24.0 million compared to $12.0 million for the three months ended June 30, 2023.

The increase in charging network cost was primarily due to a $8.3 million increase in usage-related energy costs resulting from increased throughput and a $3.7 million increase in fixed charging costs.

Other cost of sales for the three months ended June 30, 2024 decreased $0.6 million, or 2%, to $25.1 million compared to $25.7 million for the three months ended June 30, 2023.

The decrease in other cost of sales was primarily due to a decrease of $1.0 million in costs to support eXtend revenue, partially offset by an increase in costs related to ancillary and research-related revenue.

Depreciation, Net of Capital-Build Amortization.

Depreciation, net of capital-build amortization, for the three months ended June 30, 2024 increased $3.9 million, or 53%, to $11.1 million compared to $7.3 million for the three months ended June 30, 2023 due to the growth of EVgo’s charging network.

Gross Profit and Gross Margin

Gross profit for the three months ended June 30, 2024 increased to $6.4 million compared to $5.5 million for the three months ended June 30, 2023 primarily due to increased gross profit from charging revenues, partially offset by decreased eXtend revenue and increased depreciation, net of capital-build amortization.

Gross margin for the three months ended June 30, 2024 was 9.6% compared to 10.9% for the three months ended June 30, 2023 primarily due to lower margins from eXtend revenues resulting in a mix shift from higher equipment sales in the three months ended June 30, 2023 to higher construction revenue in the three months ended June 30, 2024, partially offset by higher margins on charging revenue resulting from improved leveraging of charging station costs.

Operating Expenses

General and Administrative Expenses.

General and administrative expenses for the three months ended June 30, 2024 decreased $0.5 million, or 1%, to $33.8 million compared to $34.3 million for the three months ended June 30, 2023.

The decrease was primarily driven by a $1.5 million decrease in payroll expenses, partially offset by a $0.9 million increase in loss on disposals.

Depreciation, Amortization and Accretion.

Depreciation, amortization and accretion expenses for the three months ended June 30, 2024 increased $0.2 million, or 4%, to $5.0 million compared to $4.8 million for the three months ended June 30, 2023.

The increase was primarily due to increased amortization related to software, partially offset by decreased amortization of intangible assets.

Operating Loss and Operating Margin

During the three months ended June 30, 2024, EVgo had an operating loss of $32.4 million, a decrease of $1.2 million, or 4%, compared to $33.6 million for the three months ended June 30, 2023.

The decrease in operating loss was driven primarily by an increase in gross profit and decreased general and administrative expenses.

Operating margin for the three months ended June 30, 2024 was negative 48.6% compared to negative 66.4% for the three months ended June 30, 2023 primarily due to improved leveraging of operating expenses and improved gross margin.

Interest Income

Interest income for the three months ended June 30, 2024 decreased $0.1 million, or 6%, to $2.1 million compared to $2.2 million for the three months ended June 30, 2023.

The decrease was due to less cash and cash equivalents held in a high interest rate account by the Company during the three months ended June 30, 2024 compared to the same prior year period.

Other Expense, Net

Other expense, net, for the three months ended June 30, 2024 and 2023 was de minimis.

Changes in Fair Values of Warrant and Earnout Liabilities

For the three months ended June 30, 2024, there was a $0.8 million gain resulting from the change in fair values of warrant and earnout liabilities compared to a $9.9 million gain for the three months ended June 30, 2023.

The change between periods was primarily due to a lower decrease in the fair value of the warrant and earnout liabilities during the three months ended June 30, 2024 compared to the same prior year period.

See “ Part I, Item 1.

Financial Statements – Note 10 – Fair Value Measurements ” for more information.

For the three months ended June 30, 2024 and 2023, EVgo’s income taxes and effective tax rates were de minimis.

As of June 30, 2024 and 2023, EVgo maintained a full valuation allowance on EVgo’s net deferred tax assets.

