EVgo, Inc. (EVGO) Q3 2026 Earnings Report, Transcript and Summary

Good day, and thank you for standing by. Welcome to the EVgo Third Quarter 2026 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Heather Davis, Vice President of Investor Relations. Please go ahead.

Good morning, and welcome to EVgo's Third Quarter 2026 Earnings Call. My name is Heather Davis, and I am the Vice President of Investor Relations at EVgo. Joining me on today's call are Badar Khan, EVgo's Chief Executive Officer; and Keefer Lehner, EVgo's Chief Financial Officer. Today, we will be discussing EVgo's third quarter 2026 financial results and our outlook for the year, followed by a Q&A session. Today's call is being webcast and can be accessed on the Investors section of our website at investors.evgo.com. The call will be archived and available there, along with the company's earnings release and investor presentation after the conclusion of this call. During the call, management will be making forward-looking statements that are subject to risks and uncertainties, including expectations about future performance. Factors that could cause actual results to differ materially from our expectations are detailed in our SEC filings, including in the Risk Factors section of our most recent annual report on Form 10-K and quarterly reports on Form 10-Q. The company's SEC filings are available on the Investors section of our website. These forward-looking statements apply as of today, and we undertake no obligation to update these statements after the call. Also, please note that we will be referring to certain non-GAAP financial measures on this call. Information about these non-GAAP measures, including definitions and applicable reconciliations to the corresponding GAAP measures can be found in the earnings materials available on the Investors section of our website. With that, I'll turn the call over to Badar Khan, EVgo's CEO.

