On December 6, 2023, ChargePoint Holdings Inc (CHPT, Financial) released its 8-K filing, detailing the financial outcomes for the third quarter of fiscal year 2024, which ended on October 31, 2023. The report highlighted a year-over-year revenue decline of 12%, with the company facing a challenging macroeconomic environment and internal execution hurdles.
Financial Performance Summary
ChargePoint's third-quarter revenue stood at $110.3 million, a decrease from the previous year's $125.3 million. The decline was primarily attributed to a 24% drop in networked charging systems revenue, which fell to $73.9 million. Conversely, subscription revenue saw a significant increase of 41%, reaching $30.6 million. The GAAP gross margin turned negative at 22%, a stark contrast to the previous year's 18%, mainly due to a $42 million inventory impairment charge. This charge was necessary to address excess supply related to product transitions and to align inventory with current demand.
Income Statement and Balance Sheet Highlights
The GAAP net loss worsened to $158.2 million from $84.5 million year-over-year, with the non-GAAP pre-tax net loss also increasing to $106.3 million. The non-GAAP Adjusted EBITDA Loss was $97.4 million, both reflecting the substantial inventory impairment charge. ChargePoint's balance sheet showed cash, cash equivalents, and restricted cash totaling $397.4 million, bolstered by $233.1 million in gross proceeds from an at-the-market share offering during the quarter. The company has no debt maturities until 2028 and a $150 million revolving credit facility that remains undrawn.
Liquidity and Capital Resources
ChargePoint's liquidity position appears robust, with nearly $400 million in cash and equivalents, including the proceeds from the share offering. The company's proactive cost-saving measures and capital raising efforts have fortified its balance sheet, providing a solid foundation to navigate current market conditions and invest in strategic initiatives.
Outlook and Management Commentary
Rick Wilmer, ChargePoint's President and CEO, acknowledged the quarter's shortcomings but reaffirmed the company's commitment to achieving positive non-GAAP adjusted EBITDA by the fourth quarter of calendar year 2024.
ChargePoint’s third quarter execution came up far short of its goals in the face of continued challenging macroeconomic conditions and execution challenges," said Wilmer. "Though the quarter overall did not meet expectations, we did demonstrate how we continue to empower the entire EV ecosystem, across hardware and software, and we fortified our balance sheet, which leaves us well capitalized to execute on our strategy."
Investor and Analyst Perspectives
Investors and analysts may have mixed reactions to ChargePoint's Q3 results. The revenue decline and negative gross margin due to the inventory impairment charge may raise concerns. However, the increase in subscription revenue and the company's strong liquidity position could be viewed as positive indicators of ChargePoint's resilience and potential for future growth.
ChargePoint will host a webcast to review the third quarter fiscal 2024 financial results, providing an opportunity for investors to gain further insights into the company's performance and strategic direction.
For a detailed understanding of ChargePoint's financials and management's plans, interested parties are encouraged to review the full 8-K filing and participate in the upcoming webcast.
Explore the complete 8-K earnings release (here) from ChargePoint Holdings Inc for further details.