Net loss for the three months ended June 30, 2024 was $29.6 million, compared to a net loss of $21.5 million for the three months ended June 30, 2023.

The change was primarily driven by a $9.1 million impact from changes in the fair values of the warrant and earnout liabilities, which was partially offset by increased gross profit of $0.9 million and a $0.5 million decrease in general and administrative expenses.

Results of Operations for the Six Months Ended June 30, 2024 and 2023

The table below presents EVgo’s results of operations:

Six Months Ended June 30,

(dollars in thousands)

Charging, retail

Charging, commercial

Charging, OEM

Regulatory credit sales

Total charging network

Total revenue

Cost of sales

Charging network 1

Depreciation, net of capital-build amortization

Total cost of sales

Operating expenses

General and administrative

Depreciation, amortization and accretion

Total operating expenses

Operating loss

Interest income

Other expense, net

Change in fair value of earnout liability

Change in fair value of warrant liabilities

Total other income, net

Loss before income tax expense

Income tax expense

net loss attributable to redeemable noncontrolling interest

Net loss attributable to Class A common stockholders

Operating margin

Network throughput (GWh) on the EVgo Network

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* Percent not meaningful.

Total revenue for the three months ended March 31, 2024 increased $29.9 million, or 118%, to $55.2 million compared to $25.3 million for the three months ended March 31, 2023.

As further discussed below, the increase in revenue was primarily due to an $11.7 million increase in retail charging revenue, an $8.9 million increase in eXtend revenue, a $4.1 million increase in commercial charging revenue, and a $2.2 million increase in OEM charging revenue.

Total revenue for the six months ended June 30, 2024 increased $45.9 million, or 61%, to $121.8 million compared to $75.9 million for the six months ended June 30, 2023.

As further discussed below, the increase in revenue was primarily due to a $25.0 million increase in retail charging revenue, an $8.8 million increase in commercial charging revenue, a $4.8 million increase in OEM charging revenue, and a $3.2 million increase in eXtend revenue.

Charging Revenue, Retail.

Charging revenue, retail, for the three months ended March 31, 2024 increased $11.7 million, or 177%, to $18.3 million compared to $6.6 million for the three months ended March 31, 2023.

Charging revenue, retail, for the six months ended June 30, 2024 increased $25.0 million, or 159%, to $40.7 million compared to $15.7 million for the six months ended June 30, 2023.

Period-over-period growth was primarily due to an overall increase in throughput driven primarily by increased charging volume from a greater number of customers and more throughput per customer.

Charging Revenue, Commercial.

Charging revenue, commercial, for the three months ended March 31, 2024 increased $4.1 million, or 240%, to $5.8 million compared to $1.7 million for the three months ended March 31, 2023.

Charging revenue, commercial, for the six months ended June 30, 2024 increased $8.8 million, or 213%, to $12.9 million compared to $4.1 million for the six months ended June 30, 2023.

Period-over-period growth was primarily due to higher charging volumes by the Company’s public fleet customers.

Charging Revenue, OEM.

Charging revenue, OEM, for the three months ended March 31, 2024 increased $2.2 million, or 395%, to $2.7 million compared to $0.6 million for the three months ended March 31, 2023.

Charging revenue, OEM, for the six months ended June 30, 2024 increased $4.8 million, or 314%, to $6.4 million compared to $1.5 million for the six months ended June 30, 2023.

Period-over-period growth was primarily due to an increase in active OEM customers and increased throughput per customer.

Regulatory Credit Sales.

Regulatory credit sales for the three months ended March 31, 2024 increased $0.8 million, or 67%, to $2.0 million compared to $1.2 million for the three months ended March 31, 2023 due to the impact of increased throughput.

Regulatory credit sales for the six months ended June 30, 2024 increased $1.0 million, or 34%, to $3.8 million compared to $2.8 million for the six months ended June 30, 2023 due to the impact of increased throughput, partially offset by decreased market prices.

Network Revenue, OEM.