Thank you, Heather. Before I turn to our strategic priorities, I want to address the unsolicited nonbinding offer that LS Power, our majority shareholder, has made for the shares of EVgo that they don't currently own at $2 per share in a take-private transaction. The Board has established a special committee comprised of independent and disinterested directors to review and evaluate the proposal with the assistance of independent legal and financial advisers. No decisions have been made. And when we have an update to share, we will be sure to do so. That said, we're here to talk about our third quarter results. Therefore, we won't be commenting further on the proposal at this time. We appreciate you keeping your questions at the end of the call focused on our performance and our results. With that, today, I want to cover 4 key areas: our improved competitive positioning, the progress we are making on NACS and our next-generation charging architecture, the partnerships that are strengthening and expanding our site pipeline and the actions we are taking to accelerate our path to sustainable profitability. Throughout EVgo's 16-year history, we've continually evolved and improved through the innovation and dedication of our talented team. Most charging companies in the industry buy charging equipment from power electronics companies that have very little direct interaction with end-use customers. Today, we have designed our own next-generation charging architecture, joining only a handful of companies that design their own equipment. At the heart of EVgo's next-gen design is a focus on the EV driver experience, leveraging learnings from 1.9 million customer accounts and over 10 million charging sessions per year. Features include better cable maneuverability, a touchless payment interface and advanced hardware and firmware to enhance reliability and elevate the charging experience. When we first started, 50 kilowatts was considered fast. Our technology is evolving rapidly to deliver faster charging and fast charging stations make EV ownership more convenient and drive broader EV adoption. In 2022, 70% of our stores were 50 kilowatts. Today, 70% of our stores are 350 kilowatts, and we are planning the launch of our 750-kilowatt charging architecture next year. Our site quality has also improved from 2 store sites with local and regional site hosts in our early days to up to 20-store flagship sites in high-quality locations with premier national site hosts. EVgo is bringing fast charging where drivers go about their daily lives. We delivered excellent throughput and top line growth by primarily targeting CCS drivers. Tesla drivers who make up more than half of all electric vehicles on U.S. roads can charge in our CCS cables but with adapters. Now we are leaning into the next transition and working with Tesla to add EVgo Superchargers as well as adding native NACS stalls across our network that Tesla drivers can find on their NAV. Over time, this doubles our addressable market. Our agreement with Tesla to deploy EVgo branded superchargers continues to progress. As a reminder, EVgo owns these chargers, selects their locations and sets pricing, while Tesla builds, maintains and operates them. EVgo Superchargers are natively visible in Tesla's navigation and trip planner and provide the over 3.5 million Tesla drivers seamless access to the EVgo footprint. Our first EVgo Supercharger site in the Chicago area is now open, and we expect the second site just outside of Houston to follow in Q4. Together, these 2 locations represent the first 20 of hundreds of stores expected to open nationwide as part of EVgo's plan to add superchargers in high-demand locations. In addition, EVgo Superchargers and EVgo NACS stations are now available in the Tesla now, making it easier for Tesla drivers to find a convenient EVgo station on the go. Alongside the superchargers, we are rolling out NACS connectors across our existing network. And our goal remains for all 2023 vintage and newer sites to have NACS within 2 years, which is expected to be 2/3 of our network by the end of 2028. Let's look at where that rollout stands today, but over 290 operational NACS stalls that is up from 100 at the end of last year, and we expect to reach approximately 400 by year-end 2026. NACS vehicles now account for approximately 9% of EVgo's public network throughput, more than doubling from last year as our first NACS stores come online. Why does this matter? For years, EV charging in the U.S. has been split across competing connector standards, which created friction for drivers who have to buy adapters, adding cost and complexity for consumers. That is changing. The auto OEMs are standardizing around NACS, which will help drivers and CPOs alike and ultimately be beneficial for long-term adoption of EVs. The early performance is encouraging. While our NACS stores are still ramping and are not yet as productive as our CCS stalls, they delivered a 35% higher charge rate than CCS stores in the third quarter. This is driven by the current mix of newer NACS vehicles and high-powered 350-kilowatt equipment. In other words, we could see considerable upside approaching 400-kilowatt hours in throughput per store per day if our NACS stalls reach the same level of utilization as our CCS stalls today. We are scaling NACS deliberately to attract Tesla and other NACS drivers without an adapter to the network. We expect the rollout to create some near-term pressure on throughput per stall as new connectors ramp, but we believe NACS is an important long-term opportunity to grow our business and gain market share. EVgo has successfully navigated the connected transition before from CHAdeMO to CCS, which helped us scale our business to one of the largest fast charging companies in the U.S. today. This quarter, we also unveiled our first look at our next-generation charging architecture developed at EVgo's Innovation Lab and designed to future-proof the network as vehicle battery capabilities advance, while focusing on features to enhance the customer experience. The system could deliver up to 750 kilowatts of charging power with dynamic power sharing, which automatically delivers the exact output each vehicle needs, adjusting in real time and smoothing demand spikes. Every station will include NACS as part of our effort to increase our addressable market. We are redesigning the EV driver user experience, including touchless payments and easier cable management. And we are building for reliability with advanced hardware and firmware that elevates every charging session. The final charger design is expected to be unveiled in 2027 as EVgo begins to deploy the new architecture. EVgo's site host partnerships with grocers, retailers and others allow us to expand our network across the nation. Our site hosts are excited about the foot traffic EVgo's fast charging stations bring to their business, allowing us to install much better, larger sites, including flagship locations we have built with support from GM, just as a site at Meijer in Warren, Michigan. Fast charging is an ideal fit for grocery store locations like Meijer given that the average American household visit the grocery store 2 to 3 times per week. These locations are an important part of our growth strategy, and we've recently expanded our relationships with Brixmor and Regency Centers, 2 of the largest REITs in the U.S., which together will bring more than 900 new fast chargers to shopping centers. These companies have extensive portfolios and feature anchor tenants, including Albertsons, Kroger, Publix, H-E-B, Whole Foods, Trader Joe's and Sprouts. Brixmor has been an EVgo partner since 2016. This expansion is expected to add more than 500 new fast chargers and take us to over 90 centers, which is more than 25% of Brixmor's U.S. portfolio. The Regency expansion is expected to add more than 400 new fast chargers and increase Regency's EV infrastructure footprint by more than 20%. With these expanded partnerships, EVgo is building exactly where drivers want to be. Let's now turn to our path to sustainable profitability. The past 2 years have not been without their challenges. EV sales are slower in the U.S. than we originally expected, especially CCS sales as the industry transitions to NACS. Federal incentives for EV purchases and EV charging infrastructure were eliminated last year. This year's summer driving season did not have its typical seasonal pickup, slowing growth in EVgo's throughput per store this year, which has also been muted by the roll-off of low-margin legacy OEM charging credits. As a fast charging operator, we are focusing on those things within our control. First, we are deploying capital more efficiently and investing where demand is strongest. That means building fewer, better sites in the locations where customer demand is highest, moving faster to close site agreements and growing partnerships with portfolios like Regency and Brixmor and with rideshare operators. Some sites we planned to launch this year will go back into the funnel until a more opportune time for their development. For 2026, we expect to deploy 550 to 650 new public owned and operated sites with approximately $100 million less gross CapEx spend in 2026 than our previous targets. Our store pipeline is the strongest it's ever been. And while our 2026 and '27 vintage cohorts are smaller than we initially expected, we believe these will be our best-performing vintage cohorts. Second, we are aiming to get more from every store. We are focused on network health through hardware and software upgrades and the addition of NACS connectors. About 70% of our network is now 350 kilowatts or higher, and our new 750-kilowatt system with dynamic power sharing will give every driver the energy they need. We are also using AI-driven insights to design marketing campaigns that increase throughput, and we're removing lower power legacy equipment through our new program. Third, we are enacting cost controls. We've identified and are implementing a range of G&A cost reduction measures, spanning headcount, discretionary spend and other cost efficiency measures, including opportunities to further leverage AI. We estimate these efficiency efforts will enable adjusted G&A to be at least 15% below our implied previous view of $173 million to $178 million for 2027. This fully offset cost inflation, increased costs from higher year-over-year growth and a larger installed base. As a reminder, without growth expenses, which are estimated around 25% of total adjusted G&A, the company is already adjusted EBITDA positive. That's why we are confident our business model allows us to dial up or dial down our growth. And as a result, we control how much we invest and where we invest. We expect these actions will lead to more sustainable growth in adjusted EBITDA over the coming quarters. With that, I'll now turn it over to Keefer to share financial details from the third quarter and EVgo's 2026 outlook.

