Ladies and gentlemen, good afternoon. My name is Lisa, and I'll be your conference operator for today's call. At this time, I would like to welcome everyone to the ChargePoint Fourth Quarter Fiscal 2023 Earnings Conference Call and Webcast. All participants' lines have been placed in listen-only to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. I would now like to turn the call over to Patrick Hamer, ChargePoint's Vice President of Capital Markets and Investor Relations. Patrick, please go ahead. Good afternoon, and thank you for joining us on today's conference call to discuss ChargePoint's fourth quarter and full fiscal 2023 earnings results. This call is being webcast and can be accessed on the Investors section of our website at investors.chargepoint.com. With me on today's call are Pasquale Romano, our Chief Executive Officer, and Rex Jackson, our Chief Financial Officer. This afternoon, we issued our press release announcing results for the quarter and full year ended January 31st, 2023, which can also be found on our website. We'd like to remind you that during the conference call, management will be making forward-looking statements, including our outlook for the first quarter of fiscal 2024. These forward-looking statements involve risks and uncertainties, many of which are beyond our control and could cause actual results to differ materially from our expectations. These forward-looking statements apply as of today, we undertake no obligation to update these statements after the call. For a more detailed description of certain factors that could cause actual results to differ, please refer to our Form 10-Q filed with the SEC on December 8, 2022, and our earnings release posted today on our website and filed with the SEC on Form 8-K. Also, please note that we use certain non-GAAP financial measures on this call, which we reconcile to GAAP in our earnings release for certain historical periods in the investor presentation posted on the Investors section of our website. Finally, we'll be posting the transcript of this call to our investor relations website under the Quarterly Results section. With that, I'll turn the call over to Pasquale. Thank you, Patrick, and thanks to everyone for joining us today. Yesterday marked our second anniversary of being a public company. I'd like to start by recognizing the team here at ChargePoint that has worked tirelessly to continue to evolve the company to fulfill the enormous role we play in the energy transition. Before I get into a bit of retrospective on the full year and what the road ahead holds for us, I'll review the fourth quarter results for fiscal 2023. Our fourth quarter grew 93% year-on-year and 22% sequentially, making another record quarterly revenue level for the company while improving non-GAAP margins by three points to 23%, delivering on our expectations set on our last call that we would sequentially improve gross margin. On that same call, we effectively raised the midpoint of our full year guidance by $5 million. The revenue results for the full year were slightly below the original guidance midpoint and 2.5% below the revised guidance midpoint. Fourth quarter revenue results were below the guidance range and 7% short of the midpoint. This was due to a combination of special circumstances. The first is a decrease in North American commercial demand during the month of December. The second, while overall supply chain limitations have eased, they persist for certain hardware products. Lastly, we just missed shipment cut-offs for some customers that caused a larger gap between billings and revenue than historical norms. To put that in perspective, the full year revenue was $468 million. Our business grew 94% this year versus last and over 90% year-on-year each quarter. We managed operating expenses through the year to achieve the improving operating leverage you see. This is foundational to becoming cash flow positive in calendar 2024. We are exceptionally proud of crossing through an annualized subscription revenue benchmark of $100 million. We also demonstrated growth in fleet as a major vertical globally in our European business across all verticals. Both of these outpaced the 94% growth rate of the company to gain ground as a percentage of overall revenue. A good example of our progress in fleet and the power of our ecosystem is the recent announcement of the United States Postal Service award with our distribution partner, Rexel. Partnerships like these are critical pieces of our differentiated business model. In the fourth quarter, over 70% of billings were through our channel partners, consistent with historical results. Even with limitations on vehicle supply in the vertical, fleet is already a significant component of our revenue and a coiled spring when the vehicles are readily available. This is an essential part of our growth strategy. Participating in nearly every vertical of EV charging in both Europe and North America not only fuels our growth, but also provides resilience in the face of short-term emphasis shift across verticals and geographies. We benefited from this in COVID years and expect this diversity to be an asset as the market continues to develop for years to come. Let me give you a sense of where we have been this past year to help you gauge how well we are positioned for the future. We operate at the center of an expanding ecosystem that's highly invested in the electrification of mobility. We are now seeing that investment accelerate from those force multipliers. This indicates that the ecosystem, not just the auto industry, is past the point of no return. Some examples. ChargePoint now has over 12 automotive partnerships live where ChargePoint's cloud service aggregates access to all major public charging networks in Europe and North America via the OEM's in-dash system or companion app. Partners added this year include Lexus, Mazda, Toyota, and Fisker this year. Additionally, many auto OEMs offer our ChargePoint home charger and recommend us to their dealers for their charging needs. We added numerous fleet OEMs as partners as well. We continue to work with the iOS and Android platforms, as well as the native Google car experience. We added UTA, a leading European fuel card provider, to our long list of payment partners. We added Stem and