Network revenue, OEM, for the three months ended March 31, 2024 increased $0.7 million, or 27%, to $3.4 million compared to $2.7 million for the three months ended March 31, 2023.

The period-over-period increase was due to increased marketing activities and membership fees from OEM customers.

Network revenue, OEM, for the six months ended June 30, 2024 increased $1.6 million, or 47%, to $5.1 million compared to $3.4 million for the six months ended June 30, 2023.

The period-over-period increase was primarily due to increased marketing activities and membership fees from OEM customers.

eXtend Revenue.

eXtend revenue for the three months ended March 31, 2024 increased $8.9 million, or 86%, to $19.2 million compared to $10.3 million for the three months ended March 31, 2023.

The increase was primarily due to an increase in equipment sales and increased projects in process or completed compared to the same prior year period.

eXtend revenue for the six months ended June 30, 2024 increased $3.2 million, or 7%, to $46.8 million compared to $43.6 million for the six months ended June 30, 2023.

The increase was primarily due to an increase in construction projects in process or completed, partially offset by decreased equipment sales, compared to the same prior year period.

Ancillary Revenue.

Ancillary revenue for the three months ended March 31, 2024 increased $1.4 million, or 65%, to $3.7 million compared to $2.2 million for the three months ended March 31, 2023.

The increase was primarily due to increased revenue from equipment sales, and engineering and construction revenue.

Ancillary revenue for the six months ended June 30, 2024 increased $1.5 million, or 33%, to $6.2 million compared to $4.6 million for the six months ended June 30, 2023.

The increase was primarily due to increased revenue from engineering and construction, equipment sales, and licensing, partially offset by decreased revenue from advertising.

Cost of Sales

Charging Network.

Charging network cost of sales for the three months ended March 31, 2024 increased $9.5 million, or 96% to $19.5 million compared to $10.0 million for the three months ended March 31, 2023.

Charging network cost of sales for the six months ended June 30, 2024 increased $21.5 million, or 98%, to $43.5 million compared to $22.0 million for the six months ended June 30, 2023.

The increase in charging network cost was primarily due to a $15.0 million increase in usage-related energy costs resulting from increased throughput and a $6.5 million increase in fixed charging costs.

Other cost of sales for the three months ended March 31, 2024 increased $9.5 million, or 106%, to $18.4 million compared to $8.9 million for the three months ended March 31, 2023.

Other cost of sales for the six months ended June 30, 2024 increased $8.9 million, or 26%, to $43.5 million compared to $34.7 million for the six months ended June 30, 2023.

The increase in other cost of sales was primarily due to an increase of $7.3 million in costs to support eXtend revenue and an increase of $1.2 million in costs to support ancillary revenue .

Depreciation, Net of Capital-Build Amortization.

Depreciation, net of capital-build amortization, for the three months ended March 31, 2024 increased $4.0 million, or 63%, to $10.4 million compared to $6.3 million for the three months ended March 31, 2023 due to the growth of EVgo’s charging network.

Depreciation, net of capital-build amortization, for the six months ended June 30, 2024 increased $7.9 million, or 58%, to $21.5 million compared to $13.6 million for the six months ended June 30, 2023 due to the growth of EVgo’s charging network.

Gross Profit and Gross Margin

Gross profit for the three months ended March 31, 2024 was $6.8 million compared to approximately break even for the three months ended March 31, 2023 primarily due to increased gross profit from charging revenues, partially offset by increased depreciation, net of capital-build amortization.

Gross margin for the three months ended March 31, 2024 was 12.4% compared to 0.2% for the three months ended March 31, 2023 primarily due to higher margins on charging revenue resulting from improved leveraging of charging station costs, partially offset by lower margins from eXtend and ancillary revenues.

Gross profit for the six months ended June 30, 2024 increased to $13.2 million compared to $5.6 million for the six months ended June 30, 2023 primarily due to increased gross profit from charging revenues, partially offset by increased depreciation, net of capital-build amortization.