Thank you, Badar. We ended Q3 with 5,530 stalls in operation, an approximate 3.3x increase compared to the end of 2021 and up 20% from 4,590 a year ago. We added 160 new stalls to the network in Q3 2026, including 100 new public EVgo-owned stalls. Our customer accounts continue to grow, and we are now over 1.9 million strong. We have over 290 NACS stalls today, and we'll continue to expand NACS options for EV drivers through retrofits at our 350-kilowatt sites and new build locations as well as deploying our EVgo Supercharger sites. Total energy dispense on EVgo's network was 392 gigawatt hours for the trailing 12 months and a 12% increase from the 350-gigawatt hours in the TTM period ended Q3 2025. Charging gross margin was 39% over the last 12 months compared to 37% for the prior year's TTM. Adjusted EBITDA margin was a positive 1% on a trailing 12-month basis compared to negative 6% in the prior year period. Now turning to our third quarter results in detail. Our throughput on the public network during the third quarter was 103-gigawatt hours, an 8% increase compared to last year's 95-gigawatt hours and a 4% increase sequentially from 99-gigawatt hours in the second quarter. Daily throughput per stall was 283-kilowatt hours, 4% lower than the 295 we reported in Q3 2025, but 3% higher sequentially. OEM charging credits contributed 13-kilowatt hours of daily throughput per stall in Q3 2026, down 69% from 42-kilowatt hours a year ago. Importantly, if you exclude OEM credits, daily throughput per stall actually grew 7% year-over-year to 270-kilowatt hours from 253-kilowatt hours in 2025, with details included in our presentation appendix. Charge rate was 60 kilowatts versus 55 last year and utilization was 20% versus 22%. Revenue for Q3 2026 was $91 million, a 1% decrease compared to $92 million in Q3 2025, with the decline driven entirely by our noncore business. In our core charging business, charging network revenue was $72 million, a 29% increase versus $56 million in the prior year, driven primarily by a larger operating network, representing our 19th consecutive quarter of double-digit year-over-year charging revenue growth. eXtend revenue was $16 million, down $16 million from $32 million in the same period in 2025, driven by lower construction revenue. A reminder that eXtend will continue to largely trend lower over the next several quarters and by 2028 will be a $5 million to $10 million per year revenue business. AV and ancillary revenue was $3 million versus $5 million in the prior year. As we've noted before, this revenue line remains episodic as it's driven by deployment timing for long-duration projects with our AV partners. Charging network gross profit was $28 million versus $20 million last year. Charging network gross margin was 39%, a 380-basis point increase, driven primarily by increased network OEM revenue. Third quarter adjusted gross profit was $32 million, up 21% versus the prior year's $27 million. Adjusted gross margin was 35% in Q3 versus 29% in the same period in 2025. Adjusted G&A for the quarter was $36 million versus $32 million last year, representing 39% of revenue compared to 34% in Q3 2025 and is in line with expectations as we continue investing in network scale, accelerating stall deployment and our latest generation architecture. If we look at adjusted G&A as a percentage of our core charging business, it was 50% in Q3 this year, improving from 57% last year. We believe this view helps demonstrate the operating leverage of G&A by removing the episodic eXtend and AV revenue noise. The above resulted in an adjusted EBITDA loss of $3.5 million in the third quarter of 2026, improving from a loss of $5 million in the third quarter of 2025. Now let's look at our balance sheet and liquidity position. As a reminder, EVgo has 2 debt facilities to draw upon to finance our infrastructure build-out, a $750 million DOE loan with availability through January 2030 and a 2042 maturity and a $300 million commercial bank facility, including $75 million of uncommitted incremental availability with availability through July 2028 and a 2030 maturity. In the third quarter, we borrowed $17 million from the commercial facility. We have approximately $620 million of available capacity across the 2 facilities, both at attractive financing rates. Combined with our cash, cash equivalents and restricted cash, as of September 30, EVgo has approximately $787 million in available liquidity. Turning to our outlook and guidance for 2026. As Badar discussed, we are adapting to the current EV sales environment and adjusting our deployment schedule. We believe focusing on higher daily throughput per stall and financial return sites for 2026 and 2027 will help us on the path to sustainable profitability. For the full year 2026, we expect to add 1,075 to 1,275 new stalls, including 600 to 750 new public and EV stalls and 475 to 525 eXtend stalls. Our expectations for 2026 are updated to reflect some build sliding into 2027 as well as adding certain sites back into the funnel for future development. Importantly, there is one large 50-stall AV site that we are aiming to operationalize in late Q4 2026, the timing could slip into 2027. Turning to the income statement. EVgo anticipates total 2026 revenues in the $375 million to $400 million range, reflecting lower throughput outlook and the updated stall cadence. Regarding our non-charging revenue, we continue to expect 2026 eXtend revenue in the $90 million to $95 million range. AV ancillary revenues are anticipated to be $30 million to $45 million. The updated range reflects the opening timing for one large AV site that is expected in late December, although it may move into early 2027. Adjusted G&A is expected to be approximately $145 million for the year, approximately 5% lower than our initial guidance of $150 million to $155 million. With the additional cost control initiatives put in place, we expect our 2027 adjusted G&A will be approximately 15% below prior expectations. These result in anticipated 2026 adjusted EBITDA loss in the range of negative $30 million to negative $15 million. I want to reiterate our excitement about both the near-term and long-term opportunity for EVgo to organically expand our network, continually enhance the customer experience and drive shareholder value creation via the realization of the EBITDA potential of this business. With that, we will open the call to Q&A.

