Release Date: June 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ChargePoint Holdings Inc (CHPT, Financial) reported Q1 revenue of $107 million, above the midpoint of their guidance range.
- Non-GAAP gross margin improved to 24%, up from 22% in the previous quarter.
- Non-GAAP operating expenses decreased to $66 million, down $8.4 million from the last quarter.
- The company achieved a non-GAAP adjusted EBITDA loss of $36 million, ahead of plan.
- ChargePoint Holdings Inc (CHPT) formed new partnerships, including a significant deal with the U.S. Navy and a collaboration with AirBnB to increase EV charging availability.
Negative Points
- Revenue was 18% lower year-on-year due to lower hardware revenue.
- Inventory levels increased by 13%, primarily due to construction and infrastructure delays.
- The company experienced delays in eight figures worth of deals, pushing them to later quarters.
- Cash and cash equivalents decreased to $292 million from $358 million last quarter.
- The company expects the inventory normalization process to take the rest of the year, potentially impacting margins.
Q & A Highlights
Q: What is the expected timeline for recognizing sales from the significant number of new wins, including the Navy program?
A: We will see some sales this year, but we expect the bulk of it to be next year. - Richard Wilmer, CEO
Q: Can you elaborate on the new joint development agreement with WNC and how it aligns with your hardware strategy?
A: We have a robust hardware growth roadmap and adding WNC as a second partner increases our development bandwidth, allowing us to bring exciting new products to market. - Richard Wilmer, CEO
Q: What are the precursors to incremental capacity build-out with your customers, given the increasing utilization rates?
A: Institutions are recognizing the need for EV chargers to attract customers, leading to demand for chargers that may not directly correlate with EV sales. - Richard Wilmer, CEO
Q: How should we think about the inventory levels and the recent build-up?
A: The inventory is mostly finished goods that we are actively selling. We expect to bring this down in the second half of the year as we sell through the finished goods on hand. - Mansi Khetani, Interim CFO
Q: Have you received any incremental demand from customers interested in your fast product due to changes in the market, such as Tesla's exit?
A: Yes, we have seen some changes in market demand and have capitalized on these opportunities. - Richard Wilmer, CEO
Q: How do you plan to manage the high-cost inventory and transition to new products?
A: We will work through the existing inventory and have a strong process in place to avoid excess inventory. We expect to normalize inventory levels by the end of the year. - Richard Wilmer, CEO
Q: Can you provide more color on the expected revenue from larger programs in the second half of the year?
A: We expect a majority of our revenue to come in the second half due to large deals in our pipeline across all verticals, including new products like the paragraph launching in the second half. - Mansi Khetani, Interim CFO
Q: What is the outlook for operating expenses in the second half of the year?
A: We expect operating expenses to come down from Q1 levels. We have specific plans to reduce costs, including transitioning more engineering to our Asia partners. - Mansi Khetani, Interim CFO
Q: How do you approach the construction delays and site readiness issues impacting deal rollovers?
A: We account for these delays in our forecasts and do not expect them to decrease. We plan for a consistent level of deal rollovers throughout the year. - Richard Wilmer, CEO
Q: What gives you confidence in the revenue rebound in the second half of the year?
A: We see signs of improvement in our pipeline and RFP success rates, giving us confidence for the second half despite the macro overhang in Q2. - Mansi Khetani, Interim CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