Gross margin for the six months ended June 30, 2024 was 10.9% compared to 7.3% for the six months ended June 30, 2023 primarily due to higher margins on charging revenue resulting from improved leveraging of charging station costs, partially offset by lower margins from eXtend revenues resulting in a mix

shift from higher equipment sales in the six months ended June 30, 2023 to higher construction revenue in the six months ended June 30, 2024.

Operating Expenses

General and Administrative Expenses.

General and administrative expenses for the three months ended March 31, 2024 decreased $3.7 million, or 10%, to $34.2 million compared to $37.9 million for the three months ended March 31, 2023.

The decrease was primarily driven by a $1.3 million decrease in fees for professional services, a $1.1 million decrease in impairment expenses, and a $0.8 million decrease in payroll expenses.

General and administrative expenses for the six months ended June 30, 2024 decreased $4.2 million, or 6%, to $68.1 million compared to $72.2 million for the six months ended June 30, 2023.

The decrease was primarily driven by a $2.3 million decrease in payroll expenses, a $1.8 million decrease in impairment expense, and a $0.8 million decrease in legal and professional services, partially offset by a $1.4 million increase in loss on disposals of property and equipment, net of insurance recoveries.

Depreciation, Amortization and Accretion.

Depreciation, amortization and accretion expenses for the three months ended March 31, 2024 increased $0.2 million, or 4%, to $5.0 million compared to $4.8 million for the three months ended March 31, 2023.

The increase was primarily due to an increase in amortization related to software, partially offset by decreased amortization of intangible assets.

Depreciation, amortization and accretion expenses for the six months ended June 30, 2024 increased $0.4 million, or 4%, to $9.9 million compared to $9.6 million for the six months ended June 30, 2023.

The increase was primarily due to increased amortization related to software, partially offset by decreased amortization of intangible assets and decreased accretion expense.

Operating Loss and Operating Margin

During the three months ended March 31, 2024, EVgo had an operating loss of $32.4 million, an improvement of $10.3 million, or 24%, compared to $42.6 million for the three months ended March 31, 2023.

During the six months ended June 30, 2024, EVgo had an operating loss of $64.8 million, an improvement of $11.5 million, or 15%, compared to $76.2 million for the six months ended June 30, 2023.

The decrease in operating loss was driven primarily by an increase in gross profit and decreased general and administrative expenses.

Operating margin for the three months ended March 31, 2024 was negative 58.7% compared to negative 168.5% for the three months ended March 31, 2023 primarily due to improved leveraging of operating expenses and improved gross margin.

Operating margin for the six months ended June 30, 2024 was negative 53.2% compared to negative 100.5% for the six months ended June 30, 2023 primarily due to improved gross margin and improved leveraging of operating expenses.

Interest Income

Interest income for the three months ended March 31, 2024 increased $0.3 million, or 14%, to $2.3 million compared to $2.0 million for the three months ended March 31, 2023.

The increase was due to more cash and cash equivalents held in a high interest rate account by the Company during the three months ended March 31, 2024 compared to the same prior-year period.

Other (Expense) Income, Net

Other (expense) income, net, for the three months ended March 31, 2024 and 2023 was de minimis.

Interest income for the six months ended June 30, 2024 increased $0.1 million, or 3%, to $4.3 million compared to $4.2 million for the six months ended June 30, 2023.

The increase was primarily due to higher interest rates, partially offset by decreased cash held by the Company during the six months ended June 30, 2024 compared to the same prior-year period.

Other Expense, Net

Other expense, net, for the six months ended June 30, 2024 and 2023 was de minimis.

Changes in Fair Values of Warrant and Earnout Liabilities

For the three months ended March 31, 2024, there was a $1.9 million gain on change in fair values of warrant and earnout liabilities compared to an $8.4 million loss for the three months ended March 31, 2023.