[Operator Instructions] And our first question comes from the line of Chris Dendrinos of RBC Capital Markets.

I wanted to follow up here a bit on some of the throughput performance. And I think you highlighted some of the puts and the takes here just given some of the maybe OEM credit impacts. I guess if I just look at this quarter versus last year, I think throughput per stall day was down. So could you maybe, I guess, dive into the drivers here and just kind of what you're seeing on the network and confidence in overall throughput per day increasing going forward?

Yes. So throughput in the third quarter was a little softer than we expected due to the issues that we have been discussing on the last couple of calls, which we did continue to see in Q3. So first is a slower ramp from the late '25 cohort. That's the cohort, if you remember, that we have very high offsets. The roll-off of these customers on OEM charging credits and their conversion to retail continues to be lower than we expected. The declining competitiveness of our lower power 50-kilowatt stores in particular, and of course, lower VIO. So those are the kind of the issues. We did also see lower -- a typical seasonal pickup from the summer driving season. We did see that lower this year, although that looks like it was across the entire industry. I think as a reminder, Chris, a couple of these things are really temporary. The OEM charging credit customers rolling off, in particular, will be done by the end of this year. If you take out those customers, they're really masking some pretty good underlying growth, which is in that presentation appendix slide. You can see that underlying daily throughput per store is actually up about 7% year-over-year. And the lower power, the 50-kilowatt stores, if you remember, they were something like 70% of our network 4, 5 years ago. They'll all be gone within the next couple of years, if not sooner. So those things are really quite temporary. If I look out into the longer term, as I said in the last call, our mature 350-kilowatt machines, they're already 70% of the network, and they're in the mid-300s in daily throughput per store, which is pretty much where our 2028 target is. We said last quarter, the top 15% of our network is already at 600-kilowatt hours per store per day. We've got our next-generation architecture that's up to 750 kilowatts coming online next year. And I think the really interesting additional nugget that we provided on the call today is what's happening with our NACS retrofits. We can see that our NACS stores have a much higher charge rate than our CCS stores. And the reason that's super interesting to us is that when these NACS stores reach the same level of utilization as our CCS stores with that higher charge rate, again, that's because the vehicles are -- tend to be a little faster. Our machines that have the NACS stores are all 350s versus including the 150s. You could actually see daily throughput per store exceeding what we're expecting system-wide by 2028. So we are -- NACS throughput is now 9% of our network. We don't have -- our NACS stores are not 9% of our network. So that tells us there's a ton of demand for these NACS stores, which gives us great insight into where to deploy more of these stores over the next couple of years. It will be 2/3 of our network will have NACS. So for all those reasons, we feel really good about where we see throughput per store growing. I mean I should also say we've got our first EVgo Supercharger site live in a week or so, but I will say it's off to a flying start. So we're thrilled about that, too.

