EVgo, Inc. (NASDAQ:EVGO) Q2 2023 Earnings Call Transcript

EVgo, Inc. (NASDAQ:EVGO) Q2 2023 Earnings Call Transcript August 2, 2023

EVgo, Inc. misses on earnings expectations. Reported EPS is $-0.51 EPS, expectations were $0.22.

Operator: Ladies and gentlemen, thank you for standing by and welcome to the EVgo, Inc. Q2 2023 Earnings Call. I would now like to turn the call over to Heather Davis, Vice President, Investor Relations. Please go ahead.

Heather Davis: Good morning and welcome to EVgo’s second quarter 2023 earnings call. My name is Heather Davis, and I am the Head of Investor Relations at EVgo. Joining me on today’s call are Cathy Zoi, EVgo’s Chief Executive Officer; and Dennis Kish, Chief operating Officer. We’d like to send our congratulations to our CFO, Olga Shevorenkova on the arrival of her baby. Stephanie Lee is the company’s SVP of Accounting and Interim Chief Financial Officer will cover our financial results this quarter. Today, we will be discussing EVgo’s financial second quarter of 2023 financial results and outlook for the remainder of 2023 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 a reconciliation 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 Cathy Zoi, EVgo’s CEO.

Cathy Zoi: Thank you, Heather and good afternoon, everyone. I’m so pleased with the continued strong performance of results the EVgo team has achieved in the second quarter. Before we get into the details, I want to address the CEO succession plan we announced today. As you’ve likely seen, I’ve decided to retire as CEO and from the Board effective following our next earnings call expected around November 9th. After thorough consideration and process, the Board has decided that Badar Khan will be the next CEO of EVgo. Badar joined the Board of EVgo shortly after we went public and served as our lead Independent Director since that past. I just want to say that it has been a highlight of my career leading EVgo from a 50 person private enterprise focused on a then nation EV sector in 2017 to what it is today, a market-leading public company serving nearly 700,000 customers across the trillion-dollar EV market.

With EVgo’s talented team, we built a durable business yielding unprecedented growth of charger deployments, network utilization and company revenues. The company’s next opportunity lies in scaling a business to meet the ever-increasing and evolving fast-charging demand. And I’m absolutely confident that EVgo will be in extremely capable hands with Badar as CEO. I’ve been fortunate to know and to work with Badar in his capacity as a member of EVgo’s Board and I’ve seen firsthand the breadth of his talent. For those of you who are unfamiliar with Badar, he’s a 25-year veteran of the clean energy transformation and utility space. Badar has significant executive leadership experience overseeing large customer-facing energy organizations like National Grid USA and Direct Energy.

This experience aligns, ideally with the opportunity ahead for EVgo. He has a understanding of the dynamics of our business and is the right person to build on our successes and work with our outstanding executive team to take EVgo to the next level. He embodies the energy and vision that will take this company far. I want to offer my sincerest congratulations to my friend, and colleague Badar on this appointment and express to all of you my enthusiasm for the opportunity to continue working closely with Badar and my fellow EVgo colleagues and management team to ensure a smooth transition. I will remain fully engaged in day-to-day CEO until Badar formally steps into the role in November. After which, I will serve in an active advisory capacity until the end of the year.

I’m grateful that we are able to take these steps and put in place a transition plan that will set the company up for continued success. Let’s now move into the discussion of EVgo’s tremendous second quarter results. EVgo had a phenomenal second quarter. Our growth momentum continued across all key areas of the business. Stalls in operation, customers, utilization, network throughput and revenue EVgo achieved over $50 million in revenue, and incredible nearly five-fold year-over-year increase. And network throughput more than doubled versus Q2 last year. Results like this demonstrates the ability of EVgo’s DC fast-charging business model to scale rapidly alongside EV adoption. We expected an inflection point in our business that is coming faster than many anticipated.

Currently, they’re under 3 million EVs on US roads today. Just imagine the possibilities for EVgo, when electric vehicles are adopted at scale over the next 10 years and we’re even better positioned to capitalize on our first mover advantage. Coupled with our rigorous underwriting criteria for asset deployment and multiple possible capital funding vehicles, the future of EVgo is brighter than ever. It is truly exciting to be accelerating the electrification of transportation in the United States through EV charging. EVgo’s network of over 2,500 operational DC stalls delivered an impressive 24.9 gigawatt hours in the second quarter with strength in all sectors. Retail throughput more than doubled and fleets throughput grew 4x. Total charging sessions on the network increase, 85% year-over-year.

Throughput on the network grew faster than session growth and significantly higher than operational stall growth and EV sales to MOD, the growth in throughput accelerated from the impressive growth demonstrated in the first quarter. In the second quarter, we achieved double-digit utilization across the entire network for the first time. Utilization exceeded 15%, at 30% of EVgo’s charging cells in June and with only around 1% EV adoption in the US. EVgo is experiencing mid-teens utilization and above in California, as well as markets outside of California, including Las Vegas, San Antonio, Dallas, Houston and Hartford New Haven. 27 different metropolitan areas had utilization above 10% in June. This growth in – EVgo we’ve got over 10 years of experience in navigating the complexities of fast-charging, and the know-how and relationships to rapidly expand that network to meet the needs of EV drivers and shareholders alike.

Our key strengths include, first, EVgo has built a growth engine. We identified great locations. We work collaboratively with OEM, utilities, suppliers, housing contractors to construct and operate charging and construction. Definitely, EVgo is a financially disciplined operator. We will only build sites when they are projected to meet our double-digit return requirements. Third, EVgo is a technology innovator. As a leader in a young and evolving sector, EVgo has developed best-in-class hardware IT for charging all EVs and proprietary software to create a seamless charging experience. This includes our mobile approximately, Autocharge+ EVgo Advantage, Rideshare EVgo Reservations and EVgo Inside. Our in-house technology developed under the direction of a world-class engineering team is a major differentiator in the industry.

And fourth EVgo ReNew, our comprehensive network upgrading program is in full flight. After assessing our original equipment in the field, we’ve upgraded or replaced over 350 stalls at strategically important locations and will continue to update the network as technology evolves. As you know, EVgo currently operates one of the largest DCFC charging networks in the United States. This collection of nationally distributed assets will deliver more throughput and generate more cash as new EVs are sold, driving operating leverage, increasing cash yields and driving higher returns on invested capital. Through our portfolio partners EVgo currently has thousands of prospective locations in our pipeline that pass our internal hurdles for investments.

This pipeline of locations provides ample opportunity for EVgo to capture more market share and create shareholder value by applying the same rigorous principles of financial discipline we’ve deployed over the past six years. We are in the very early innings for this sector with much, much more demand to come. Today, there are roughly 30,000 test charges in the US and by 2030, industry analysts estimates the country will need more than 300,000. No single company will meet that demand alone. But we believe our experience, flywheels and first mover advantages position us to remain a charging leader and we look forward to continuing to execute on our strategy of disciplined investments in the fast-charging space, while continuing to work closely with our OEM partners.

Let’s turn to an update on General Motors. Our partnership with GM remains strong and we will continue working with GM to expand our charging footprint and bring more fast charging to communities across the U.S. In fact, EVgo and GM announced yesterday that we have reached a milestone of 1,000 DCFC stalls deployed as part of our partnership to-date. The leadership from both EVgo and GM commemorated the occasion with a ribbon cutting in Metro Chicago on Tuesday with speakers from our Utility Partners and the state government joining us. We’ve added new GM Ultium signage to our chargers, we’ve identified locations where canopies make sense and we’re working together on integrating NACS connected into the network in a timetable that will meet the needs of GM drivers.

As you know, EVgo eXtend is our capital light business model where EVgo builds and operates charging stations on behalf of our eXtend partners and its success demonstrates EVgo’s agility to serve evolving market segments in an accretive manner. EVgo’s Seminole, eXtend contract with “Pilot Flying J” is going exceedingly well. We’re making progress with the 2,000 cell PSJ program, which translated into considerable revenue for EVgo in this quarter. PSJ’s first sites are commissioned with more coming soon and we expect new locations to be operational in the third quarter. EVgo and Pilot also partners for NEVI Grant application and were recently awarded the majority of funds in the first – in the funding from Ohio. In fact, every PSJ EVgo extend application we jointly submitted has been awarded funds.

In addition to eXtend wings for pilot, EVgo and Meijer also teamed up for several eXtend sites in Ohio that were selected for grant awards. Meijer is a great site post the EVgo owned locations and they’re seeking to bring EV charging to more of their stores through the eXtended model. Even the national interest around NEVI Grant, EVgo’s business development team is in active commercial discussions with numerous others for eXtend deals. EVgo’s success with PSJ both in terms of network deployment and funding wins has put us in the pole position to partner with retailers who are keen to participate in the fast-charging game. On fleet, EVgo continues to scale our strong partnerships with Uber and Lyft, making electrification accessible for Rideshare drivers via partner-specific charging rates across the country.

Growth in this segment will continue to climb as more electric vehicles become available to Ride share drivers. Our fleet hubs business also continued to grow with an exciting milestone crossed this quarter when the EVgo team operationalized a new dedicated 18 stall charging hub site in San Francisco with one of our autonomous vehicle partners. This take-or-pay contract didn’t anchor in the hub’s business, which we see as a significant area of growth in the medium-term as AV robo taxis and last mile delivery companies adapted all-electric fleets. And now let’s talk a bit about charging technology. Following the European auto sector’s convergence to CCS conductors in 2014 and Tesla’s own switchover to CCS for its European vehicles in 2018 the presumption had been that the US will follow.

But last quarter, a number of leading automakers announced plans to migrate to Tesla’s NACS connectors for model year 2025 or 2026 year is to be sold in North America. What does this mean for the EVindustry? Convergence to a standard connector will improve the customer experience and hence accelerate the march toward an all-electric future over the medium term. In the meantime, millions of CCS and CHAdeMO EVs will need to be supported on public fast-charging networks that use. And EVgo will serve them all. And our sustained support for electric for all EVgo currently charges over 50 different models of EVs with a variety of connector types including CCS, CHAdeMO and Tesla. So we already live in a world of multiple connectors and remain committed to serving all EVs. Tests will be integrating NACS connected into the EVgo network as soon as they’re available and have gone through appropriate reliability and safety testing.

Let me turn to financing. To deliver on charging infrastructure’s long-term value opportunity, EVgo is deploying a holistic diversified approach to funding our capital needs. Historically, we have complemented our own investments with OEM partner funding, public grants and regulatory incentive programs. EVgo raised over $123 million in net proceeds through a primary equity offering in Q2. While EVgo was already projected to be well-capitalized through most of 2024, prior to the base, the equity raise bolstered our balance sheet and created runway to pursue a rapidly expanding set of value creating charging investments well into 2025. For 2023, we expect that most EVgo owned stalls that will be energized are being constructed under our General Motors agreement.

Under this $97 million program, GM K pays EVgo approximately $33,000 per stall shortly after the stall is operational. This additional source of capital to EVgo contributes roughly 25% of the capital build cost for GM stalls. We are expecting to build roughly 700 GM stalls this year, which would amount to $23 million in cash funding. And as we’ve outlined in previous calls, EVgo has a long history of applying for winning and building charging cells that receive a variety of public, private incentives. Recently, we’ve highlighted $10 million of Utility Make-Ready Funding and $7.3 million of CALeVIP funding awards, which are only a few examples of the many programs available to EVgo. Emblematic of the massive funding available, the federal government’s NEVI program just getting underway is a larger version of the state and local programs EVgo has been successful in securing funds from over the last decades.

As a reminder, NEVI funds will be distributed through 50 different state level programs and its passive precedent will take nine to 12 months to get from RFPs the selection of awardees. Following that, contracts are executed between State Department of Transportation and awardees, which too can be a multi-month process. And then, station construction can get underway. The fund is typically reimbursed to awardees after construction is complete and stations are energized. All this said, EVgo’s combination of market leadership, grant application experience and track record of being a good partner to government policymakers positions us well for securing NEVI Grant and we are off to a good start. EVgo and our eXtend partners were awarded $13.8 million for twenty sites under the Ohio NEVI program winning.

75% of the awards in that state’s first round. This was a tremendous success for our operations, grants, network planning and public policy teams. Several States, including Colorado, and Pennsylvania are reviewing NEVI applications right now and are expected to announce awardees in the coming months. Numerous others, including Virginia, Georgia, Oklahoma, Indiana and Michigan are earlier in the process with requests for proposals or qualifications currently open, suggesting projects could start sometime in the first half of 2024 after contracts are signed. In terms of government tax credits, Section 30C of the IRS code, officially the alternative refueling property tax credit can offset up to 30% or $100,000 per stall of charging infrastructure costs.

And now has a provision allowing transferability of the credit to qualified and registered taxpaying entities. As such, 30C credits are considered when EVgo makes investment decisions on where to extend our network. We anticipate detailed guidance from the IRS before the end of 2023. Notably, diverse funding sources can be stacked, for example, assaulted as part of EVgo’s GM program received a $33,000 CapEx offset. In addition, some locations may be awarded NEVI Grants based on their corridor locations, as well as be eligible for a 30C credit. Availability of multiple funding sources extends the geographic footprint of stations that pass EVgo’s investment hurdles and makes those locations more profitable, a genuine accelerant to EVgo’s business.

With billions of dollars of funding support becoming available from federal and state governments we’re excited to put more capital to work to increase shareholder value. And now, I’d like to turn the call over to Dennis, EVgo’s world-class COO to highlight some of the key elements of the growth engine we’ve built at EVgo.

Dennis Kish: Thank you, Cathy. Since I started at EVgo just over 18 months ago, we’ve been continuously expanding our team’s ability to build a best-in-class charging network. EVgo has created a growth engine that can scale up to meet fast-charging demand and we had our best quarter ever. Just now with revenue growth of 457% and throughput growth of 147%, compared to a year ago we also commissioned 210 stalls in the quarter and are at 2500, operational stalls today. Let me set the table by describing what we know definitively will bring customers to our network. EV drivers value three things the most. First, having lots of stalls at a site, so they never have to wait; second, having fast chargers available, so they can fuel up quickly; and third having a reliable charging solution that works right on the first try.

I’ll cover our progress in all three areas and begin with an update on EVgo’s typical station configuration. As Cathy mentioned, we’ve identified thousands of value creating new locations within our portfolio, partner network for future station builds. We currently target a minimum station size of six stalls, and we aim for eight to ten stalls if the site host has space available. We’re deploying ultra-fast 350 kilowatt chargers in locations that are typically near great amenities such as shopping, dining, and convenience stores. In certain locations, EVgo will soon be adding canopies as well as poultry charging for large trucks. Across the entire network, by the end of 2023, we expect to have approximately 30% more stalls per site, and 50% higher maximum power per site than we did at the end of 2022.

These station configuration update yield several important customer benefits, including faster charges, less likelihood of waiting and higher up time. Generally, across the development cycle, we are beginning to see timetables improving. EVgo’s supply chain is operating efficiently. We are managing our hardware suppliers well, with long-term contracts in place with rolling forecasts, so our partners can manage their supply chain to meet EVgo’s needs. Construction lead times are relatively flat, which is expected, given the fact that we are now building larger sites. Local government permitting is generally getting faster as these authorities gain experience and familiarity with fast charging infrastructure deployments. Utilities remain the longest pole in the tent.

A combination of long lead times for switchgear and transformers, along with internal resource demands for wholesale electrification is slowing many utilities. EVgo is working closely at the most senior levels with our utility partners, so they understand our project pipeline and how they can support our efforts to improve energization. We are sharing site-specific load roadmaps that are based on our network plan and that has resulted in a higher total number of stalls being energized this quarter than last. One pilot program that will be launched this year has this particularly excited. It enables us to perform more tasks in parallel with the utility and the early results show a 40% reduction in energization lead times. In addition to building the rapid growth engine for tech-enabled infrastructure deployment, we’re relentlessly focused on enhancing the customer experience.

Last year, we announced the EVgo ReNew program, a continuous improvement effort which builds on our regular maintenance program with a robust plan to upgrade or in some cases retire charging station. In 2023, we expect to renew hundreds of stalls and are on track to meet our goals. Building on Cathy’s comments about integrating NACS connectors into our network, we will use the ReNew program lens to evaluate which stalls to retrofit with NACS. As EV technologies advance and the number of EV models grows, we remain committed to deploying equipment and software that will deliver the optimal customer experience and an efficient use of capital. Internally, we track an important metric, we call One and Done, which is a percentage of time a customer has a successful charging experience within a reasonable time window on their first try.

It’s a success metric as opposed to an availability metric meaning that it attracts all often the customer gets what they came for, a completed charge. We are aiming to achieve one-and-done success rates of over 95% and have already improved six percentage points this year. With literally hundreds of thousands of charging sessions a month, charging attempts can be unsuccessful for a variety of reasons associated with the vehicle, the charger, the driver, or connections between any of those three. At EVgo, even if the chargers themselves aren’t the culprits of an unsuccessful charge attempt, we view it as our responsibility to create a seamless charging experience for our customers. The good news is that over the past four months, EVgo’s one and done Tiger team has made excellent progress in identifying and running to ground key causes of unsuccessful charge attempts.

On the charger side, we recently identified two software bugs that were causing charging issues for customers and promptly rolled out updates. And we’re collaborating with our OEM partners to ensure that updates they’re making to their EVs and software work with our charges. EVgo’s innovation lab and satellite locations at OEM facilities that come in handy on this front. In terms of driver education, EVgo recently highlighted a step-by-step charging tutorial in our online video series Charge Talk to help new EVgo drivers feel confident pulling up to a public charging station. It turns out that a sizable number of first-time EV drivers don’t realize that the first step to EVgo charging is to plug in the connector, because this order of operation is opposite of what we all learn to do when we went to a gas station.

EVgo won’t rest easy until we identify and solve every technical EV charger or driver education problem that might stand in the way of reaching 100% one-and-done success. I’ve spent my career leading complex operations efforts across the touch base and I can say unequivocally that at EVgo, we have built a growth engine with the processes in place to improve efficiency while delivering value to all of our stakeholders. With our relentless focus on advancing first mover technology, superior operations and customer experience, complemented by a backdrop of a rising sectorial tide, EVgo is poised for strong growth going forward. With that, I’ll turn the call over to Stephanie to discuss our quarterly financial results.

Stephanie Lee: Thank you, Dennis. As Cathy and Dennis mentioned, EVgo reported record results for the second quarter of 2023 demonstrating the continued strength of our business and our strategy. As a company, we are leaning into the incredible opportunity ahead of us to meet the demand that we believe is coming. We grew revenues across our core revenue streams during the second quarter. Second quarter revenue of $50.6 million grew nearly 5x year-over-year and nearly doubled from the prior quarter. On a year-to-date basis, revenue in 2023 has already surpassed the revenue we generated in the entirety of 2022. The significant increase in revenue was driven by our EVgo eXtend contract with Pilot Flying J in partnership with GM, as well as our growing retail, commercial, and OEM charging revenues.

eXtend revenue was $33.3 million in the second quarter with a vast majority of this exceptional revenue tied to hardware sales to PSJ and to a lesser extent, the construction of PSJ sites. Revenue recognized for PSJ hardware Sales is expected to be minimal in Q3 and potentially Q4 as we await the availability of BABA compliant chargers. As a reminder, there are no BABA compliant 350 kilowatt chargers currently being manufactured in the US and our suppliers are working hard to complete construction of their US facilities. BABA compliant chargers must also be fully certified and tested before products can begin shipping. Adjusted gross margin was 25.4% in the second quarter of 2023, which was consistent with the prior quarter. When compared to 37.3% in the second quarter of 2022, the year-over-year change was attributable to a lower mix of high margin regulatory credit revenues in Q2 of 2023.

Adjusted G&A as a percentage of revenue improved from 256% in Q2 of 2022 to 46% in Q2 of 2023 illustrating the leverage, EVgo continues to realize from its existing network and ongoing investments in infrastructure, people, and processes. Adjusted EBITDA negative $10.6 million in Q2 2023 versus negative $19 .8 million in Q2 2022 reflecting the flow-through of the revenue growth. During the second quarter, cash, cash equivalents and restricted cash grew to $257.4 million as of June 30th. This includes $5.7 million of net proceeds raised under our ATM program followed by an additional $123.4 million of net proceeds, under our equity offering completed during the second quarter of 2023. We added approximately 210 new stalls to our network during the second quarter.

And stalls in operation, or under construction were approximately 3,200 as of June 30th. As expected, we reduced our CapEx spending by nearly half from the previous quarter with net CapEx of $32.6 million. We purchased most of our equipment needed for 2023 stall deployments in the first quarter of this year and CapEx for the third quarter of 2023 is expected to remain lower as a result. CapEx will begin to ramp back up in the fourth quarter of 2023, as we begin mobilization for stalls expected to be operationalized in the early parts of 2024. Overall, CapEx for 2023 is expected to be lower than CapEx for the prior year. We will continue to remain agile in our supply chain and capacity planning to ensure that we can pivot appropriately in a responsive to the ever-changing regulatory landscape, including BABA, NEVI opportunities and NACS, while continuing to capitalize on our position of strengths and grow our stall base in a financially disciplined way to meet the ever-growing demand.

Moving on to our full year 2023 guidance. EVgo was updating our full year revenue guidance to a range of $120 million to $150 million. Charging revenue accounted for 25% of total consolidated revenue for the second quarter of 2023. We anticipate sequential quarterly growth in our charging revenue in the third and fourth quarters, as we continue to expect quarter-over-quarter and year-over-year throughput growth and increases in our total customer accounts. eXtend revenue accounted for 66% of total consolidated revenue for the second quarter of 2023. The vast majority of the eXtend revenues generated in the first half of 2023 were related to equipment sales to PSJ and we expect that eXtend revenue for the second half of 2023 will be predominantly comprised of construction-related revenues.

Equipment sales to PSJ for BABA compliant chargers may not materialize to any significant degree until 2024 although our suppliers continue to make good progress on the build out of their US manufacturing facilities. Our guidance assumes some BABA equipment sales to PSJ in the second half of 2023. EVgo was updating our full year adjusted EBITDA guidance to a range of negative $78 million to negative $68 million. EVgo will be making additional investments in the growth engine, we’ve created, including dedicated fleet hubs, eXtend, PlugShare and ReNew in the second half of 2023. We continue to expect to have a total of 3,400 to 4,000 DC fast charging stalls in operation or under construction by the end of 2023. As a reminder, this metric includes PSJ stalls.

With this, I will turn the call over to the operator for questions.

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Q&A Session

Operator: [Operator Instructions] Our first question comes from the line of James West – Evercore ISI. Please go ahead.

James West : Hey, good afternoon, everybody.

Cathy Zoi: Hey, James.

James West : And Cathy, congratulations on a great run at EVgo and all the things you’ve done for the company. Happy to be so early missed, but it sounds like you feel pretty good about Badar taking over. So, congratulations to Dan as well, congrats to you on a very successful run as CEO.

Cathy Zoi: Thank you so much. It’s been a joy.

James West : I guess, for my question, I’m really interested in this inflection point that’s happening with respect to throughput versus stall growth, because it seems like it’s ramping up really nicely here, which will be – I had always expected with now it’s kind of unfolding, it’s probably a function of a lot of factors, but is it mostly new EV models that are coming to the market that are maybe non-Tesla. Is it the customer experience is improving and say you had more repeat customers? What do you think is the main thing that’s driving this? Or is it just clearly more cars on the road?

Cathy Zoi: Well, I think we should hire you James. It is actually all of those things. I mean, let me – we look at this with the light, as well, so, yes, absolutely what we are seeing is more EVs, the compounding effect as we talked about before is those EVs that are coming to EVgo ar more powerful. They’ve got bigger batteries and in fact, and then the ability to charge even faster. So, throughput goes up for every sort of 15 minutes. You’re getting your pumping through more electricity and we’ve got – we’ve got increased utilization because is that high mileage drivers coming on to the network. And I think that one of the things that we’re kind of excited about is the possibility that we’re seeing, even folks with garages, it looks like they’re coming to charge at our fast-charging stations. So, all of this for us is, it’s just like, it’s like our thesis is great, but even better than we might have thought.

James West : Great. Got it. Thanks Cathy.

Cathy Zoi: Thank you.

Operator: Our next question comes from the line of Chris Pierce from Needham. Please go ahead.

Chris Pierce: Hey, good afternoon. How are you today? I was wondering if you could just give me guidance on where could the upper bound of utilization go in the near term and the medium term. I know you guys were sharing more in the past couple of quarters. I’m just trying to get a sense of, I mean, I really have no idea how to even think about it.

Cathy Zoi: No, Chris, it’s a great question. So there’s – we model it with it what we call an equilibrium utilization. So when we sort of do our math on is a station going pencil to our double-digit returns, we basically sort of tap it in like kind of a 20% – between 20%, 25%, just because we feel like, if it’s that good that there’s going to be other stations that will come into the market. So we model conservatively. With that said, we regularly have utilization at stations that is way higher than that. I mean, we’ve got, we’ve got some stations on the network right now that are over 50% utilization. We’ve had – during different time periods where we had intense Rideshare usage, on certain locations, we were up in the 60s than 50s.

So, it’s – what we’re doing to actually give us even more runway for that is adding bells and whistles like being able to make reservations, right. Special like super off-peak rates for Rideshare. All of those like, sort of tools, software tools that you add on to the basic infrastructure will give us an ability to actually achieve utilization levels far greater than what we actually model when we do our underwriting. So, I in the short, I don’t know how to answer it to you to model realistically. What we do is we model conservatively and then, we surpass our whole expectations when we see it on the network.

Chris Pierce: Okay. And then, are you, I mean, is it – are we miles away from competitor experts in a DC fast charger and do you see lower utilization at your – I just want to get a sense of how much runway in terms of the cars coming on the network for chargers going on? Let’s say, is that something that you build on your model as well?