The change between periods was primarily due to a decrease in the fair value of the warrant and earnout liabilities during the three months ended March 31, 2024 compared to an increase during the same prior-year period.

For the six months ended June 30, 2024, there was a $2.7 million gain resulting from the change in fair values of warrant and earnout liabilities compared to a $1.4 million gain for the six months ended June 30, 2023.

The change between periods was primarily due to a larger decrease in the fair value of the warrant liabilities during the six months ended June 30, 2024, compared to the same prior-year period.

See “ Part I, Item 1.

Financial Statements – Note 10 – Fair Value Measurements ” for more information.

For the three months ended March 31, 2024 and 2023, EVgo’s income taxes and effective tax rates were de minimis.

Net loss for the three months ended March 31, 2024 was $28.2 million, compared to a net loss of $49.1 million for the three months ended March 31, 2023.

The change was primarily driven by a $10.4 million impact from changes in the fair values of the warrant and earnout liabilities, increased gross profit of $6.8 million, and a $3.7 million decrease in general and administrative expenses.

For the six months ended June 30, 2024 and 2023, EVgo’s income taxes and effective tax rates were de minimis.

As of June 30, 2024 and 2023, EVgo maintained a full valuation allowance on EVgo’s net deferred tax assets.

Net loss for the six months ended June 30, 2024 was $57.8 million, compared to a net loss of $70.6 million for the six months ended June 30, 2023.

The change was primarily driven by increased gross profit of $7.7 million, a $4.2 million decrease in general and administrative expenses, and a $1.3 million impact from changes in the fair values of the warrant and earnout liabilities.

Non-GAAP Financial Measures

This Quarterly Report includes the following non-GAAP financial measures, in each case as defined below:

“Adjusted Cost of Sales,” “Adjusted Cost of Sales as a Percentage of Revenue,” “Adjusted Gross Profit (Loss),” “Adjusted Gross

Margin,” “Adjusted General and Administrative Expenses,” “Adjusted General and Administrative Expenses as a Percentage of Revenue,” “EBITDA,” “EBITDA Margin,” “Adjusted EBITDA,” “Adjusted EBITDA Margin,” and “Capital Expenditures, Net of Capital Offsets.” With respect to Capital Expenditures, Net of Capital Offsets, pursuant to the terms of certain OEM contracts, EVgo is paid well in advance of when revenue can be recognized, and usually, the payment is tied to the number of stalls that commence operations under the applicable contractual arrangement while the related revenue is deferred at the time of payment and is recognized as revenue over time as EVgo provides charging and other services to the OEM and the OEM’s customers.

“Charging Network Margin,” “Adjusted Cost of Sales,” “Adjusted Cost of Sales as a Percentage of Revenue,” “Adjusted Gross Profit (Loss),” “Adjusted Gross Margin,” “Adjusted General and Administrative Expenses,” “Adjusted General and Administrative Expenses as a Percentage of Revenue,” “EBITDA,” “EBITDA Margin,” “Adjusted EBITDA,” “Adjusted EBITDA Margin,” and “Capital Expenditures, Net of Capital Offsets.” With respect to Capital Expenditures, Net of Capital Offsets, pursuant to the terms of certain OEM contracts, EVgo is paid well in advance of when revenue can be recognized, and usually, the payment is tied to the number of stalls that commence operations under the applicable contractual arrangement while the related revenue is deferred at the time of payment and is recognized as revenue over time as EVgo provides charging and other services to the OEM and the OEM’s customers.

EVgo management therefore uses these measures internally to establish forecasts, budgets, and operational goals to manage and monitor its business, including the cash used for, and the return on, its investment in its charging infrastructure.

EVgo believes that these measures are useful to investors in evaluating EVgo’s performance and help to depict a meaningful representation of the performance of the underlying business, enabling EVgo to evaluate and plan more effectively for the future.