Got it. And I guess maybe just a follow-up on that comment around NACS. And yes, I mean, really interesting to see the utilization and throughput rates here. And I think going back to last quarter, you all had maybe highlighted that those Tesla stalls had maybe a lower initial throughput or utilization rates just given the build-out of that. So can you maybe speak to that dynamic and what you're kind of seeing from those Tesla specific stalls?

Yes. So Chris, we -- the EVgo Superchargers that are being deployed and operated by Tesla, though the first stall, the first site went live last week. What we've been talking about in the past is that our -- the retrofit NACS stores that we've been deploying over the part of the last 9 or 12 months because we are ramping those up, Tesla drivers and NACS drivers aren't used to charging at NACS stores. We are -- we have lower utilization, lower productivity on those NACS stores. And of course, that's ramping. As I said on the call just today that now 9% of our total network is actually coming from NACS drivers. They're charging both at our NACS stores, but actually a fair number of them are also charging at our CCS stores with adapters, which gives us really good insight into where to deploy the next wave of NACS stores. Our strategy up until this point has really been deploying NACS retrofits where we are taking out CCS stores that are very productive putting in NACS so that we can capture where the majority of the market is going to be over the next couple of years without harming throughput too much. The data that we're now seeing tells us actually we can accelerate our NACS deployment and get great throughput. And I think that's a really nice place to be and a really nice turning point for the company.

[Operator Instructions] Our next question comes from the line of Chris Pierce of Needham.

You guys talked a couple of times about new EV sales being the tip of the spear and that sort of being the driver of sort of lowering the stall guidance you have out there. I guess I was wondering what you could share on used EV sales, used EV drivers, if you're seeing different behavior between that cohort of new EV drivers as EV sales pick up.

Chris, I think that a couple of things to say about EV sales in general. We saw the kind of quarterly new EV sales really reached the bottom in the spring, I would say, kind of the spring of this year. And we've actually seen quarterly growth since then year-over-year, when we start to see the October EV sales in November and December, I suspect we'll see tremendous year-over-year growth versus last year because of the incentives rolled off in September. So that's actually a trajectory of EV sales that's actually pretty good since the bottom that was really around the spring of this year. For used EV sales, the story is actually even better. Used EV sales have been rising pretty much consistently for the last couple of years since we've seen the data being reported. And we're thrilled with it because as we've said, on a few different calls before, used EV drivers are accessing electric vehicles at a lower price point. So we're bringing in more -- a broader customer segment. Used EV drivers will more likely rely on public fast charging. They're less likely to have charging at home. And we know that they charge in our network at a higher rate than new EV drivers. And so for all of those reasons, the used EV market looking more like the rest of the automotive market is just a tremendously positive tailwind for the company.

Okay. And should we think of those as using used Tesla stalls? That's why you want to I'm just kind of curious, or is it too soon to see if like -- I know that that's what the hope was, but I just kind of -- or is it too early to know if they're really using those stalls -- because I mean, I guess I would have just thought that the vintage stalls where you had the higher CapEx, that might be where you'd see a larger percentage of used EV drivers and that would sort of ramp the trajectory of throughput on those stalls, but maybe that's not kind of like a -to-one correlated as I thought.

No, I don't think it is a one-to-one correlation, Chris. Maybe I think it's just worth as a reminder, NACS vehicles, both Tesla and non-Tesla are now about 60% of total VIO. And we expect that, that will grow to about 80 or more percent of total VIO by 2030. So it's a super important growing part of the market. And as you know, we've had about a 20-fold growth in revenue in the last 5 years. I think from '21 to '25, it's 100% CAGR, puts us in the top 1% of public companies in terms of growth rate. All of that has been through serving less than half the market. So the opportunity for us to be able to capture NACS drivers essentially doubles the addressable market for us. And that's a tremendously positive tailwind for us. And that's why we're leaning in so heavily on all the data points around figuring out where our NACS demand is highest as well as the EVgo Superchargers, which we expect will attract both new and used EV drivers.

I'm showing no further questions at this time. I'll now turn it back to Badar Khan, CEO, for closing remarks.

Great. Well, thank you, everyone. We saw almost a 30% year-over-year growth in our core charging business. And together with the deployment of EVgo Superchargers, NACS stalls, our next-generation 750-kilowatt charging architecture and just excellent site host partnerships, we are really very excited about the long-term value creation trajectory for the company. So thanks for joining, and see you all next time.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.