other partners to enable charging to be integrated into broader site-wide energy management. We continue to grow our channel partner network and launched our mobile application for installers as our first step in creating an education and support platform for these key players. We continue to work with governments in North America and Europe to shape policy and programs such as NEVI to remove barriers and ensure a vibrant and consistent charging market. Lastly, we announced partnerships with Volvo and Starbucks, as well as Mercedes-Benz and MN8 Energy to enable great brands serving the 30-minute retail economy with EV charging to create a fantastic road trip experience for EV drivers. Turning to network, general customer, and environmental statistics, we finished the quarter with over 225,000 active ports under management, including over 18,900 DC ports, with just under a third of our overall ports in Europe. We also provided our drivers access to over 465,000 roaming ports with over 445,000 of those ports in Europe, significantly strengthening our EU offerings for site hosts. We now call 80% of the 2021 Fortune 50 and 55% of the 2021 Fortune 500 as customers, and over 70% of billings from existing customers consistent with historical norms and our land and expand strategy. As of the end of the quarter, we estimate that our network has now fueled approximately 5.6 billion electric miles, avoiding approximately 224 million cumulative gallons of gasoline and over 1 million metric tons of greenhouse gas emissions. While we are facing many of the same headwinds as the rest of the space, the momentum of the ecosystem in which we operate and our differentiated business model are not only driving the near term results we've seen, but position us to capitalize on what is clearly an inevitable long-term growth cycle. I'm proud of the ChargePoint team and our partners who made this year possible. Together, we are uniquely positioned to pursue this remarkable market opportunity. I'm confident we are on the right trajectory heading into this year. Rex, over to you. Thanks, Pasquale. As a reminder, please see our earnings release where we reconcile our non-GAAP results to GAAP. Our principal exclusions are stock-based compensation, amortization of intangible assets, and certain costs related to restructuring and to acquisitions. We continue to report revenue along three lines: network charging systems, subscriptions, and other. Network charging systems represents our connected hardware. Subscriptions include our cloud services connecting that hardware. Our Assure warranties and our ChargePoint as a Service offerings, where we bundle our solutions into recurring subscriptions. Other consists of energy credits, professional services, and certain non-material revenue items. Moving to results, fourth quarter revenue was strong at $153 million, up 93% year-over-year and 22% sequentially, but below our previously announced guidance range of $160 million-$170 million, as Pasquale noted. The shortfall was principally due to supply issues with our DC product lines, as availability was better, but not, still not sufficient to hit the significant ramp from the third quarter to the fourth quarter. A lack of linearity that forced shipments too late in the quarter to meet our re-revenue cutoff criteria and softer North American commercial demand than expected also contributed. Network charging systems at $122 million was 80% of fourth quarter revenue, up 109% year-over-year and 25% sequentially. Subscription revenue at $26 million was 17% of total revenue, in line with its third quarter percentage contribution, up 50% year-over-year and 19% sequentially. Importantly, as Pat mentioned, this quarter we hit a significant milestone of $100 million in annual run rate for this revenue line. Our deferred revenue from subscriptions representing future recurring revenue from existing customer commitments and payments continued to grow nicely, finishing the quarter at $199 million, up from $175 million at the end of the third quarter. Other revenue at $5 million and 3% of total revenue increased 37% year-over-year, was down 22% sequentially, largely due to decreased values of LCFS credits. Turning to verticals, we continue to report them from a billings perspective, which approximates the revenue split. Fourth quarter billings percentages were commercial 69%, fleet 19%, residential 11%, and other at less than 1%, representing a several point gain for our fleet business versus last year. From a geographic perspective, fourth quarter North America revenue was 86%. Europe was 14% as our European business continues to expand. In the fourth quarter, Europe delivered $22 million in revenue, growing 129% year-on-year and 26% sequentially. Turning to gross margin, non-GAAP gross margin for the fourth quarter was 23%, up from the third quarter at 20%. We were particularly pleased with this progress as cost reductions, higher ASPs, incrementally lower supply chain headwinds more than offset certain product transition costs. Specifically, we saw a 4-point drag from supply chain impact during the quarter. Non-GAAP operating expenses for the fourth quarter were $81 million, a year-on-year increase of 5% and a sequential increase of 2%. We continue to manage operating expenses carefully, with several key product releases achieved earlier in 2022, new product introduction costs were lower in the fourth quarter. Stock-based compensation in the fourth quarter was $26 million. Recall that our annual refresh cycle will be in our second fiscal quarter. Looking at cash and equivalents, we finished the quarter with $400 million, slightly higher than $398 million at the end of the third quarter, as we used our ATM or at-the-market offering program to raise $50 million in December. At the end of the fourth quarter, we had approximately 348 million shares outstanding. Turning to the year, annual revenue was $468 million, up 94% year-over-year. Network charging systems at $364 million, with 78% of total revenue for the year and up 109% year-over-year. Subscription revenue at $85 million was 18% of total revenue and up 59% year-over-year. Other represented the balance of 4%. Quickly covering verticals for the year, billings by vertical for the full year were commercial 69%, fleet 17%, residential 12%, and other 1%, like the fourth quarter reflecting particular strength in fleet. From a geographic perspective, full year revenue from North America was 84% and Europe was 16%, as Europe outpaces our overall growth rate. In fiscal 2023, our European business delivered $73 million in revenue, up 190% year-on-year. Turning to gross margin, non-GAAP gross margin for the year was 20%, down from 24% the previous year, principally due to a higher mix of DC products and to an approximately 5 percentage point supply chain and logistics impact. Non-GAAP operating expenses for the year were $324 million, a year-on-year increase of 35%, and managed well below our original targets for the year. Again, we are focused on delivering improved operating leverage, as non-GAAP operating expenses as a percentage of revenue went from 103% in the first quarter to 53% in the fourth quarter. To maintain our path to profitability, we responded to fiscal 2023 gross margin shortfalls by spending $35 million less in non-GAAP operating expenses relative to our original annual guidance and essentially kept quarterly non-GAAP OpEx flat each quarter of the year. Turning to guidance. As you all know, we guided for the full year last year on revenue, gross margin and operating expenses. We did this because we were a newly public company. Analyst estimates varied from our expectations too greatly across these measures. As we look at fiscal 2024, there's far less dispersion in external estimates. Accordingly, we believe annual guidance is not necessary this year. For the first quarter of fiscal 2024, we expect revenue to be $122 million-$132 million, a year-over-year increase of 56% at the midpoint. As you may recall, we typically see a seasonal drop in revenue from the fourth quarter to the first quarter as site hosts reload budgets and construction slows in the winter. However, keep in mind that in addition to being seasonally down from the fourth quarter, our first quarter historically contributes a significantly lower percentage of our annual revenue than quarters two through four. On other measures, we expect continued sequential improvement in gross margin this year as supply chain challenges continue to ease, our cost down efforts continue, and we get the benefit of volume on newer products. Regarding operating expenses, we expect leverage to be lower in the first quarter on lower revenue, to improve through the balance of the year and for the year. Advances in these metrics are key to our commitments to turning cash flow positive in the 4th quarter of 2024. Reaching this milestone next year with the North American EV passenger fleet estimated by BloombergNEF at under 5% and under 8% in Europe should position the company well early in the industry's growth cycle. Operator, let's move to Q&A. Thank you, sir. Ladies and gentlemen, if you have a question, please press star one on your telephone keypad. Once again, that is star one if you have a question. We'll go first to Colin Rusch, Oppenheimer. Thanks so much, guys. You know, I wanted to dig into the seasonality piece of this, 'cause we see this in a variety of industries. You know, what it looks like has happened in the first quarter of your fiscal year is you end up, you know, penciling out about 18%-20% of the annual revenue, and you're guiding to something a little bit north of 50% here. I guess, what can you say about, you know, the backlog and your visibility into the balance of the year and how you're thinking about the seasonal trajectory of revenue throughout the balance of the fiscal year? Hey, Colin. Thanks for the question. If you look at our Q1 outlook, as I said in the prepared remarks, it's a, you know, we're a growth company, right? You end up with a lower percentage in Q1 relative to the percentages for Qs two through four. You can extrapolate, I think successfully from there. You know, looking at, you know, looking at your models and our historical performance, I think that's something that you guys can do. From a backlog perspective, we actually did a nice job in Q4 of burning off some of the historical backlog. As we've said in prior quarters, we don't actually think that backlog is necessarily a virtue. We're not a backlog business particularly. Maybe that changes as fleet continues to become a broader part of the company's business. you know, we're a Land and Expand business, and we want product out the door and in people's hands and in the ground. you know, we're gonna burn that down and it was a nice, it was a nice backstop for Q4. It's a decent backstop for Q1. We're gonna work that off as we go through next year. Okay. Thanks so much. Just in terms of the texture of the client engagement right now, can you talk a little bit about what trends you're seeing in terms of incremental customers that you're adding into that land part of the land and expand strategy and the velocity of sales in terms of whether it's accelerating or decelerating with the existing customers as you get into the first part of this year? Colin, I think the easiest way to answer that is to point you at a statistic in our prepared remarks. The rebuy rate as a percentage of our revenue in the quarter was very consistent with historical norms, which indicates that the customer add rate is holding. There's no further color to add. I'll leave it there then, guys. Thanks so much. Up next, we'll hear from James West, Evercore ISI. Hey, good afternoon, guys. Rex, a question for you? Hey, Jay. Hey guys. Question for you, Rex, just to clarify, the revenue shortfall versus your guidance from for the quarter. If you had if those shipments had gone out, you know, in time, would you still have been within or even above your guidance range? It's not really revenue you're not gonna get, it's gonna come just at a different time. Yeah, no, that's, that's a good question, right? First thing I would say is, we put a lot of pressure on ourselves going from Q3 to Q4. You know, it was a big uptick and we accomplished most of it. I don't actually know the number, but I think the at the end of the quarter, the semi-trucks were sort of lined up around the block. We fundamentally just had a back end linearity issue of getting product either built from a DC standpoint 'cause we ran out of gas on that from a supply chain standpoint, and then on the trucks and time at the end of the quarter. You know, would we have made it? The short answer is yes. Okay. Okay. Got it. That's very helpful. Thanks. You know, a little question maybe for Pat is, with your customer and the customer engagement right now, do you have a sense for how much of your business is, you know, new customers putting up charging stations versus existing customers adding to their charging networks? Yeah, I mean, I think that's just a different way of asking the same question that Colin asked previously. about 30%. Sure. Of the quarter was new, it was new customers, and there was no deal size anomaly in that. Okay. If the revenue split percentage is very consistent with historical norms, the new customer add rate is consistent with that. Okay. Good stuff. All right. Thanks, guys. Our next question is Gabe Daoud, TD Cowen. Thank you. Hey, everybody. Good afternoon. Maybe just starting on the margin side, you obviously showed sequential improvement on a non-GAAP basis. Could you, Rex, maybe just give us a little bit of color on the trajectory there and maybe what some of the puts and takes are with respect to margin? Is it fair to assume maybe you continue to churn out like 100 basis point improvements sequentially throughout the rest of the year? Yeah. You know, if you look at the year, we were, you know, 17, 19, 20 and 23, non-GAAP, of course, through the year. We're hard at work in terms of driving that forward. The supply chain thing has been as high as six or seven, n ow it's more like four. That helps. We banged through the fact that mix shifted this year meaningfully in favor of DC, which is, one good from a resilience standpoint, but it's not the highest margin product that we do. We've managed to bang through that, and those margins have come up nicely. Our ops team delivering meaningful cost downs. Yeah. The price increases that we did last year. Mix makes it hard, but all these other factors are contributing to being able to add to the number. As you look to next year, you'll note I, you'll note in my prepared remarks, I gave AG we have lower revenue in Q1, therefore the operating expense leverage is gonna go the wrong way for Q1, but then it's go back the right way in Q2, Q3, Q4. I did say sequential improvement in gross margins throughout the year next year. You know, I wouldn't put a number on it. Like, is it one? Is it two? Don't know, or can't guide. I do think there's going to be a steady progression next year. Okay. Okay. Thanks, Rex. That's helpful. Maybe, Pasquale, just going to your comment around seeing a little bit less demand in December. I mean, is that just seasonality? Obviously been setting up a seasonally weak 1Q or like are you concerned at all with like a lot of your maybe tech giant customers in California kinda tightening the strings a bit on spending? Is that creeping into demand issues as well, or could you maybe help us think about that? Thanks, guys. I think the easiest way to give some overarching color on that is the revenue diversity has increased meaningfully over time in the company. I made some comments in my prepared remarks about the increased percentage on fleet and Europe overall as a percentage of revenue, and I'll remind you that it had to outpace what was already. A blistering year-over-year growth rate for the company. It's just fundamentally very hard for subsegments like that to overcome a growth rate in the core business, which is very mature in North America, and we managed to do that. What that's leading to, is we do see some softness in effectively businesses that have more of a discretionary stance with respect to, the timing around when they put in charging. I wanna emphasize this. Eventually, the attach rates prevail. In a set of verticals, more so in North America than in Europe, you are seeing some delays of ordering. We don't see it as a fundamental shift at all. We see it as effectively aligned with the macro and with the increased resilience in the business with respect to just the spread. There's no hotspots. If you look at the residential business, commercial fleet, then you look at the geographies, you've seen us make meaningful progress in all those fronts. While, you know, while there's definitely an economic overhang in a couple of verticals, I'm really very pleased that the business doesn't have any significant overweights, because if that were the case, I would comment otherwise. Our next question comes from Bill Peterson, JP Morgan. Yeah. Hi, thanks for taking the questions, apologize for the background noise. I wanted to ask what your thoughts were around Tesla opening up its network. I would think that it wouldn't have a lot of impact on what. You talked about the verticals. You just said, like, home, fleet, work, areas like Level 2 for front of a store or restaurant. I wouldn't think there would be really any impact. Maybe large retail locations and maybe some DC fast. Just trying to understand the threat of Tesla or maybe other car companies that have their own networks. Of course, you are a subset yourselves. In terms of the competitive environment, how could that play out? Yeah. Yeah. No, I get the question often. In fact, I think I've got it on several previous earnings calls. The overarching response to that is the fast charge market in the passenger car sector serves a very narrow use case. It's for when you're driving beyond your battery range. It is not the significant driver for our revenue. Now, that's not me making any excuses or saying that you're right on Tesla opening up their network either. We're also seeing now tremendous sudden attention from what we refer to as players in the 30-minute retail economy that traditionally serve people on road trips that now want to embrace because the broader EV market is has shown up. It's not one OEM now. It's a multiplicity of OEMs. They're all moving in the right direction, with electrifying their offerings. In fact, completely disinvesting in their ICE cars. That's given the players in the 30-minute retail economy a lot of confidence that they can start to move the ball down the field with respect to investments, at their own properties. We see this as a massive opportunity with respect to placing fast chargers along with partners. If you see how Mercedes-Benz and Volvo, two announcements we made this year, have worked into a 30-minute retail economy, sort of aligned, network announcement, we think that's gonna continue. Yeah, thanks for the color there. You liken the fleet opportunity to a, you know, coiled spring, and, you know, lack of vehicles, and we've talked about this. You know, are you seeing any signs that this should accelerate through the year? I guess, I know it's already a meaningful part of your business, but how should we think about your fleet opportunity as this spring uncoils? How you should think about fleet is that it's more land than expand right now. I mean, honestly, it doesn't have the expansion rate within customers that we've won that the more granular commercial business has because passenger cars are increasing in diversity and availability from a lot of OEMs, while on the fleet side, we are severely vehicle limited, maybe with the exception of transit buses, but transit buses represent a very small, on a vehicle count basis, percentage of fleets globally. Hence the coiled spring analogy. If you're landing more than you're expanding, but the expanding has to follow, we're in good position when our customer base decides to actually when they can actually get vehicles and can expand. If you look at the announcement we just made with USPS, for example, you're starting to see the clouds break, so to speak, with respect to a very large fleet that's positioned across the United States, start to get commitments from vehicle manufacturers that they're gonna see those vehicles come in earnest. So as things like that start to happen, I think you're gonna see a much more balanced expand versus land mix, and it should result in an acceleration of revenue, even within our customer base. Up next, we'll hear from Kashy Harrison, Piper Sandler. Yeah. Good afternoon, everyone, and thank you for taking my questions. You know, just the first one for me. The liquidity position improved a few million of 400 in cash and short-term investments, $400 million. You mentioned the $50 million ATM offering. Could you speak to the driver behind the utilization of the ATM in December, just given that you already had a pretty strong liquidity position before that? Maybe just talk about how we should be thinking about, like strategically, the strategy behind the ATM in the future. As I mentioned, yes, we definitely capped the ATM in December for $50 million. One of the things that is, you know, paramount for this company is we have a strong balance sheet, and we want to keep it that way. When you map that to what has been and, we hope, continues to be a very strong growth rate, you know, we need to be able to support the business. The thing that I would focus you on as we've talked about our path to profitability, the burn that you see, call it adjusted EBITDA, call it whatever you want to call it, that's gonna decline meaningfully over time over the next year or two 'cause getting to zero across the cover is something that's super important. I think that the need to address that will decline over time as those metrics get better. The bottom line is we just need to maintain a strong balance sheet and I think we have the best in the industry, and we need to stay there. Bottom line from a would we use it again, it's opportunistic. It's based on, you know, price and circumstances and timing and everything else. We're just gonna keep an eye on it. Okay. Fair, fair enough. Then just my follow-up question. You know, as you, as you pointed out, I think, you know, both of you pointed out in the prepared remarks, you effectively held the non-GAAP OpEx flat all year at, you know, roughly $80 million. You know, as a percentage of sales down to 50% from 100% earlier in the year. Can you talk about your operating expense strategy for 2020, calendar 2023 as well? Should we expect flattish OpEx again? Or should we expect, you know, a little bit of an uplift as, you know, the business is growing and there's also, you know, wage inflation? Just some thoughts on OpEx would be great. Yeah. Yeah. You sort of answered your own question. Yes, yes, there will be a uptick in Q1. You know, the combination of an uptick in Q1 relative to Q4 and the fact that we're seasonally lower on revenue is gonna make our operating expense leverage number go the wrong way for the first time in three or four quarters. The drivers are exactly what you just said. It's, you know, we've got our annual raise cycle is now. We'll have the full impact in Q1 of new hires in Q4. Those are the main components that'll drive it up a bit. What you'll see, there's sort of this uptick in Q1, and it doesn't keep doing that Q2, Q3, Q4. It's a, it's a very. Our view currently is a very, very modest series of increases throughout the year. Think of an uptick in Q1 and, you know, slowly higher the rest of the year. We will now hear from David Kelley, Jefferies. Hey, good afternoon, guys. I was hoping maybe to start, you could update us on momentum in Europe. You delivered really meaningful growth in fiscal 2023, and the market's coming off of a really robust EV penetration ramp last year. How are you thinking about the regional opportunity across the pond in 2024? Think about it the same way we think about the opportunity in North America, frankly. It's driven by, as you said, the differential is driven a little bit by a differential in car penetration from a new car sales perspective. Our strategy is virtually identical in Europe as it is in North America with respect to product line offering, business model, et cetera. I'll just remind you that we've said on many earnings calls that at the root of our forecasting and modeling, it's all factored off of new car projections, net new vehicles in the install base in the markets we serve. You had a kind of sub-question in there about the sub-regions. We are serving predominant markets in Europe. We're not in every country. The ones we're not in are small. We are, you know, we're just assuming that across the entire continent of Europe, we should be able to, you know, continue to be successful with the product line that we've been successful with on the previous year. There's no real difference. Okay. Got it. That's helpful. Then one quick follow-up on the supply chain situation. I guess, are you seeing improvement Q1 today relative to the fourth quarter? How should we think about that four-point margin headwind I think you referenced? Does that continue to lessen here into 2024? Thank you. Well, I mean, as we've said many times, no one has a perfect crystal ball on that one. Maintaining a vigilant stance with respect to supply chain is what we're doing. What we have said before and what I can repeat now based on our experience in Q4 is that the supply chain hotspots have narrowed considerably from the peak of the crisis. We have all our management bandwidth looking at a much smaller set of problems. You know, you may still have issues with availability of supply of a fewer number of components that still limit your build, but it's certainly a lot easier to put in mitigation strategies around right now, and we hope that over the year supply comes into alignment with demand. It's, it's too hard to call exactly what quarter we can say that all of it's gone. Stephen Gengaro from Stifel is up next. Thanks. Good afternoon, everybody. Two for me. The first, Rex, you mentioned how full how consensus numbers for the year seem relatively tight but you're not giving full year guidance. It sort of suggests to me that you think the consensus is reasonable by making that comment. Am I thinking about that correctly? I'm only chuckling just because I did not say consensus. What I said was, and this is, an important distinction, you know, analysts develop their models, and then they make judgments based on, "Well, I believe this. I think this is gonna be better. This is gonna be worse." They come to a conclusion, and we use the word dispersion. Last year, through no fault of their own, because we're a newly public company, and who could have modeled us from the outside last year? I wouldn't expect you guys to be able to do that. Everybody t he numbers were all over the place. I felt like we needed to help get it centered. I think the dialogue we've had with analysts over the last year and people's understanding of the business and their ability to form their own conclusions about what the outlook should be is vastly improved versus last year. I think having you be 100% the author of where you are is the right answer. Okay. No, that's fair. Thank you for the clarification. The other question I was curious if you could add some color to, is any thoughts on the NEVI program and your strategy and how you benefit from that over the next couple of years and how you're positioned there? Yeah, as we look at the NEVI program, not unlike how we've approached many other programs that are similar in color, it's a very corridor-oriented program. It's implemented by each state, so each state has its own take on the federal guidelines. We're quite used to that. Our policy team has been instrumental in commenting and helping to shape the program. It's, it offers what we think is a good platform for a broad range of our customers to be able to take advantage of it, and that's the key there, is the broad range of our customers. How we approach it, because we don't own and operate stations ourselves, and how we have approached similar programs in the past, so this is not a departure in approach at all, is we look into our current customer base and our potential future customer base. We do deep analysis. We have this capability internally, deep analysis on the state's requirements of where exactly they want chargers. We look at the correlation between available utility capacity, availability of partners that we have that are in good locations, spacing, et cetera, construction, you know, ease or lack thereof of construction. We put together a set of partners and jointly bid into the programs. In many cases, there are multiple bidders that are based on our technology. We've already seen that in Ohio, because those bids were already due, and we expect to see that on a go-forward basis. That's not unlike how we've accessed previous programs that, again, have had similar structure in the past. We're sort of the kind of the bones behind the organization of the collection of players, sites, technologies, et cetera, that kind of go into a bid. That's how we approach it. We think the formula works for us. We think what most importantly, the formula works for drivers. What we've advised states on and the federal government is that these things need to be in good locations. There has to be good alignment, not 100% across the board because you could have some rural locations where this statement isn't appropriate, but it needs to be well aligned with quick serve brands, both food services and retail, et cetera. We create a vibrant and an enjoyable experience for EV drivers because that enables more and more EV adoption to accelerate, which enables the balance of our business. We care about it deeply. We'll take our next question from Matt Summerville, D.A. Davidson. Thanks. Just to kind of follow up on, you know, Q4 to Q1 kind of seasonality and realizing we don't have a huge amount of historical data to kind of work with here. You know, Q4 to Q1 last year was actually higher. I know a little bit of that would have been acquisitive related. Prior year down slightly, maybe acquisitive nuance there too, maybe helping. You know, moving from, you know, the 153 or wherever it was in Q4 down to 127 at the midpoint. I guess I'm just having a hard time really understanding why there's roughly a $25 million sequential reduction there. Maybe a little more help. That's a fair question. The thing I would represent to you is if you go back in history with the company in like, you know, private land, we've been very consistent. Two things have been consistent. One, Q1 is lower than Q4. Last year was unusual. It was the first time I've been here for five years, first time that's happened. Q1 is always lighter. It varies in terms of percentage. I don't think this year's dip from Q4 to Q1 is, you know, extraordinary or surprising. It's just kind of what we're used to. We know the reasons for it, which we explained. Then, you know, as you know, we think of ourselves as a growth company. When you take Q1 and you know, look at that and go, "Okay, that's a baseline for the year, and how does it grow from there?" There's pretty decent information in our history that would allow you to extrapolate. I guess the net of it is I'm not concerned by Q1. When you kind of think about, you know, the portfolio today, the position of the balance sheet, how should we be thinking about, you know, M&A over the course of your fiscal 2024 and maybe what sort of, you know, technological or otherwise innovation, intellectual property you may be looking to add to the portfolio? Do you have things that are actionable in your pipeline? How should we be thinking about M&A over the next 12 months or so? Thank you. M&A. You think you're referring to mergers and acquisitions? Yeah. That. Yeah. Good. Yeah. I'm sorry to discern that. We heard, we have a partner called M&A, M and A, so I heard it that way. Please go ahead, Pat. Yeah. Understand. The way we think about acquisitions is we have a very full technology portfolio and lots of very good stuff in the pipeline. What I've commented on before is that due to the fact that our portfolio is well built out, with the exception of a few things that have not emerged yet that are, that are deep in R&D, we have the ability now to rebalance where we put the R&D resources to look at the scale technologies necessary to deal with streamlining customer onboarding, ongoing customer interaction, and the like. Remember, we have a very, very deep channel business. We have to have core product services technologies that enable that all the way through the channel. I made some references to that in my remarks. As a result, we don't see a deep need from an M&A perspective at all on a technology basis. The way we look at M&A opportunity is customer acquisition capabilities. If there's a good customer base with, you know, low liabilities on the install base and it's a practical integration, we would certainly consider it. That's really the lens that we're looking at it from. It is not a technology lens. Next up from Credit Suisse is Maheep Mandloi. Hey, good evening, good afternoon. Thanks for taking the questions here. Sorry if I missed this earlier, but hi, can you hear me? Yep. Perfect. Maybe just curious, if on gross margins, and sorry if I missed this earlier. Can you talk about how should we think about the gross margins in Q1 and through the year, specifically as you have this higher mix of DC? Should we expect this continued linear trend here? I think first thing is, as I said earlier, DC mix historically last year was a challenge, actually, we are improving things markedly on the DC front, it's gonna be less of a problem. That's everything from cost reductions, volume. There's our major new Express Plus platform is brand new and in very small volumes. There's a combination of things that are gonna make that better. We also think that the supply chain side of the picture is gonna continue to ease. I haven't put a number on it, I have said I think it's just gonna progress steadily throughout the year. I would be severely disappointed if it was flat or down in any given quarter. I think our outlook is quite positive that we can continue to drive the margins sequentially up this year, given a lot of the operational initiatives that we have in the company. Gotcha. Just one on the balance sheet. On Kashy's question, you talked about maintaining balance sheet at a healthy level is the prime driver here for the ATM. Just curious if you could characterize like how should we think about that. Is it like a minimum cash balance or some other metric to think about that? You know, it's honestly, I haven't fixed a number. You know, I don't mind the $400 million number, but I haven't fixed a number in stone on that. You know, as we grow the business, we may look at other, you know, financing opportunities. The nice thing is we expect our quarterly loss position to continue to decline, nicely between now and cash flow positive next year. There's a balance there. You know, if we continue to grow the company and it gets meaningfully bigger than it is today, you're gonna wanna have a decent balance sheet, and I kinda think that's where we are now. How we maintain that and what we do to maintain that is an open question, but, we're in a pretty good spot right now. We will take the next question from Oliver Huang, TPH. Good afternoon, everyone, and thanks for taking my question. Just had one sort of a multi-pronged question. Just wanted to try and get an update, with more details around progression of your build cycle over the past quarter. Is it something that still remains fairly back-end of the quarter-weighted, or is it something that's started to really smooth itself out given how there's a backlog to kind of get through? When thinking about the ability to manufacture these chargers at the factory, how close have you all progressed towards full utilization relative to what unconstrained capacity sits at today? I'll take the second part of that question first. We use external contract manufacturers as partners from a build perspective, so utilization of capacity is not a factor here. We use CMs that have substantially broad capacity capabilities, so access to capacity on the upside, is not an issue 'cause we'll see that need coming with adequate lead times. The excess capacity is not a factor in our financials from a factory perspective. With respect to build linearity, we have much better build linearity now. Our build linearity previously was largely driven not by factory issues, so to speak. It was driven mostly by supply chain and getting adequate parts, adequate, fully populated kits to assembly lines in a smooth manner. Because the supply chain crisis has certainly smoothed out, but I think equally importantly, our investments in supply chain management, not only in our own staff, but in process improvements with our CMs, that's dramatically improved the linearity of build. That's much less of a factor now with a few hotspots. I, the last comment I'll make is, while Rex commented on continued limitations, the limitation ceiling keeps rising. It's just that the growth rate has continued to rise. We maintain some limitations because we have to mitigate limitations on a few components that limit us, but we also have to exceed our growth rate. That's, I'll remind you, when you're doubling effectively, which is, you know, what we did year-over-year, and we had a very consistent growth rate quarter-over-quarter. If you look at, you know, a given quarter to the year prior, that's a huge issue. You have to overcome a growth rate and do better on top of that, which we think we're putting in all the mechanisms necessary to do it going into this year. Okay, that makes sense. Thanks for the time, guys. Thank you. We'll go next to Steven Fox, Fox Advisors. Hi. Good afternoon. I just had 1 question. After listening to the prepared remarks, I mean, you made a lot of progress on the ecosystem in the past year. With a lot of major names. I'm just curious why, at this point, not focus more on the expand piece of land and expand as opposed to adding smaller customers that, you know, on a timeline basis, maybe you do better with scaling established customers and also helping, you know, improve the margins, et cetera. I was just curious how you would react to that question. Thank you. It doesn't improve the margins because cost of sales is not a component in margins. And with, the expand piece is limited by, again, the attach rate to vehicles. We're expanding effectively with the net new vehicles in the serving sphere of our customers within any geography. You can't push them past the utilization boundary. They're not gonna lean in you know, they're not gonna we can't push the lean in to an arbitrary degree. Also, if you look at the dividend that pays forward, the new customers, the dividend that pays forward, we have an incredibly low churn rate on customers. That's been a historical asset for the company. Since we do wanna take we don't wanna stall our future growth, we're not gonna shift emphasis. We're gonna maintain the emphasis on a balance between new customer add and expansion in the similar proportions that we've had before. I will tell you that our channel sophistication is improving, you know, continuously. It's something we've invested in since the beginning of the company, and that should, over time, remove a lot of the pressure on both sides of that equation, both the land and the expand. The USPS deal was a good one. That was done in conjunction with one of our distribution partners, and it really helps on an ongoing basis to have partners that are co-investing in big deals like that. Great. That color's really helpful. I appreciate that. Thank you. We will now hear from Alex Vrabel, Bank of America. Hey, guys. Thanks for squeezing me in here. Just to, I guess, to follow up one more time on this sort of coiled spring idea or the difference between landing and expanding growth. I mean, I guess doubling that back into this idea of operating leverage, when we think about the trajectory here, you know, kind of later into the year, early into 2024 as you guys get closer to that cash inflection, is there, you know, I guess an expand element that sort of helps you out in the OpEx line? I guess I'm just sort of thinking like, you know, lower S&M per unit or however you wanna, you wanna think about that given, you know, sort of this dormant fleet story that's sort of waiting in the background, if you will. The way we think about the, as you refer to it's effectively the untapped potential in fleet because our customers are vehicle limited in fleet for the most part. As I've also mentioned before but in a different context, we can afford the investment in fleet because it has a lot of commonality with respect to the investment from an OpEx perspective and the balance of the verticals that we go after and the balance of the geographies. There are some fleet-specific features that we have to invest in, but for us it's incremental, very incremental. Even the same hardware platforms, sometimes different configuration, but the same hardware platforms. Where am I going with this? Operating leverage over the year we just closed, we think is pretty phenomenal because it is showing that the trajectory of the OpEx, that's everything from R&D to sales and marketing, G&A, everything is on a very different trajectory as we add revenue. We weren't putting the company in peril this year. In fact, we're making some very strategic investments to improve what we think is our long-term ability to have a great customer experience at even larger scale this year. We think that the continued things that you saw from a directional perspective in the year we just closed will continue through this year. Rex made one notable exception in that because the Q1 revenue is seasonally down for the company, you may see a small retreat in operating leverage only in that quarter, but it should return to normal increase in operating leverage or a similar one that you saw in the previous year. Got it. Very clear. Then just on, I guess, sort of the growth outlook generally, like is there anything that you know, you would sort of think about downstream beyond sort of, you know, the utilization rate or just sort of getting vehicles in people's hands that's constraining you guys today? I'm thinking about, you know, utility interconnection, anything that's sort of hampering your abilities, that's a little outside of your control that we would should be aware of? Thanks. The utility interconnect question is a very good one. It's hard to model because the utility interconnect delays certainly are there. They vary depending on the circumstances of you know, the site, right? How much spare capacity is there, and what are you trying to do with that site? What the way I think you should think about it is the active ports under management normalizes out the pipeline delay from initial order and shipment to actual installation and activation, which we do see variance. We do see a big variance. Because we have a long pipeline with effectively no air gaps, what you see show up today is the result of utility interconnect deadlines that are coming to an end, right, on projects that we effectively sold maybe six months ago in some instances. Then we can't actually ship the product until they actually need it, and it goes into the ground. Some amount of delay, and if you look at the new port add rate, you can kind of, sort of see the shadows of it. That delay is built into our numbers already. Everyone, at this time, there are no further questions. I'll hand the conference back to our speakers for any additional or closing remarks. Thanks for your time today. Ladies and gentlemen, that does conclude today's conference. Goodbye. Thank you all for your participation. You may now disconnect.