Adjusted Cost of Sales, Adjusted Cost of Sales as a Percentage of Revenue, Adjusted Gross Profit (Loss), Adjusted Gross Margin, Adjusted General and Administrative Expenses, Adjusted General and Administrative Expenses as a Percentage of Revenue, EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EBITDA Margin and Capital Expenditures, Net of Capital Offsets are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies.

Charging Network Margin, Adjusted Cost of Sales, Adjusted Cost of Sales as a Percentage of Revenue, Adjusted Gross Profit (Loss), Adjusted Gross Margin, Adjusted General and Administrative Expenses, Adjusted General and Administrative Expenses as a Percentage of Revenue, EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EBITDA Margin and Capital Expenditures, Net of Capital Offsets are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies.

These measures should not be considered as measures of financial performance under GAAP and the items excluded from or included in these metrics are significant components in understanding and assessing EVgo’s financial performance.

These metrics should not be considered as alternatives to net income (loss) or any other performance measures derived in accordance with GAAP.

EVgo defines Charging Network Margin as total charging network revenue less charging network cost of sales divided by total charging network revenue.

EVgo defines Adjusted Cost of Sales as cost of sales before:

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The tables below present quantitative reconciliations of these measures to their most directly comparable GAAP measures as described in this paragraph.

The following unaudited table presents a reconciliation of Adjusted Cost of Sales, Adjusted Cost of Sales as a Percentage of Revenue, Adjusted Gross Profit and Adjusted Gross Margin to the most directly comparable GAAP measures:

The following unaudited table presents a reconciliation of Charging Network Margin, Adjusted Cost of Sales, Adjusted Cost of Sales as a Percentage of Revenue, Adjusted Gross Profit and Adjusted Gross Margin to the most directly comparable GAAP measures:

Three Months Ended

Six Months Ended

(dollars in thousands)

GAAP total charging network revenue

GAAP charging network cost of sales

Charging Network Margin

GAAP cost of sales

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Three Months Ended

Six Months Ended

(dollars in thousands)

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Adjusted General and Administrative Expenses as a Percentage of Revenue

1 In the second quarter of 2023, the Company reclassified insurance proceeds from property losses from "other" to "loss on disposal of property and equipment, net of insurance recoveries, and impairment expenses." Previously reported amounts have been updated to conform to the current period presentation.

2 For the three months ended March 31, 2024, comprised primarily of costs related to the organizational realignment announced by the Company on January 17, 2024.

For the three months ended March 31, 2023, comprised primarily of costs related to the previous reorganization of Company resources announced by the Company on February 23, 2023 and the petition filed by EVgo in the Delaware Court of Chancery in February 2023 seeking validation of EVgo's charter and share structure (the "205 Petition").

For the six months ended June 30, 2024, comprised primarily of costs related to the organizational realignment announced by the Company on January 17, 2024.

For the six months ended June 30, 2023, comprised primarily of costs related to the previous reorganization of Company resources announced by the Company on February 23, 2023 and the petition filed by EVgo in the Delaware Court of Chancery in February 2023 seeking validation of EVgo's charter and share structure (the "205 Petition").

The following unaudited table presents a reconciliation of EBITDA, EBITDA Margin, Adjusted EBITDA, and Adjusted EBITDA Margin to the most directly comparable GAAP measure:

Three Months Ended

Six Months Ended

(dollars in thousands)

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Loss on disposal of property and equipment, net of insurance recoveries, and impairment expense

Loss (gain) on investments

Loss on investments

Bad debt expense

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Adjusted EBITDA Margin

2 For the three months ended March 31, 2024, comprised primarily of costs related to the organizational realignment announced by the Company on January 17, 2024.

For the three months ended March 31, 2023, comprised primarily of costs related to the previous reorganization of Company resources announced by the Company on February 23, 2023 and the 205 Petition.

For the six months ended June 30, 2024, comprised primarily of costs related to the organizational realignment announced by the Company on January 17, 2024.

