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 first quarter fiscal 2024 earnings conference call and webcast. All participant lines have been placed on a listen-only mode 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 first quarter fiscal 2024 earnings results. This call is being webcast and can be accessed on the investor 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 ended April 30, 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 second 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, and 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-K, filed with the SEC on April 3rd, 2023, 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 reconcile to GAAP in our earnings release and for certain historical periods in the investor presentations posted on the investor 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 it over to Pasquale. Thank you, Patrick. Thank you all for joining us today. We delivered a strong first quarter. Revenue was at the high end of our guidance range at $130 million, and non-GAAP gross margin sequentially improved two points to 25%. To put these results into perspective, we achieved a 59% year-over-year growth rate in the first quarter and had the second-largest quarter in ChargePoint's history. We did that while the EV install base in North America and Europe are still in single- digits, and the EV market is only at the beginning of a decades-long growth cycle. We also achieved this growth in the midst of a challenging macroeconomic environment. Diversification across verticals and geographies continues to contribute resilience to our business. While we saw less growth in North American, commercial, and residential than we would have liked, due to what we believe is a delay in discretionary purchases, we continue to see overall growth and margin improvement. Rex will address guidance for the second quarter, but just to give you a sense of the magnitude of the long-term opportunity ahead of us, the midpoint of that guidance would make Q2 the largest quarter in ChargePoint's history. You'll also hear Rex talk about non-GAAP Adjusted EBITDA. To give some context, we use non-GAAP Adjusted EBITDA as a key measure of the health of our business as we drive towards profitability, and as we disclose in our proxy statement filed last week, this metric is one of the two components of our annual management bonus program. Beneath the top-line results, we're continually improving our operations and investing for future scale. We've consistently improved gross margins while recovering from supply chain issues, making meaningful changes to the cost of our products, and optimizing our operations. As we scale, we're carefully managing our operating expenses while making the necessary investments in our support operations and internal business systems. We are committed to delivering dependable infrastructure to our customers, so drivers can find it, use it, and depend on it everywhere. Turning back to Q1, we saw two areas of particularly strong growth: Europe and fleet. For the first time in our history, Europe delivered over 20% of ChargePoint's quarterly revenue. Meanwhile, Q1 fleet billings more than doubled year-over-year, despite supply limitations on vehicles entering the segment relative to demand, and as a% of billings, fleet increased from Q4. We're encouraged to see continued resilience in these growth areas. Beyond the financials, we continue to focus on our products. We offer industry-leading hardware and software for nearly every fueling vertical. Our solutions help our customers deliver the kind of EV driver experience that will continue to accelerate EV adoption across North America and Europe. In brief, a better charging infrastructure delivers a better driver experience, which drives more value across the entire EV ecosystem. It's a positive feedback loop for growth that benefits ChargePoint, our partners, and EV drivers in the environment. We are betting on the continued changeover from fossil fuels to electric drive, regardless of OEM or vertical. As a result, we believe we are an index for the electrification of mobility. Before handing off to Rex, let me update you on a few key statistics to give you a little more color on our continued growth. On the network side, we give drivers and ecosystem partners access to approximately 745,000 EV ports in North America and Europe. 243,000 of these are active ports under management on the ChargePoint network, up from 225,000 ports last quarter, and we recently passed a milestone of over 500,000 roaming ports. These roaming ports are critical to delivering a world-class ecosystem to ChargePoint drivers, site host customers, and strategic partners such as OEMs and fuel card providers. Approximately 21,000 of the 243,000 ports on the ChargePoint network are DC fast charging, up from approximately 19,000 at the end of Q4, and approximately 1/3 of our overall ports are located in Europe. We count 76% of the 2022 Fortune 50 and 56% of the 2022 Fortune 500 as our customers. This reflects excellent penetration, given our land and expansion strategy, the stickiness of our solutions, and our strong rebuy rates. From an environmental perspective, as of the end of the quarter, we estimate that our network has fueled approximately 6.3 billion electric miles, avoiding approximately 252 million cumulative gallons of gasoline and over 1.25 million metric tons of greenhouse gas emissions. When you put all that together, it shows that despite the current economic environment, ChargePoint's growth continues. We've made significant progress against our long-term roadmap, ensuring that ChargePoint scales ahead of this remarkable market opportunity. We're running a highly differentiated business that is not CapEx intensive. As you'll hear from Rex, we're heading into the black while we turn the world green in the early innings of the EV transition. Rex, over to you for financials. Thanks, Pasquale. As reminders, please see our earnings release, where we reconcile our non-GAAP results to GAAP. Recall that we continue to report revenue along three lines: network charging systems, subscriptions, and other. Networked charging systems is our connected hardware. Subscriptions include our cloud services, connecting that hardware, our Assure warranties, and our ChargePoint as a Service offerings, where we bundle hardware, software, and warranty coverage into recurring subscriptions. Other consists of professional services and certain non-material revenue items. As Pasquale indicated, we had a solid Q1 with revenue of $130 million, up 59% year-on-year, above the midpoint of our previously announced guidance range of $122 million-$132 million. Down seasonally, as expected from Q4, Q1 was notably the company's second-largest quarter ever and a good start for the year when compared to Q1 contributions over the past two years. Network charging systems at $98 million, with 76% of Q1 revenue, down from $122 million and 80% in Q4 due to typical seasonality. Q1 revenue from network charging systems grew 65% year-on-year. Subscription revenue at $26 million was 20% of total revenue, up 49% year-on-year, up sequentially and again above the $100 million annual run rate we referenced in our last call. Our deferred revenue, which is future recurring subscription revenue from existing customer commitments and payments, continues to grow, finishing the quarter at $205 million, up from $199 million at the end of Q4. We're especially encouraged to see this continued growth in our recurring revenues in the very early days of what we believe is a decades-long EV adoption curve. Other revenue at $5 million and 4% of total revenue increased 20% year-over-year. Turning to verticals, first quarter billings percentages were commercial, 63%, fleet, 24%, residential, 11%, and other, 2%, reflecting a particularly strong performance in fleet. Commercial grew 44% year-over-year, while fleet was up 129%. Residential grew at 13% year-over-year and maintained its generally consistent billings percentage. From a geographic perspective, Q1 revenue from North America was 79% and Europe was 21%. As Pasquale mentioned, Europe continues to outpace North America on a percentage basis, up 70% year-over-year. Turning to gross margin, non-GAAP for Q1 was 25%, up sequentially from Q4's 23% and up 8 points from 17% in Q1 of last year. This improvement is primarily a combination of diminishing supply chain and logistics expense pressures, significant operational improvements, and better scale. We continue our considerable investment in our driver and host support infrastructure because we believe support and reliability are critical differentiators for both drivers and our customers. We expect continued improvement in non-GAAP gross margin this year. Non-GAAP operating expenses for Q1 were $85 million, a year-on-year increase of 2% and a sequential increase of 6%, primarily reflecting payroll taxes as well as annual compensation increases effective April first. As we look out to the rest of 2023, we will manage expenses carefully and expect to deliver improvements in operating leverage. As you may recall, in calendar 2020 and 2021, our OpEx, which reflects significant forward investments in our business, was at approximately 100% of our revenue. In 2022, we took that down to 53% in Q4 and 69% for the year. In Q1, we were at 66%, given revenue seasonality, but again, expect continued improvements this year, particularly in the second half. Given this trajectory, I'd also like to expand on Pasquale's comments regarding non-GAAP Adjusted EBITDA. We added this metric and the associated reconciliation today in our press release, with the goal of better illustrating our path to profitability. To calculate Adjusted EBITDA, we take our non-GAAP net income loss and add back interest, taxes, and depreciation. The depreciation component is low, thanks to our business model. Using this metric, Q1 non-GAAP Adjusted EBITDA was a loss of $49 million, a year-on-year improvement of 27%. We look to cut this loss further by approximately two-thirds by Q4 this year. Looking at cash, we finished the quarter with $314 million, down from $400 million last quarter. As in prior quarters, the primary driver of our negative cash flow is operating loss. In Q1, we also managed to break free from a number of supply chain issues and move our inventory solidly from raw materials and WIP, or work in progress, to finished goods, meaningfully increasing our inventory level, which helped us avoid leaving business on the table as we've been forced to do in recent quarters. This build helped us in Q1 and sets us up well for Q2 and Q3. Inventory will vary as we look forward, but we expect it will grow with business. We used our ATM very lightly in Q1, adding $18 million in cash through the program. We will evaluate the use of the ATM on a quarter-by-quarter basis and also continue to assess non-dilutive liquidity options. To close on a couple of other key figures, stock-based compensation in Q1 was $24 million, consistent with the past three quarters. Our annual compensation cycle includes equity. We expect our annual step-up in stock-based compensation in Q2 to be approximately $8 million and to be fairly constant for the ensuing three quarters. We had approximately 353 million shares outstanding as of April 30, 2023. Turning to guidance for the second quarter of fiscal 2024, we expect revenue to be $148 million-$158 million, up 41% year-on-year at the midpoint. Remain committed to being Adjusted EBITDA positive in Q4 of calendar 2024, and remain committed to being cash flow positive by then as well. In summary, we've achieved the growth we expected to achieve despite significant headwinds. We continue our march to profitability even while we invest in operational excellence at scale. Our differentiated business model is not CapEx intensive. Our Adjusted EBITDA metric, which we consider to be a strong indicator of the overall health of our business, gives us confidence in our trajectory. With that, I'll turn the call back to the operator for questions. Thank you. If you would like to ask a question on the phone lines today, you can press star one on your telephone keypad. If you would like to remove yourself from the queue, it's star one again. We ask, please limit yourself to one question to allow everyone an opportunity to ask a question. We'll take our first question from Gabe Daoud with Cowen. Hey, thanks, guys. Appreciate all the prepared remarks. Maybe, Pasquale, I just wanted to hit on the comment earlier in your prepared remarks, just about some of the commercial and residential weakness that you guys, noted. Just curious if you could give a bit more color on how that maybe snaps back as we progress through the rest of this year, and maybe, you know, what's kind of embedded in your own internal forecast? Hi, Gabe. It's a very simple answer, actually. The beauty of this market is that the utilization pressure sits there because EVs keep, you know, we keep converting the install base from fossil fuel to electric vehicle. Businesses right now, all businesses, commercial businesses that have a discretionary need for charging for their employees or their customers, can adjust timing to deal with the macroeconomic uncertainty. The need doesn't go away, but the optionality to delay addressing that need in some of our commercial customers exists. What I'll point you to, though, is something that we've commented on in previous earnings calls as we went through the pandemic. The mix in our business by vertical shifted pretty meaningfully during the pandemic because we went into an abrupt work-from-home situation. Other areas of the business, because we've been broadly placed across verticals and geos, other places in the business picked up the slack, so we didn't have to deal with a massive discontinuity financially. You're seeing that, I think, play out here again. We still, I think, turned in very aggressive growth on a quarter-to-quarter basis. Q1 this year to Q1 last year, it's a healthy, a healthy percentage step up. The geodiversity, especially given that Europe is now 20% of the business and is performing strongly. Fleet up 200% year-over-year, similar quarter, Q1 to Q1. It's just evidence that as the macroeconomic water balloon exerts its pressure on the different verticals, that we're diverse enough to take up the slack. You know, we're not, we're not in a position where we think the demand has gone away and that it's perished. We'll get it back as the macroeconomic situation clears up. Hope that answered it. Yeah, that's great, Pas. Thanks, Pasquale. Maybe as a follow-up, just about the mix shift or just the billings and the price momentum that you reported in fleet in particular. Could you maybe just give us a bit more color on where exactly you are seeing that strong growth and strong demand within the fleet? Is it last- mile logistics? Is it, I guess, on the light-duty vehicle side, just given how we're still vehicle- constrained on medium and heavy duty? But just curious, I guess, what can you say on fleet? What's really driving the momentum there? Is it also more fleet momentum in Europe versus the US, or is it fairly similar? Thanks, Gabe. It's easier to go backwards with your follow-up question. It's pretty balanced between Europe and North America. Fleets, as I said in my prepared remarks, it's vehicle-limited right now. If OEMs were producing vehicles in quantities to match demand, you'd see faster penetration and conversion from fossil fuel to electric. It's actually well aligned with a softer macro in that everyone's looking for cost savings. Obviously, and these are meaningful, you know, these vehicles are meaningful components of the cost structures of the businesses that they serve. What that's done is it's slanted, as I've mentioned, by the way, consistently in previous, in previous calls, it slants it to land, but not much expanse within a customer. That's, you know, I think just, you know, a good indicator for things to come in the future when that starts to uncoil. It's complicated, given that there's a bit of a dependency there on vehicle OEMs producing things at scale. One of the bright spots that I mentioned before regarding fleet is transit, because that's the most mature segment. We continue to see that segment do quite well. There has been no general shift in mix between the quarters that's materially worth reporting. Okay, great. That's helpful. Thanks, guys. I'll take the rest offline. We'll take our next question from Colin Rusch with Oppenheimer. Thanks so much, guys. You know, can you talk a little bit about the dynamics in the U.S. commercial market? Can you give us a bit more detail on what's happening with commercial property owners as they work through cost of capital changes, rental rates, and looking at upgrading amenities? You know, what the sales cycle looks like, conversations you're having with folks around when and kind of volume of deployments. Hey, Colin, the conversation's not any different now than it's been in the past. The commercial conversations tend to be a mixed bag of: Are you dealing with the tenant? Are you dealing with a property manager? Are you dealing with the landlord, or are you dealing with all of the above in combination? It really is situational, and that hasn't changed. You are seeing property developers and property managers take a more keen interest right now in charging as an amenity more broadly in their portfolio versus in hotspots driven more by tenant, kind of tenant activities. I think in general, because the, you know, the dominant situation there is return to office. As you've seen in, you know, many statistics that have been reported, we're moving back to a larger component of in-office, but we certainly haven't snapped back all the way. That's probably the biggest component in commercial shift, is if people aren't driving to the office, the workplace charging component will continue to basically move down proportionally to effectively the utilization in the parking lot at office buildings. Doesn't mean that there isn't charging going in, it just goes in proportional to the number of days folks are in the office. We'll also remind you, if you go in three days or you go in five, it generates the same amount of utilization pressure in the parking lot on the three days if they're synchronized. There's a lot of puts and takes there. I think as this continues, as it gets confused by a lot of other things that are going on in the macro as well. The complexity goes up. You know, we've got good visibility into it, and we're managing it closely. Excellent. That's super helpful. I've got two other things, just looking for an update, they may be a little bit disparate. You know, some of the permitting, streamlining efforts that are going on at state level and even at a national level, if you could just give us a sense of anything that you're tracking very closely there that could be meaningful for the business, and also, you know, the potential to consolidate some of these not, you know, these non-fully networked chargers, you know, whether it's in the U.S. or Europe, and how that opportunity is changing for you guys near term? Easier to take that one backwards. If you look at consolidation of non-network chargers, there's a lot of programs, I mean, not that, not that our revenue is primarily subsidy dependent, but almost all or all I can think of anyway, subsidy programs have a requirement for the charger to be managed, connected to some sort of network and meet some set of requirements, either, at a most basic level for reporting, but usually includes some energy management to give some benefit to the grid. What you should think about there is a lot of the unmanaged chargers that are out there will likely get replaced with managed chargers, because if they don't have the necessary communication and processing gear, it's easier to just tear them out. Most of the work, by the way, is in laying the electrical infrastructure leading up to the charger. That's a, that's a very cost-effective swap out. That's not something that we see as significant yet as a replacement cycle, only because the market is scaling so quickly, the growth sort of swamps it. You know, I would expect that those things would change out over time. With respect to permitting, I just want to point you to a couple of things in the prepared remarks. If you look at the total ports on our network in terms of activated and under management, and that means they've not only gone through full installation, but they've also gone through software activation. That means the customer's decided how they want to use it, all that sort of stuff. We went from 225,000 ports in Q4 to 243,000 ports. You can read the remarks, but, you know, that was spread pretty uniformly between DC and AC. What's interesting in that is the pipeline is already built into our numbers because that is not representative of the ports we sold last quarter. That's representative of the ports that we sold at some previous month or set of months that have gone through the construction and installation process and the activation process, which is not an instantaneous thing in time. You're seeing in the port growth rate, the shadow of the permitting delays print through. For the big stuff, right? The big corridor fast charging programs, a lot of the big fleet transit programs. Yeah, we see permitting delays continue to be a challenge for our customers, but again, that has been a challenge for our customers for a while. We absolutely would applaud any change in permit streamlining or utility interconnect streamlining, 'cause it will certainly help accelerate, it'll accelerate some of the customer's ability to add the necessary infrastructure. Headline, delays are built into our numbers, built into our guides, they're built into our numbers, they're built into everything that you're hearing from us. If we can make it go faster, it's upside. Just a reminder, everyone, please limit yourself to one question. We'll take our next question from James West with Evercore ISI. Hey, good afternoon, guys. Pas, good to Yeah, thanks. Hey, Pas. Thanks, Rex. wanted to ask about the announcement out of Tesla and Ford a couple of days ago, their alignment, the opening of the sort of their Supercharger network, and what your thoughts were around that? Is, I mean, is it a nothing burger? Is it something to be expected? Is it showing us that there's too few chargers out there? What's your take on that? That I could have bet that one of you would have asked that question. The shortest way I think to crystallize it in your mind is that Tesla has been an outsized player. Right now, they're still sitting around 70% market share in the United States in terms of vehicles in the install base. That Supercharger network has been around since the beginning of the time that we're in revenue, and if it weren't for Tesla on the road, our customers would have no reason to buy a ChargePoint charger because they're the dominant car there up to now, and they're generating effectively the utilization pressure in the parking lots that are causing across all our verticals, customers to want to buy our products and services. The net-net is, the Supercharger network, whatever effect it's having, is built into our numbers. Now with that said, with that said, our fast chargers in particular, because on the AC charger side, Tesla shipped with an AC adapter since the beginning of time. It's easy, it doesn't impair anything, so that's that there's literally no impact there. On the AC side, I mean, on the DC side, our chargers have modular cables and modular holsters. The ability for us to address, if the need arises, the ability in particular use cases, to add a direct Tesla cable versus using an adapter like people use today, is possible. We're now spending time obviously thinking about innovative ways to not have to increase what is a very expensive element, an extra cable on a charger, to be able to. Right Get around some of those problems. You know, stay tuned. We'll be pretty innovative there, but I don't read it as a bad thing for us long term at all. Got it. Okay. Thanks, Pas. We'll take our next question from Morgan Reid with Bank of America. Hi, everyone. Thanks for taking my question. Nicely done on the growth drivers in fleet in Europe. Just curious if you can maybe elaborate on how we should think about that strength through the rest of the year. Just wanting to understand how those two segments in particular are expected to scale through the year hereafter, some nice growth here in the first quarter. I would expect fleet to continue to be strong. These are very, these are customers that are electrifying for hard business reasons. There's no discretion in electrification. It's competitive in the long term for fleets, for most fleets, and then it, in the long term, drops their cost structure, and there's a long learning curve and optimization cycle, so they need to start it today to not have it be an impediment to their business in the long term. We expect that segment, regardless of the macroeconomic environment, to be very strong on a go-forward basis. Europe is ahead of the U.S. currently in EV adoption. We expect it to continue to be strong. There is a more consistent policy mandate across all of Europe, supporting the transition from electric drive to from fossil fuels to electric drive. Correspondingly, in the long term, we don't see any major difference between the U.S. and Europe. Remember, OEMs have to operate internationally, and supply chains and cost structures will shift favorably to EVs over the not-too-distant future. I think it's an inevitable conclusion that in both markets you'll see a conversion rate. Currently, Europe is, for all the reasons I mentioned, gonna continue to be, I think, very, very strong for the company. We would expect that we would see strong growth from that from that subvertical or sub-geo, I should say. Great. Thank you. Then also, can you just talk about how we should think about the OpEx discipline through the year? I know you've all talked about kind of scaling operating leverage towards the EBITDA positive inflection later this year. Just curious if you can kinda help quantify the moving pieces there as you look to continue scaling the top line, against still a very disciplined OpEx line. The short answer is we have a number in Q1, and we'd like to stay close to that number for each of the rest of the next three quarters of this year. Obviously, there'll be some variations. Last year, we were very consistent coming out of the gate and staying close to it. I think we're gonna try to operate within a pretty tight range. Great. I'll take the rest offline. Thanks. Thank you. Thanks, Morgan. We'll take our next question from Matt Summerville with D.A. Davidson. Thanks. First, just a question on gross margins, up 200 basis points sequentially. How should we expect that to kind of play out as we move through the year? Should we expect a similar kind of step function improvement quarter on quarter, something a bit more conservative to that? What are the main levers to gross margin improvement as we sit here, you know, for the balance of your fiscal 2024? I think that, as we've said, we expect continued improvements. I don't think anyone here would say that 25 is a place that we should be, you know, parking our electric vehicle. It needs to go up. Whether it goes up a point or two or whatever, quarter-on-quarter remains to be seen. It's very mixed dependent. I, you know, I'm confident that we're gonna head towards the numbers we've discussed before, towards the end of the year. I don't wanna peg it to a number, but it's gonna be better in Q4 than it is today. Expect it to continue to climb this year. With respect to the comment you made, Rex, towards the end of your prepared remarks, you think you can cut the EBITDA loss by roughly two-thirds between now and the fourth quarter. Say, going from, you know, $49 million to, say, $16 million or thereabout, is the entirety of that bridge just scale from the revenue growth you're expecting, or are there actual cost and expense cuts that are contemplated in there? Thank you. It's actually all of the above. Clearly, you know, grow the revenue line, which we hope to do consistent with what we've done in prior years, 'cause you start in Q1 and you end up in Q4, and Q4 is a lot better than Q1. Clearly, that helps. We expect gross margin to improve during the year. That definitely helps a lot. If we are disciplined on OpEx and keep that, you know, in flattish territory, you can make the math work pretty quickly. We'll take our next question from Mark Delaney with Goldman Sachs. Yes. Good afternoon. Thanks very much for taking my question. Something to better understand some of the supply chain dynamics. I guess in terms of the P&L impact and sticking to the gross margin theme first, you know, you guys have been talking about how much of a headwind the gross margin supply chain was. You know, I think at one point, it was sort of like 900 basis points of a headwind. Where does that stand as of this most recent quarter in terms of the impact? Then, you know, more broadly on supply chain, if you could speak around how you see that progressing, and do you think supply chain holds you back in terms of hitting your shipment targets for the balance of the year? Thanks. Thanks for the question, Mark. To start, the PPV/supply chain impact that we've been talking about is probably closer to five or six points per quarter. There's logistics charges. We could take it up another, you know, point or two, then we have had a couple of write-offs that we did last year that impacted us. I just wanna frame the percentage points there. It's really closer to five or six that are specifically supply chain. No question that that's gotten much better from a supply perspective. We really snapped through this quarter, and I was glad to see. I think I actually said in prior calls, "Geez, I'd love to build some inventory," right? We've had to leave business on the table in prior quarters, and backlog got out of whack and everything else. We're back to a nice rhythm now, I think, from a build perspective. There, as you can imagine, there are some prior deals that we had to cut to get the supply to that's now sitting in inventory. You won't see 100% of the supply chain impact disappear overnight. We have to, you know, obviously have to work that through existing inventory and sell that through. You know, I would say from an operational perspective, logistics are pretty much back to normal, which is a, which is a real-time thing. You either pay it or you don't. The supply chain thing also back to a really good place. Once we work through, you know, any existing inventory that had those higher prices previously, we'll be hitting our stride. I think it's fair to say that we are well past the worst of it. Thank you. Our next question comes from Stephen Gengaro with Stifel. Good afternoon, gentlemen. The one thing for me, I wanted to get your read on NEVI funding, kind of where we stand, and what your thought process is on timing, but also your insights into kind of where your customers are in the process as far as trying to secure funding. Sure, Steven. Just to give you some hard facts around NEVI, there are exactly four states where applications on NEVI proposals are due back within, you know, shortly. In general, a little over half the United States has programs that are effectively live, where we're working applications. Comments that I've made in the past have not changed, in that we work across the board with our customer base, where the customers are aligned well positionally with the position requirements, the location requirements within the NEVI program, as well as having the right amenity structure, giving the driver something to do that they would want to do while they're on a road trip. Combining those two things, we're orchestrating responses to the NEVI program. Sometimes, by the way, we're in multiple applications as a technology provider, with different sets of folks from our customer base. That's generally how we approach it. Think of us as trying to put together this set of optimal sites to meet the state's requirements by looking into our customer base or potential customer base and trying to orchestrate that. Okay, great. That's helpful. Would you expect, like, an inflection point when the funds start flowing, or do you think it'll be kind of a more smoother, just kind of realization of those revenues over time? Yeah. Stephen, this is what I refer to as an all whoosh, no bang industry. If you think about what I just said there, right? It's all whoosh and no bang. The timing of all of this stuff, while you will see NEVI starting as we get into 2024 to start to build momentum, right? It's going to build, it's going to build along. There's not going to be a sharp discontinuity where you're suddenly going to go vertical on something like that. Just this market just doesn't let you. State programs and how state programs are implemented just don't let you. Look at the VW Appendix C programs that contributed to our revenue, and it contributed to it in a smoothly increasing way, over the period that program. We would expect NEVI, while bigger in magnitude, to have a similar impact. I wouldn't expect some discontinuity out there in the future. Hey, you know, the sun and the moon and the stars could align, and that could happen. It's just not consistent with history. We'll take our next question from Bill Peterson with JP Morgan. Yeah. Hi, good afternoon, nice to see the gross margin improvement. Just like to clarify in terms of the guidance for this current quarter. It sounds like what you're saying is some of the trends you saw in the first quarter are to continue, just want to make sure. Still continued relative strength in Europe and fleet. Still some, I guess, discretionary slowdown in commercial and residential. Is that the right way to think about it? Are there some other areas that are starting to unlock? I guess, when does the commercial and residential start to unlock? Is it, you know, we're kind of past the debt ceiling. What are people, I guess, waiting on at this point from your vantage point? Yeah, Bill, thanks for the question. First of all, looking forward to Q2, we did not put parameters around that. To your point, you know, residential is a function of the sale of cars, right? Keep an eye on how fast EVs move from, you know, from OEMs into the hands of consumers. That's a hard one, that's a hard one to gauge, but it does look like the OEMs are, you know, catching up on their ability to deliver, which is great. Commercials are tied mostly to the back to work, although there's a lot of, you know, new construction and other areas where, you know, it's just an imperative because this isn't a nice to have anymore. This is infrastructure you've got to put in. You know, as the commercial sector gets happier and less constrained, obviously, I think that will redound back to the benefit of our business. Thank goodness, in both the commercial sector, for our existing customers because they keep coming back. They're a very nice underpinning for, you know, our existing revenue and what we're looking at in Q2. Fleets. You didn't mention fleet, but fleets are a little harder to predict because it's funny on the front end, it tends to be smaller than you would expect, on the middle and the back end, it's bigger than you would expect in terms of per customer. That could be a little bursty. You know, Q2 is just a blend of the stuff that we see. I don't know that it's going to be meaningfully or wildly inconsistent with the stuff we've seen in Q1. Yeah. Okay, thanks. That's a good lead-in to, my second question. You've given some good parameters that you do expect some gross margin, you know, I guess, expansion, kind of keep OpEx fairly flatish. That's fairly good to back into the two-thirds improvement on the, by the fourth quarter. I guess holistically, if we think about third-party forecasts, you know, IHS has, you know, nearly 60% EV growth in the U.S. this year. I think it has above 60% EV growth in Europe for the calendar year. You know, your current quarter, kind of, you know, 40%, 41%, you know, in your growth. Is there any reason to think in the back half of the year that your, at least your network systems, charging systems growth wouldn't be in that kind of range? Boy, I wouldn't put that, frankly, I haven't thought about it in, you know, exactly that, those% terms. I do think that the one comment I made in my prepared remarks to look at the shape of the year, and our ability, and then saying we think we can cut the Adjusted EBITDA loss by approximately two-thirds. It tells you we're thinking we're gonna have a pretty bang up second half, right? You know, I wouldn't express in% terms, but I would say, you know, we're obviously looking forward to a, to a very strong second half, which is frankly what we've done the last two years in a row. We'll take our next question from Alex Potter with Piper Sandler. Perfect. Thanks. I had a question, I guess, on customer satisfaction, uptime, reliability. I know this has been a big focus for the company. Those metrics maybe in the past weren't where you would want them to be. Just interested in knowing maybe what inning you're in terms of addressing that, both, I guess, qualitatively, but also, you know, to the extent possible, translate that into P&L impact would also be useful and interesting. Thanks. Lots of, lot to, a lot of angles on the answer to that question. First of all, you know, I can't speak for other charging manufacturers, but we're very proud of the reliability of our systems and the uptime. We've had variety of different packages for parts and labor, warranty programs since the beginning of the company. We've encouraged customers to purchase those programs. We have a very high attach rate of those programs, as we've commented on that before. All our chargers are connected to our network effectively, so, we've good visibility as to general uptime on the network and whether the chargers are in a catastrophic state of failure or not. There are a few mechanical failures we cannot spot, but we have drivers that have a nice little mobile app in their pocket, and boy, will they tell us when something is broken. They're a good canary in a coal mine from a network hygiene perspective. With that said, we are doubling down now even harder on network hygiene. We are because of inventory relief, we now can turn around spare parts very quickly, next business day in most cases. That was not true during the pandemic. There was some delay there because obviously we were impacted and we were hand-to-mouth on inventory, so I think that hurt the entire industry in terms of repair cycle delay. That is decided now. We have completely revamped our support operations across the board: driver support, station owner support, especially in fleet. We have a lot of new programs in fleet, for parts and labor warranty, training of self-maintainers, forward stocking of spares, et cetera. We think we're actually in quite good shape with respect to our ability to handle that. We're not gonna get overconfident. We're gonna continue to watch it closely. It is, as you've seen in my prepared remarks multiple times now, it is a big rotation. There was a question earlier that Rex took with respect to operating expense focus areas and any focus area changes. What we've consistently said over the last several earnings calls is that we have lived inside what is a flattish envelope for operating expense, but we are not living inside a flattish operating expense with respect to our efforts on reliability, support, operations, et cetera. We are moving emphasis because we believe that that is the biggest differentiator you can have right now, is it has to be reliable. We've commented also previously, the construction of our products are not only from a hardware perspective, looked at from a software point of view inward, so they're designed for all the features that we think are great, but they're also designed to be repaired at an incredibly rapid rate, and also to be able to support forward stocking of spare parts so that there can be effectively a minimum number of subcomponents we build all our charging infrastructure out of. It can be very easy to support the repair cycle that we'll need to support to meet the uptime requirements of most of our customers. Huge investment on our side, absolutely huge. Our next question comes from Shreyas Patil with Wolfe Research. Hey, thanks so much for taking my question. You know, you guys have talked about how there is more diversity amongst your verticals as it relates to your, to your revenue. Is there anything to consider in that from a margin perspective? I think in the past you've talked about, you know, the workplace charger being business being the strongest. Fleet was a little weaker due to a higher DC fast charging mix. Just curious how we should think about that. Yeah. It's actually more product specific as opposed to vertical specific. You know, single-family home is single-family home, right? That has a margin. We've talked about that. It tends to be healthy, but not as strong as some of the AC products that we put into our commercial and fleet operations. Strongest margins are long-standing AC products, which we've recently upgraded to higher power and made some other improvements. You know, where AC goes, you get a better margin, and that can be commercial or fleet. Obviously, we've put a lot of effort behind a very robust DC portfolio, which is everything from Model S that, that fit in certain applications to what we call our Express Plus, which is modular architecture. You know, the margins on those are good and getting better. We actually had a really good progress 'cause they're brand new products, and you launch at a lower number than you ultimately expect to do. I wouldn't say it's by vertical, it's by product, because all of our products not all of them, our products go into both the, both of the major verticals, commercial and fleet. I hope that helps you, but it's. Think of it more from a product perspective. We'll take our next question from Brett Castelli with Morningstar. Yeah, hi. Thank you. Just following up actually on that previous question. Rex, you mentioned the rollout of the new CP6000, I think, on the AC side. Can you just kind of talk about sort of the mix between that new product and the more legacy product that you're seeing today? Also, can you touch on any margin differences between the new product versus the legacy? Thank you. I'll talk about the space that it's carved out for itself, so to speak, and Rex can address the margin question in particular. We brought out the 6K not to replace the 4K series. We brought it out as a high-end product. It has a lot of things that obviously roll down over time into lower cost products, but it's the flagship currently, and it also, for applications where it's needed, can provide more power per port, and that is not necessary in most medium duration parking scenarios. It is not applicable necessarily to every single vertical, although it may have other features that make it applicable to other verticals, because it has features across the board that are superior to the 4K product. Without getting into too much detail on the mix, 'cause it's so vertical specific, what I will say is the fleet segment, if it goes with an AC, more in a light commercial situation, is typically using the 6K or our more lightweight product for light commercial. It is not typically using the 4K product, although we do have some fleet scenarios that use that. The uptick in fleet in particular, there's some correlation there, and the 6K is the primary product we use in Europe. From the commentary that I made, the primary AC product, I should say, that we use in Europe. The comments that I made regard to fleet in Europe's strength and the corresponding strength in the 6K, those, the one pulls the other, right? The fleet and the Europe business are more 6K dependent than they are 4K dependent. Rex, I'll let you take the margin question. Yeah. From a margin perspective, the 6K, as Pas said, it's a premium product, higher performance, better features. Obviously, you know, we're evolving the product portfolio in a positive way. It actually has similar margins in North America to the 4K. It's not all the way there yet, but it's nice to be able to build a, you know, a next gen product and to preserve margin on that as in the process. What's helping us in Europe, as you may recall, we, on the AC side, because of local requirements, et cetera, we've had to leverage third-party hardware, and now we don't have to do that anymore because the 6K is a product that is legal and certifiable and works in both North America and Europe. That's been a nice improvement from a margin perspective for us in Europe. Our next question comes from Itay Michaeli with Citi. Great, thanks. Good afternoon, everybody. Just two quick ones for me. First, I was hoping you could maybe comment, roughly on what you're seeing on utilization of your chargers, particularly among commercial customers. I know not every customer is looking to maximize utilization per se, but curious what you're seeing there. Second, for Rex, just, in terms of the inventory build in Q1, maybe how should we think about working capital, at a high level on the rest of the year? Yeah, two very different questions. I'll take the first, Rex, you take the second. In, in terms of utilization, our sales team obviously sees utilization data, as do our customers. It's a standard reporting feature in our, in our network, and the utilization has to be measured in the context of the hours of operation at the site. So it's hard to comment on utilization in the network as a whole and have that be meaningful, because in any subvertical, the utilization is measured differently, because it's measured during hours. The easiest example to give you is a stadium. We have a lot of stadium customers. The stadium is only active when there's an event at that stadium. Measured on a utilization basis over a 24-hour, you know, on a, you know, 365-day a year basis, stadiums have horrible utilization unless there's an event, and then they're 100% booked. It all goes down to how you measure it, and utilization is very, very strong across the board. If you want to see the best proxy for that, look at the comments that we've made in the past about the rebuy rate. The rebuy rate tends to be the majority of the revenue within a quarter, because, as Rex mentioned in an answer to one of his questions, the initial buy is smaller than you think it should be, and the follow-on buys are bigger than you expect them to be. That's because the customers start out with some experimentation, especially in the commercial segment, where it's more discretionary, and then they see the utilization and let that drive the expansion. Because the rebuy rate is so strong, it's the best proxy you guys can use for, is the utilization on the network: is it strong, and is it growing? Yeah, very, very quickly on the inventory working capital question. No question, in Q1, our inventory popped up, you know, almost $50 million. In truth, that's actually a blessing, not a curse, because we went from a lot of long lead time items and a lot of stuff in raw materials to being able to kit things up and get them built. We have low obsolescence risk on these products, so getting through that and having a blend in an inventory of good finished goods that we can move, therefore, you know, we have pretty back-end loaded quarters like most companies. Knowing that you can ship what you need to ship at the end of the quarter to meet demand is a really good thing. I think the inventory will come down meaningfully on a percentage basis relative to revenue. If you look at the size of the company, the question is bigger than it needed to be in Q1, but those are the reasons, because we're coming out of the supply chain issue. Working capital, generally, if we bring inventory down as a relative to that'll help as the company grows. I actually think that part of the picture will definitely improve later this year. We'll take our next question from Joseph Osha with Guggenheim Partners. Well, hi, thanks. I just have one question. We talked a little bit about NEVI earlier. I'm wondering, given the timetable and the ambition of the CARB Advanced Clean Fleets rule, what your thoughts are about how that might begin to layer into your business? Thanks. I mean, you saw the strength in the fleet business. You know, also, the fleet business is one of the interesting. California, obviously, you know, usually leads the way in the United States with respect to innovation and policy and incentives. Because it's just good for business to electrify your fleet, from a cost structure perspective, we're seeing a fleet business that's pretty pervasive across Europe and the United States, not necessarily hotspotted just in California. Like any program, and this is very in line with the comments on NEVI, it doesn't hit you all at once. It tends to build. It will contribute. It will contribute over time because it'll drive vehicle electrification. Again, I don't expect it to drive a discontinuity. Remember, you need the vehicles to be able to have demand for the charging infrastructure, and that's the biggest variable there. You can have the incentive structure there, but it doesn't necessarily mean that the vehicles are going to follow in perfect order. Thank you, everyone. This concludes today's presentation. We appreciate your participation. You may now disconnect.