For the six months ended June 30, 2023, comprised primarily of costs related to the previous reorganization of Company resources announced by the Company on February 23, 2023 and the 205 Petition.

The following unaudited table presents a reconciliation of Capital Expenditures, Net of Capital Offsets, to the most directly comparable GAAP measure:

Three Months Ended

Six Months Ended

(dollars in thousands)

Capital expenditures

GAAP capital expenditures

Capital offsets:

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EVgo has a history of operating losses and negative operating cash flows.

As of March 31, 2024, EVgo had $175.5 million of cash, cash equivalents and restricted cash and working capital of $157.4 million.

As of December 31, 2023, EVgo had $209.1 million of cash, cash equivalents and restricted cash and working capital of $178.1 million.

The Company’s net cash outflow for the three months ended March 31, 2024 was $33.6 million.

EVgo believes its cash and cash equivalents on hand as of March 31, 2024 are sufficient to meet EVgo’s current working capital and capital expenditure requirements for a period of at least twelve months from the filing date of this Quarterly Report.

As of June 30, 2024, EVgo had $162.7 million of cash, cash equivalents and restricted cash and working capital of $135.4 million.

As of December 31, 2023,

EVgo had $209.1 million of cash, cash equivalents and restricted cash and working capital of $178.1 million.

The Company’s net cash outflow for the six months ended June 30, 2024 was $46.4 million.

EVgo believes its cash and cash equivalents on hand as of June 30, 2024 are sufficient to meet EVgo’s current working capital and capital expenditure requirements for a period of at least twelve months from the filing date of this Quarterly Report.

To date, EVgo’s primary sources of liquidity have been cash flows from the CRIS Business Combination, revenues from its various revenue streams, government grants, proceeds from sales of EVgo’s Class A common stock, including under the ATM Program and an underwritten equity offering, and loans and equity contributions from its previous owners.

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In certain circumstances (including an early termination of the Tax Receivable Agreement due to a change of control or otherwise), payments under the Tax Receivable Agreement may be accelerated and/or significantly exceed the actual benefits, if any, the Company Group realizes in respect of the tax attributes subject to the Tax Receivable Agreement.

In the case of such an acceleration in connection with a change of control, where applicable, EVgo generally expects the accelerated payments due under the Tax Receivable Agreement to be funded out of the proceeds of the change of control transaction giving rise to such acceleration, which could have a significant impact on EVgo’s ability to consummate a change of control or the proceeds received by EVgo’s stockholders

in connection with a change of control.

However, the Company Group may be required to fund such payment from other sources and, as a result, any early termination of the Tax Receivable Agreement could have a substantial negative impact on EVgo’s liquidity or financial condition.

The following table summarizes EVgo’s consolidated cash flows:

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

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Cash flows provided by financing activities

Net decrease in cash, cash equivalents and restricted cash

Net (decrease) increase in cash, cash equivalents and restricted cash

Operating Activities.

Cash used in operating activities for the three months ended March 31, 2024 was $14.1 million compared to $19.3 million for the three months ended March 31, 2023.

The year-over-year change primarily reflected a $17.8 million increase in cash flows from accounts receivable, net, a $12.3 million increase in cash inflows from operations, and a $2.7 increase in cash flows from prepaid expenses, other current assets and other assets, partially offset by a $15.5 million decrease in cash flows from deferred revenue, a $6.6 million decrease in cash flows from accounts payable, and a $4.8 million decrease in cash flows from accrued liabilities.

Cash used in operating activities for the six months ended June 30, 2024 was $6.5 million compared to $22.5 million for the six months ended June 30, 2023.

The year-over-year change primarily reflected a $14.7 million increase in cash flows from operations, an $11.5 million increase in cash inflows from accounts receivable, net, and a $9.0 million increase in cash flows from accounts payable, partially offset by an $8.7 million decrease in cash flows from accrued liabilities, a $7.0 million decrease in cash flows from deferred revenue, and a $2.5 million decrease in cash flows from prepaid expenses, other current assets and other assets.

Investing Activities.

Cash used in investing activities for the three months ended March 31, 2024 was $21.0 million, compared to $65.2 million for the three months ended March 31, 2023.

Cash used in investing activities for the six months ended June 30, 2024 was $45.1 million, compared to $99.9 million for the six months ended June 30, 2023.

The decrease was primarily driven by a decrease in purchases of property, equipment and software.

Financing Activities .

Cash provided by financing activities for the three months ended March 31, 2024 was $1.5 million compared to $1.9 million for the three months ended March 31, 2023.

The decrease was driven primarily by a decrease in proceeds from capital-build funding received for charging stations during the three months ended March 31, 2024.

Cash provided by financing activities for the six months ended June 30, 2024 was $5.2 million compared to $133.4 million for the six months ended June 30, 2023.

The decrease was driven primarily by the proceeds from the issuance of Class A common stock in the Company’s underwritten equity offering during 2023.

Working Capital .

EVgo’s working capital as of March 31, 2024 was $157.4 million, compared to $178.1 million as of December 31, 2023.

The decrease was driven primarily by a $33.6 million decrease in the Company’s cash, cash equivalents and restricted cash and a $0.5 million increase in operating lease liabilities, current, partially offset by a $5.6 million decrease in accrued liabilities, a $2.8 million increase in accounts receivable, capital-build, and a $2.5 million decrease in deferred revenue, current.

EVgo’s working capital as of June 30, 2024 was $135.4 million, compared to $178.1 million as of December 31, 2023.

The decrease was driven primarily by a $46.4 million decrease in the Company’s cash, cash equivalents and restricted cash and a $6.0 million increase in accounts payable, partially offset by a $3.9 million increase in accounts receivable, capital-build, and a $3.7 million decrease in deferred revenue, current.

Contractual Obligations and Commitments .

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The Company has one reporting unit and performs its annual goodwill impairment testing on October 1 each year.

of fair value over carrying value observed), (ii) downward revisions to internal forecasts, decreases in market multiples (and the magnitude thereof) or changes to interest rates, if any, and (iii) declines in market capitalization below book value (and the magnitude and duration of those declines), if any.

In assessing the possibility that a reporting unit’s fair value has been reduced below its carrying amount due to the occurrence of events or circumstances between annual impairment testing dates, the Company considers all available evidence, including (i) the results of impairment testing from the most recent testing date (in particular, the magnitude of the excess of fair value over carrying value observed), (ii) downward revisions to internal forecasts, decreases in market multiples (and the magnitude thereof) or changes to interest rates, if any, and (iii) declines in market capitalization below book value (and the magnitude and duration of those declines), if any.

The Company determines fair value using the market approach, when available and appropriate, or the income approach, or a combination of both and assesses the valuation methodology based upon the relevance and availability of the data at the time the valuation is performed.

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Changes in the estimated fair value of the warrants are recognized in “changes in fair value of warrant liabilities” in the consolidated statements of operations.

The fair value of the Private Placement Warrants on the date of issuance and on each measurement date is estimated by reference to the trading price of the public warrants, which is considered a Level 2 fair value measurement, or using a Monte Carlo simulation methodology, which is considered a Level 3 fair value measurement and includes inputs such as EVgo’s stock price, the risk-free interest rate, the expected term, the expected volatility, the dividend rate, the

exercise price and the number of Private Placement Warrants outstanding.

Assumptions used in the Monte Carlo model are subjective and require significant judgment .

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For a discussion of EVgo’s new or recently adopted accounting pronouncements, see “ Part I, Item 1.

Financial Statements – Note 2 – Summary of Significant Accounting Policies ” as of and for the quarters ended March 31, 2024 and 2023.

Financial Statements – Note 2 – Summary of Significant Accounting Policies ” as of and for the three and six months ended June 30, 2024 and 2023.

On April 5, 2012, the JOBS Act was signed into law.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis