Greetings, and welcome to EVgo's Second Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ted Brooks, Investor Relations for EVgo. Thank you. You may begin. Welcome to EVgo's Second Quarter 2022 Earnings Call. My name is Ted Brooks, and I head investor relations at the company. Today's call is being webcast and can be accessed from the investor section of our website at investors.evgo.com. The call will be archived and available there, and the company's results, investor presentation, and a transcript of today's proceedings will be available at the events and presentations section of the investors page after the conclusion of today's call. Joining me on today's call are Cathy Zoi, EVgo's CEO, and Olga Shevorenkova, the company's Chief Financial Officer. Today, we will be discussing EVgo's latest financial results for the second quarter of 2022, followed by a Q&A session. During the call, management will be making forward-looking statements regarding the 2022 fiscal year and our outlook for expected growth and investment initiatives. 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, including, among other risks and uncertainties, the severity and duration of the effects of the COVID-19 pandemic. 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 factors that could cause actual results to differ, please refer to our Form 10-Q filed soon with the SEC and posted to the investors section of our website. Also, please note, certain financial measures we use on this call are on a non-GAAP basis. For historical periods, we provide reconciliations of these non-GAAP measures to GAAP financial measures. The investor presentation can be found on the investor section of our website. With that, I'll turn the call over to Cathy Zoi, EVgo's CEO. Cathy? We're excited to be with you following another quarter of progress for EVgo. Our results for the second quarter, together with the milestone partnership we recently announced with Pilot and General Motors, reinforce our leadership position in ultra-fast EV charging. I want to touch on a few important themes this morning. One, EVgo's continued operational success. Two, our commercial progress, having signed a number of important partnerships. Three, the work EVgo has been doing on the regulatory front to prepare for the massive investment the U.S. is making under the Infrastructure Investment and Jobs Act, and soon to become law, Inflation Reduction Act. Four, and finally, the importance of technology-enabled innovation and why it's critical to all the work EVgo does, including maintaining industry-leading reliability and uptime standards. Let's start on the operational side. EVgo placed 170 stalls into operation across 17 states during Q2, bringing our total stalls in operation or under construction to 2,397. Through the first six months of this year, we have already eclipsed the number of stalls we placed into operation in all of 2021. The same is true for mobilized stalls, which for the first half of the year are already 15% above where they were for the entirety of 2021. At the same time, we continue to increase our active engineering and construction development pipeline, which is now over 3,600. Notably, these numbers do not reflect the additional stalls for the Pilot GM partnership announced a few weeks ago. Throughput was 10.1 GWh, an increase of 66% over the second quarter of 2021. Retail volumes were also encouraging, and the revival of volumes among Uber and Lyft drivers, where combined throughput was up 123% versus the second quarter of 2021, point to the ongoing normalization of the post-COVID-19 period and the continued EV adoption trends everywhere. Olga will share more about some of this in our financial results later. In June, we activated plug and charge for all GM EVs on the EVgo network. Plug and charge, which we at EVgo called Autocharge+, enables EVgo customers to start a fast charging session in seconds by simply plugging the car in. No need to swipe a credit card or even open a mobile app. EVgo's Autocharge+ is another example of homegrown innovation enhancing the driver experience through our collaboration with a variety of automakers. The Autocharge+ rollout also shows how EVgo can apply our technology in a number of different ways to meet the diverse needs of our customers and partners. We can incorporate Autocharge+ into proprietary offerings like GM's Ultium Charge 360 EV ecosystem, in fleet offerings in conjunction with our Optima software product, and more broadly to our retail drivers across EVgo's vast charging network. On fleet offerings, EVgo is now part of a managed charging pilot program with a major Midwestern investor-owned utility as they work overtime to electrify their fleet of vehicles. As part of this, EVgo will assist with installation, testing, and data reporting services, which will be powered by the EVgo Optima fleet charging optimization software and the EVgold charging service and maintenance program. We also recently announced a charging partnership with the city of Philadelphia, in which the city will use EVgo's public charging network as they electrify their fleet of over 6,000 municipal vehicles. Both are very exciting and emblematic of the fleet electrification that is taking hold across the U.S. On the partnership side, in May, we announced a commercial agreement with Cadillac to offer drivers of the new 2023 LYRIQ the option of two years of unlimited public fast charging on the EVgo network. Cadillac selected EVgo to develop this special charging offer to make purchasing the new LYRIQ EV even more enticing. Last month, in collaboration with GM and Pilot Company, we announced an EVgo eXtend product to deploy up to 2,000 charging stalls at up to 500 Pilot and Flying J locations across the United States. With 78% of the entire continental U.S. interstate system within 10 mi of a Pilot or Flying J location, this collaboration represents a giant expansion of EVgo's reach and is poised to greatly enhance the experience of driving an EV on America's interstates and highway corridors. This GM Pilot partnership represents the first major announcement of the EVgo eXtend offering we highlighted earlier this year. As we have discussed, the growth in demand for EVs and the passage of the Infrastructure Investment and Jobs Act in 2021 have increased interest in charging infrastructure in communities far and wide. Our history and track record in operating complex public fast charging networks with higher liability positions EVgo as the ideal partner. As part of the GM Pilot agreement, EVgo will procure, construct, operate, and maintain these charging stalls, providing us with both an increase in near-term revenue and longer-term contracted revenues. In addition to the procurement and installation work associated with this contract, recall that EVgo will also be servicing these assets after installation, providing operational and maintenance support, technology assistance on the hardware and software side, and running the charging network. Since we've been a public company, we've always discussed with investors our laser focus on profitability in the business and making investments only where they clear our internal rate of return or margin hurdles, and this agreement exceeds those hurdles. In July, we also entered into a charger supply agreement with Delta Electronics. Under the terms of this agreement, EVgo will purchase more than 1,000 chargers, which equates to 2,000 EV charging stalls. This collaboration with a major international partner with strength in power electronics helps position EVgo to maintain a supply of chargers at a critical time in our company and our country's ramping demand for charging infrastructure. Overall, EVgo eXtend partnerships provide for increased growth opportunities for EVgo while minimizing our exposure to near-term utilization risk in very nascent markets. Importantly, we are able to significantly extend EVgo's reach on a capital-light basis. On the regulatory development front, we announced in late May that EVgo and OSC-WEBco, a leading global provider of comprehensive, fully integrated solutions to the U.S. federal government, have been awarded participation in a new five-year blanket purchase agreement with the U.S. General Services Administration, commonly referred to as the GSA, to furnish EV supply equipment and ancillary services to federal government agencies. This blanket purchase agreement, or BPA, awarded to just 16 contracting teams, allows EVgo to offer a variety of fast charging and level two charging solutions to federal fleet vehicles across agencies, the U.S. military, and more. With this BPA in place, federal agencies and approved government buyers can work with EVgo to plan, build, and install charging solutions and stations for their fleets without entering into a lengthy procurement process. The Biden-Harris administration is working to transition its entire federal fleet to zero-emission vehicles, and its FY 2023 proposed budget includes $300 million for the GSA and $457 million for other agencies to help facilitate this goal. Supporting an entire electric federal fleet could require more than 100,000 new charging stations, according to the Government Accountability Office. EVgo enthusiastically welcomes the U.S. government's leadership in electrification and looks forward to helping agencies across the federal government meet their EV charging goals. Specific business projects will be announced by individual agencies as they formulate their own fleet electrification plans. These efforts also complement the $7.5 billion investment from the Bipartisan Infrastructure Law, which will help to build a national network of convenient, reliable, and affordable EV chargers. The National Electric Vehicle Infrastructure, or NEVI program, will provide $5 billion in formula funding to states to build out corridor charging. Each state had to submit a plan for using their NEVI funds by August 1st. Once approved, states will be eligible to begin spending their allocated NEVI funds. The EVgo team has met with 36 departments of transportation and provided formal comments to 18 states in furtherance of the development of these NEVI plans. We're expecting to see first solicitations from the states as early as the fourth quarter of 2022 or the first quarter of 2023. The early plans and drafts from states include a strong presence for competitive solicitations for grant recipients over first come, first served approaches. EVgo has strongly encouraged this approach as competitive solicitations tend to explicitly recognize the importance of established track record in delivering charging services, and hence will be more effective in putting taxpayer dollars to good use in maximizing driver utility. EVgo has been busy preparing for this increased commercial activity and believe we are well-positioned, thanks in part to the work we've been doing as part of our Connect the Watts initiative. We started Connect the Watts to bring together all the spokes in the electrification flywheel, including utilities and public funding agencies, to share best practice and help accelerate the deployment of EV chargers. Through this effort, EVgo has developed strong relationships at both the local and state levels, and in many cases, has become a trusted resource for officials looking to implement EV charging solutions. As a reminder, earlier this year, EVgo published best practices for state DOTs for administering the NEVI program. We have a history of working collaboratively to create mutually beneficial public-private partnerships and believe our expertise has been helpful to states in preparing for NEVI. Turning to utility-level rate changes that will impact EVs, new programs have been approved by regulators in California, including at SMUD in Sacramento and at SDG&E in San Diego, as well as pending EV rate changes in Colorado, where a recommended decision by the regulator would be positive for EV drivers and Public Service Company of Colorado's territory. In all, EVgo is participating in rate proceedings in 18 different utility service territories in 12 states and will be reporting back on the outcome of those cases over time. Lastly, on the regulatory front, we announced in late June that EVgo has been selected by the California Energy Commission to receive a $3.6 million grant to build fast charging infrastructure for multi-family housing residents. With more than 6 million residents of California living in apartment buildings, accessible fast charging may be key to facilitating adoption for these consumers. We're thrilled to work with California on this innovative program to keep making it easier for more drivers to go electric. Altogether, EVgo has applied for public funding in more than 30 different grant programs year to date, and we expect to be very busy in the second half of the year. I'd like to close by talking about our commitment to technology-enabled innovation, which we believe is one of EVgo's biggest competitive advantages. EVgo's technology offerings frequently come up in discussions with potential commercial partners who appreciate EVgo's track record and capability across the hardware and software landscape and our commitment to making the EV charging landscape seamless for drivers of all types. Technology is part of EVgo's DNA and value proposition. In a prior quarter, we shared how we leveraged drones to speed up the site selection and development process. Autocharge+, which I referenced earlier, is a great example of our push to add functionality to simplify and enhance the charging process and experience. At PlugShare, which has now been part of the EVgo family for a year, we exceeded 2.5 million registered subscribers as the platform continues to grow. In addition, we launched PlugShare Premium during the second quarter, which for a small monthly fee enhances drivers and allows them to opt for an ad-free experience. The EVgo Innovation Lab continues to provide value across the EV sector and to augment our operations in El Segundo. It now operates three remote locations at OEM development and testing facilities. Since the lab was opened, we've tested passenger EVs from 13 different OEMs and fleet EVs from 12 different OEMs. We test vehicles against the full complement of chargers deployed publicly and privately, as well as with new chargers undergoing EVgo's rigorous certification process. I'd also like to share more about how EVgo maintains industry-leading reliability and uptime standards on our network. This involves testing, preventative and corrective maintenance, a 24/7, 365 call center, and consumer research. Emblematic of our enduring commitment, EVgo conducted a study in February and March this year to assess the operation of over 250 chargers in Northern California. This is one of the highest usage regions on our network. We reviewed charger logs and investigated payment processing systems, charger initiation functionality, and overall vehicular interactions across seven different vehicle types. We also conducted a follow-up health check on these same chargers in May. What we have found is that 95% + of the chargers were functioning as expected. Similar review processes and health checks are occurring across the country, with upgrades and replacements of old equipment planned for 75 stalls in the third quarter alone. This work is something EVgo budgets for and expects to do in order to maintain industry-leading performance, which we recognize is critical in maintaining driver confidence. As EVgo derives our revenues from operating chargers, we remain fully aligned with our customers and shareholders in maximizing uptime. In closing, we believe that not only is EVgo entering the rollout of the federal government's NEVI program with strong momentum and substantial progress. This weekend's Senate passage of the Inflation Reduction Act provides the EV sector with even stronger tailwinds. Slated for a vote this Friday in the House, the new bill includes provisions that extend and advance Sections 30C and 30D tax credits for EV charging infrastructure and EV purchases, respectively. While we are still working our way through the particulars of the bill, it is clear these developments represent enhanced financial support for the industry, and EVgo expects accelerated growth to arise from both greater EV sales and expanded funding for charging infrastructure. We're looking forward to providing more on this as program details are finalized in the coming days and weeks. As one of the longest-running, largest, and most reliable public fast charging operators in the U.S., we could not be more excited about the possibility of accelerating our growth, expanding our partnerships, and helping to encourage the wider, faster adoption of EVs across America. With that, I turn it over to Olga. Thanks, Cathy. I will start with a review of the key operational highlights before turning to our financial results, followed by some additional details on the financial impact of the Pilot Flying J and GM partnership we have recently announced. During the second quarter, we placed 170 stalls into operation in 17 different states. The number of stalls in operation or under construction was 2,397 at the end of the second quarter, with a total of 1,937 stalls being in operation and 460 under construction. Our active engineering and construction development pipeline remains strong and increased from 3,344 stalls at the end of the first quarter to 3,669 at the end of the second. Operational stall growth has picked up pace year-to-date. Though some challenges remain on the utility side, where we're still experiencing energization delays, we do affirm our total stalls in operation or under construction guidance of 3,000-3,300 by the end of 2022. In July, we entered into a long-term supply agreement with Delta Electronics for the procurement of 350-kW chargers. This agreement will provide charger supplies through 2026 and covers a substantial portion of our obligations under the new eXtend deal with Pilot and GM. Network throughput was 10.1 GWh for the second quarter of 2022, an increase of 66% over the second quarter of 2021. We benefited from seasonality as more consumers took to the road during the spring and summer periods, continued growth in EV sales, and rebound in rideshare. We expect the positive impact of seasonality to continue through the summer. Our customer count increased by 18% versus the first quarter of this year and is now 444,000. Turning to financial results. We reported $9.1 million of revenue in the second quarter of 2022, which is an increase of 90% over the second quarter of 2021. Charging revenue was $5.3 million, up 66% over the second quarter of last year. Strength in retail charging, which was up 76% year-over-year, helped drive over half of the increase in overall revenue. Regulatory credit sales were $2.1 million. As a reminder, we expect regulatory credit sales growth to modulate in the third quarter as we sold off our existing bank of credits and will revert to business as usual. Adjusted gross margin was 37.2% for the second quarter, reflecting the increased benefits of amortizing our fixed cost base over larger network throughput and acceleration of LCFS revenue recognition. Overall, year-over-year adjusted gross margin increase was approximately 15 percentage points, with roughly nine percentage points of those added by LCFS acceleration. We expect that to normalize and modulate starting in the third quarter. CapEx increased substantially to $44 million this quarter as we continue to accelerate the charger deployment. General and administrative expense was consistent with ramping up personnel as needed to accommodate the growth. We reported Adjusted EBITDA of -$19.8 million versus -$11 million in Q2 2021, which was also consistent with the ramp in personnel growth and expenses associated with being a public company. We ended the quarter with $372 million in cash and short-term investments and remain well capitalized at this time. Turning to our new EVgo eXtend partnership with Pilot Company and General Motors. The agreement calls for the construction of up to approximately 2,000 fast-charging stalls, primarily over the next few years at up to 500 Pilot and Flying J locations across the United States. We have not disclosed the terms of this deal, but I would like to draw your attention to the cash flow profile of our core develop own operate model versus the new eXtend model. In the annual cash flow examples you see here, and this is for 2023 vintage projects in both cases, the year zero cash flows are negative in the core develop own operate model, as you would expect, due to the incurrence of capital expenditures and then turn positive in year one as the project goes operational. Those cash flows are recurring in nature and grow over the life of the project as more EVs are on the road, throughput increases, and operating leverage is being realized. For the eXtend model, EVgo sees positive cash flow immediately. This is because our customer incurs the upfront capital expenditures while EVgo generates margin as the developer and builder of the project, as well as going forward as we earn ongoing revenues from providing operations, maintenance, and networking and software integration services under the contract. Introduction of eXtend helps optimize near-term utilization risk in corridor sites. We expect these sites will ramp in terms of utilization more slowly than our traditional urban sites. At the same time, those are important locations to build EVgo's presence as we improve national coverage. We believe that these eXtend partnerships create long-term value for EVgo as they provide opportunity for long-term service cash flows, site expansion and refurbishments, and customer acquisition and retention. Lastly, I would note that we are affirming our 2022 operational and financial guidance and look forward to sharing more updates as the year progresses. As a final note, EVgo is now Form S-3 eligible. In accordance with customary market practice and with EVgo's obligations under our registration rights agreement, subscription agreement, and warrant agreement, we intend to file an S-3 shelf registration statement following the filing of our second quarter 10-Q. The Form S-3 will register the shares owned by our controlling shareholder, other shares entitled to registration rights, and provide us greater flexibility for potential primary issuance over time. With this, I will conclude and turn the call over to the operator for questions. Thank you. Ladies and gentlemen, at this time, we will be conducting a question-and-answer session. If you'd like to ask a question, you may press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. As a reminder, if you could please ask one question and one follow-up so we may get to everyone's questions in queue. Our first question comes from the line of Gabe Daoud with Cowen. Please proceed with your question. Thanks. Morning, everybody. Thanks for all the prepared remarks. Cathy and Olga, I guess maybe just starting with revenue for this year. I know it's really inconsequential just given how early days we are here. Can you give us a little color or confidence in the ability to deliver on the steep ramp that's implied for the rest of this year? Yeah, sure. I mean, Gabe, I would just sort of say we're tracking to our forecast. You know, what we have taken account of is the obvious growth in EVs over time, the number of EVs that are coming to market, the seasonality factors. Again, we did bake in a little bit of the PFJ deal because, you know, we had been negotiating that late last year. We knew that was gonna be part of the scheme. Olga, anything you wanna add to that? Yeah, I would concur that some of the PFJ revenues and some of the fleet contractual revenues are scheduled to kick in closer to Q4, second half of the year, and that explains heavier load on second half of the year versus what you see in the first year. As we said, we're firm in our forecast, our guidance at this time, and we are tracking towards it. Okay, great. That's helpful. Maybe as a follow-up, thinking about all the moving pieces on the policy front and eXtend, obviously the Pilot deal, a pretty nice way to, you know, quote-unquote, "eXtend," the network. Just curious, I guess how big of a contributor do you think eXtend becomes, particularly as you know, NEVI in some spots, I think as you mentioned before, might not make the most sense to own and operate. Just trying to get a sense of how big eXtend can really be over the next, you know, call it two to three years. Yeah. Well, Gabe, I think, look, you've identified the key thing. I mean, the policy objective of NEVI first and foremost is to get national coverage with a focus on corridors of rural areas. Again, I think your forecast as well as ours, the expectation is that that's going to be kind of a, probably a slow burn for a while. You know, having seen this coming, we developed EVgo eXtend and negotiated the Pilot Flying J deal, which is substantial. It's just, it's a great addition to our overall, like our overall product mix, revenue mix, earnings, all of that. So that's great. More probably is to come because, you know, Pilot Flying J is not the only entity that has corridors and rural, a rural presence with... Many of those rural gas station operators and those folks remain interested in participating in the electrification revolution. Given EVgo's track record over 10 years of operating a network really well, we're very well placed to have that be a part of our business going forward. As soon as we can tell you about specifics, we will. We look forward to talking about these good business development things when they get inked. Understood. Thanks, everyone. Thank you. Our next question comes from the line of Andres Sheppard with Cantor Fitzgerald. Please proceed with your question. Hi, good morning, and congrats on the quarter, and thanks for taking my question. Maybe to follow up a little bit from that first question. In order to meet the guidance, the revenue guidance for later this year, can you talk about, do you anticipate some seasonality in Q3 and Q4 or quarters? Should that be kinda heavier concentrated? Any insight there would be helpful. Thank you. Sure. Just to reiterate, our business, core business, our retail revenues from the drivers who drive around the EVs, it depends on seasonality, but it also depends on EVs getting sold. We do expect some of the seasonality actually in the winters to the detriment, but fall is neutral. There's some seasonality playing, but mostly we expect to continue to ramp up to have more customers in our network. As you have seen, we just signed up roughly 6,000-7,000 new customers this quarter on our network. We expect that to continue to ramp up and that driving more revenues through the end of the year. Most importantly, why our forecast is more heavily loaded towards the second half of the year is the kicking of certain contractual revenues by the end of Q3, beginning of Q4, namely from the new PFJ contract and some of the fleet contractual deals. There are two things happening at the same time here. Got it. That's very helpful. Thanks, Olga. Maybe one last follow-up. In regards to the NEVI program, I know this was just touched on, but just to get it right, you've already conducted sessions, looks like here, with 36 states, submitted four more comments, 18 states. The plans are expected to be confirmed later in September as well. I'm just wondering, can you give us any sense of, you know, what we can expect from your contract with the states? I know you're not guiding any numbers, but maybe a little bit color. I know you've said Q4 2022 or Q1 2023. I'm just trying to see if we can maybe quantify that a little bit. Thanks. Yeah. Andres, so like I'd like to provide quantities as well. It's actually we can't do it. What we know is it's a big, giant amount of money that is absolutely gonna start to flow at the earliest Q4 this year, but also probably well and truly get moving Q1 2023. The conversations, what we're really excited about is that our experience and our best practices documents and our conversations, we become kind of a thought leader for state DOTs that are designing their programs. You know, that we're seen as not only experienced, but willing to collaborate and cooperate. The fact that many of these programs are saying we're going to do competitive solicitations based on track record is really, really. That puts EVgo in a kind of a pole position to, you know, get our share of that business where we wanna go. It's, you know, it's $5 billion over the next few years. It's, you know, they're gonna be looking for companies that can actually deliver on what they say they're gonna do. That is very much EVgo. We will be very active in bidding for that business. I mean, you do have to go ahead and bid for it because these are competitive solicitations, but we're really well-placed. If you look at the, you know, our history of being able to access funds from, say, Volkswagen's Appendix D Dieselgate settlement, again, that should give you some confidence that that's going to just give us more forward momentum going into the implementation of the NEVI program. Got it. Fair enough. Thanks, Cathy, and congrats again on the quarter. I'll pass it on. Thank you. Thanks, Andres. Our next question comes from the line of James West with Evercore. Please proceed with your question. Hey, good morning, Cathy, Olga, Ted. Hey, James. Cathy, kind of a big picture question for me. We've seen, you know, the move in interest rates and equity prices, and clearly there's been a change in cost of capital for the industry. You have, you know, a good number of competitors, and I'm, you know, using air quotes there, but a good number of competitors that are not well capitalized, and you guys are. As you talk to customers, potential customers today, and you think about, and they think about how they wanna build out, or work with or partner with, charging providers, has that economic reality started to set in yet? Are they understanding that, you know, there's gonna be a shakeout here and there's winners, there's losers. The well-capitalized guys are clearly the winners at this point, given the change in, I mean, overall capital markets and cost of capital. Yeah, it's a great question, James. I think it's probably there in the background as part of our sort of all of our B2B, you know, business development conversations. I mean, the most important thing that we're finding is that we've got a track record of delivery, right? Like, Right We've got blue ribbon partnerships that keep coming back for more. I mean, our partnership with GM just keeps going from strength to strength to strength. Right You know, Toyota coming across. I mean, all of those and those were sort of well in hand, and we were delivering chargers that we needed to deliver and delivering, you know, customer benefits and everything else well before well before all of this sort of the capital markets went completely dry. But I would say probably, I mean, if you're going to be doing business, the electrification of transportation is lots of near-term work, but it's a medium-term gain. If you're gonna wanna be- Right. You're gonna wanna partner with somebody that the chargers are gonna be in the ground for 10 years or so. You're gonna wanna be partnering with somebody that's gonna be able to manage those assets really, really well. I know whether we own them or whether the counterparty owns them. I think, again, that's why Pilot got excited about partnering with us because of that track record. You know, the access to capital markets as the markets continue to grow, that well-capitalized companies will have compared to others. Sure. That's probably part of it. That's probably more your world than our operational world, frankly. You know, it's just. Sure. It's part of the whole schema that you wanna be doing business with other blue chip providers, and clearly EVgo is viewed as that. Right. Okay. That makes sense, Cathy. Thanks for that. Maybe one for Olga. Olga, as you were talking through the utilization, sorry, the cash flow examples, I'm just curious. I think you're now fairly cash flow positive at certain locations or certain areas in you know, California, maybe Brooklyn. What do you need? What is the you know, utilization number? How should we think about the amount of EVs or however you think about it, that we need to be cash flow positive on a kind of a per location standpoint, so that we can understand kind of how to model out each location when we go cash flow positive. In our minds, you know, obviously assign a value to those stalls. Yeah. No, that's a good question. The answer will be it depends because the- Right. Sorry. Yeah. The cash flow, the positivity of the cash flow in each location or in each geography, it depends on multiple factors. One is how many EVs are there, right? How many EVs are using EVgo as its network? What is the MUD density? How many people are using public charging versus charging at home? Do we have LCFS in this location or not? California versus non-California. What is the energy cost environment? Energy cost, they range from as low as $0.07 in Seattle to $0.40-$0.50 in the East Coast of the country. You have a variety of different factors. It is very difficult to pinpoint a specific EV concentration number. I'd say when you're probably looking at utilizations as low as single digit, where you could start seeing cash flow positivity in some of the better markets with LCFS presence and with lower energy costs. Then you probably need low double digits for kind of medium markets, and then it goes up from there if you're really in the markets with high energy costs and no other incentives. Again, very hard to pinpoint to some averages just because of the diverse nature of those other factors. You're absolutely right. Some of the locations in California, such as San Francisco, Los Angeles, Santa Barbara, some of the locations in high EV adoption areas such as Arizona. Phoenix is one of our high utilized markets right now. We also see some of the East Coast locations really kicking in. Connecticut has been quite an interesting market, has been really growing quite a bit in the last six months. We see pockets of it. We will update the market with how that progresses. Again, hard to pinpoint a specific number within the country. Okay. Fair enough. Thanks, Olga. Thanks, Cathy. Pleasure. Our next question comes from the line of Ryan Greenwald with Bank of America. Please proceed with your question. Hey, team. It's Alex Rygiel for Ryan. Unfortunately, he's tied up on something else. Just two quick ones that I wanted to ask on eXtend specifically. I mean, I know you gave us some guidance sort of on the cash flow profile. How would you characterize the margin profile, though, sort of bifurcating between the initial site development, installation, and then, you know, sort of the recurring fee element, if you can opine on that? Sure. Let us first comment on our core business model. We underwrite to a minimum of a double-digit unlevered pre-tax IRR over the life of the asset because we put CapEx in, and then we get investment back. IRR is a concept we use to underwrite those. On eXtend, on a specific PFJ deal, which we announced recently, we're not disclosing the terms of that deal. Conceptually, when we assess eXtend deals, as deals we are working on for EVgo, we're looking at a minimum of a double-digit cash flow margin. Over time of the contract, we are targeting to get a minimum of that. That's a bit of a different concept because you don't underwrite the CapEx, you don't underwrite the investment. You underwrite the overall cash flow generation to the company. We use a bit of a different concept in here, but we keep the same quantum of what cash flow margin we would like to get back. Got it. Very helpful. Then just one more on the policy sort of landscape, if you will. I mean, how do you see the practicality of the, I guess, sort of revitalized Section 30C tax credits, you know, given location provisions, no direct pay? I mean, how do you guys see your capacity to sort of extract value from that going forward? Sounded positive, but curious if you can sort of parse that a little more for us. Yeah, look, I actually think it is positive. While there's no direct pay, it's also transferable, right? That the transferability of a tax credit is actually, you know, if you look at other sectors, it's like it's not a real heavy lift. I think that that is real value for us. The locations are. There are places where we really definitely want to take advantage of that value because it those are places that were it not for the tax credit, we might not be terribly interested in building. I think that the provisions, the 30C provisions that are part of the Inflation Reduction Act are likely to be material for us enabling EVgo to extend our footprint and our reach, you know, over the next few years. Got it. Thanks, team. I'll leave it there. Thank you. Our next question comes from the line of David Kelley with Jefferies. Please proceed with your question. Hey, good morning, and thanks for taking my question. Maybe a question on the step up and CapEx, just given your growth targets. Should we assume the $44 million is the new baseline for future expansion? Or were there any kind of one-time impacts in the quarter? There are no one-time impacts on the quarter. It's a continuation of our efforts to build our network. We've guided the market to 3,000-3,300 stalls under construction or operational by year-end. When we come out with the guidance for 2023, we will give that guidance again, we think. I think that what mostly drives the CapEx expense, and it's how many stalls we're about to build. What happened this quarter is probably emblematic of kind of this year ramp up. Going forward, we will update the market with more precise stall guidance, and that will help you understand how to model that CapEx. I wouldn't necessarily assume that $44 million every quarter for the next five years is the right assumption, just because it will be driven by our decision on the pace at which we will eXtend the network. Okay, great. Thank you. Then maybe a question on PlugShare Premium and recognizing it's still very early days. Can you talk about the reception to the subscription and maybe how you're thinking about potential longer term penetration within that growing, you know, 2.5 million registered subscriber base? Yeah. We Yeah. Yeah. Thank you. Oh, go ahead, Olga. Well, I'll start with the macro, but like, we're really excited about the PlugShare platform, and as you kind of noted, all of the eyeballs that are on that. We spent a fair amount of time over the last 12 months investing in the build-out of the platform and its capability to increase advertising reach, right? Again, you need software infrastructure to be able to do that. Our investment in that software capability has increased the ability to add impressions by 6x, which is really great. At the same time, it's a customer curated community, and we're mindful of some of the people, some of the 2.5 million eyeballs may not want advertising. That's what the invention of PlugShare Premium was all about. Provision of the ad-free environment for PlugShare users. Again, you're right, it's very, very early days. That was sort of at the behest of those saying, "Look, we love PlugShare, but we actually don't want to see ads, and we'll pay for that." We'll report back on the growth of that. But again, the early reception from that subset of the 2.5 million, you know, pairs of eyeballs that are using PlugShare has been very positive. Yeah, I would add that we definitely saw an immediate ramp up, measured in hundreds of people who had interest in trying that out. What we also conceptually, philosophically, would like to do with PlugShare Premium is to add different features and maybe increase the price of what that subscription is over time, but we will update the market when and how that will happen. It's a first step in the right direction here, and we already see positive response, meaning that people would like to use premium product and pay for it. How the premium product is gonna be evolving over time, we will continue to provide updates and we are personally quite excited about that. Okay, great. Thanks, Cathy and Olga. Our next question comes from the line of Bill Peterson with JP Morgan. Please proceed with your question. Yeah. Hi. Thanks for taking my questions. Understanding maybe that CapEx, absolute CapEx, you know, trends are not, you know, fixed, but how are you thinking about CapEx per stall trends? I know you've been experiencing an inflationary environment. I think it's up quite a bit thus far this year. You know, as you look out and you have the eXtend program and all the things you're doing for GM, are you seeing any light at the end of the tunnel that some of these costs or cost per site should start coming down? We. Olga, do you wanna just. Oh. Yeah. Go ahead. Oh, yeah. I'll take that. We definitely see the first signs of abatement. We are now looking at roughly $140,000-$145,000 per stall in the second half of the year, and mostly the increase is associated with the inflation on the labor part. We have started a wide range of different initiatives to abate that and find savings elsewhere. Obviously, on the labor component, it's difficult. Labor is not getting any cheaper. We can be smarter than that. Some of the things we're doing, we're getting better prices on equipment, we can say as much, and we spoke about the new contract with Delta in our earnings script. That is quite positive, and we continue to see positive effect with the rise in competition and just the rise in volume in the industry. We are beneficiaries of equipment prices being under pressure here. We are also how we organize and how we're thinking about which sites to build. We're prioritizing sites with shorter utility runs, and we're working on a couple of other efficiency innovations. For some of the CapEx as we are looking at closer to mid-year next year, we already see quite a bit of improvement in CapEx, but we will update the market once we're closer to that. Definitely see some first signs of improvement here. Yes, what I would like to highlight that inflation, high inflation environment continues to persist, as everybody knows. We will work hard to get savings in a couple of places I mentioned, but at the same time, we're under pressure for those pieces which, such as labor, for example, and some other equipment other than actual charger, where we will continue to experience, pressure from rising pricing environment. Okay. Thanks for that. Embedded in your full year guidance, I'm curious, where are you expecting LCFS credits to trend, I guess, in the second half of the year? What is the, I guess, expectation? We're expecting them staying flat at what we traded the last time we traded, we traded at roughly $95 per credit, so we expect that to stay flat through year-end. Well, that's to be seen if that works out. We are exposed to volatility in LCFS pricing. Okay. Thank you. Our next question comes from the line of Noel Parks with Tuohy Brothers. Please proceed with your question. Hi, good morning. Good morning. Hi. Yeah. I just had a couple of things I wanted to ask about. You were talking earlier about sort of your extensive testing program. I think you mentioned 250 chargers that you had tested. I was just wondering, for the expanding set of equipment vendors out there, I'm just wondering, from your perspective, are product capabilities aligning pretty well with, I guess, both sort of what's most important to you guys, on the demand side and also as far as pricing? Or just interested in how you see kind of the current and coming crops of devices out there. Yeah, I love this question. You know, one of the reasons, the EVgo Innovation Lab is just so important to success, and we make that available not only to all the OEMs, the car companies, but also to all the charging companies. It ends up being the central repository where we test all the chargers that are coming to the market, and we test them with all the cars that are either on the market or coming to the market. It is a big giant, like, ecosystem party to make sure that it is all going well. I will tell you. Uh-huh that every single brand new car that comes to market, like the automotive engineers are so excited about it, and they look really cool. I was thinking, our CTO, if we asked him on this call, at what percentage of cases does the car work with all the chargers right when it drives up to the lab the very first time? That's damn near zero. That lab Yeah is really, really important to getting the ecosystem working. It's nascent days of this ecosystem, and the car companies get it, and the charging companies get it. When we select a new supplier for our charging equipment, it goes through a rigorous process. First of all, they have to meet our specifications that we put out there in writing. Then they say, "Yeah, we meet this." It's obviously economics in that as well. Mm-hmm ... once they pass those hurdles, then we begin the testing procedures at our lab, which are the hardware, the firmware, the software, and then testing it with lots of different vehicles that are available. That's all to say we're very excited about the industry's capability to meet our exacting standards to be able to create great driver experiences. That's a lot of hard work. It's our work. It's work that we're involved in, and it's work that we're partnering with both the vendors and the OEMs on, and it's gonna stand us all in good stead for the electrification of transportation in America so that we can create happy drivers. Right. Yeah. Important for sort of adoption and acceptance going forward. Absolutely I do just wanna turn for a moment to the multifamily market. You mentioned the California award. It does seem like one of the sleeping giants out there as far as the ultimate potential. You know, not everyone has a garage. I'm just as curious on the. Are Are there any special characteristics to the contracts for that market that you're devising, or is it pretty similar to sort of any commercial setting? Well, yeah, no. What's unusual about this is that the look, 30% of Americans don't have access to home charging 'cause they don't have a garage, they don't have a carport or something like that. If you want the entire country to go electric as we do expect to happen over the next 10, 15, 20 years, then you're gonna have to provide access to this charging. The apartment dwellers, again, the rebuttable presumption had been that you've got to put L2 into these apartment buildings, right? 'Cause people are gonna be there all night. Mm-hmm. What's innovative about this approach in California is like, well, actually, what if there were convenient fast charging and that people could just come and do 15-30 minutes at a shot? Maybe that's even more convenient and more cost-effective than going in and trying to wire parking garages and apartment buildings. That's what's very, very exciting about this. We are hopeful that we're gonna be able to enable a new capacity for these apartment dwellers to conveniently charge near their homes, quickly, and that we think that will work. That's what that $3.6 million California grant is about, and I'm sure the rest of the country is going to be watching for the results of that as they think too about how are we gonna make it easy for apartment dwellers to charge close to home. You know, and we don't necessarily wanna go into the basements of garages or apartment buildings that don't even have garages, right? Which is another possibility, right? Yeah, we're excited about this. Good use of urban footprints to have fast charging rather than tying up whole parking lots for overnight charging. Right. Yeah, thanks. It's fascinating trying to sort of game out exactly how all these different sectors are gonna evolve. Thanks for that insight. Pleasure. Our next question comes from the line of Oliver Huang with Tudor, Pickering, Holt. Please proceed with your question. Good morning, everyone, and thanks for taking my questions. Just a quick follow-up to the CapEx question from earlier. Besides the ramp-up being a primary driver, are there any details with respect to how much of the increase is due to increasing of charger output capacity size materially or any decreases to capital cost incentives or offsets when kind of compared to recent quarters? Let me just clarify. There are no capital offsets in that $44 million number. It's a pure CapEx. It's a gross CapEx. All the capital offsets, they sit in a different spot now on a cash flow statement. Every time you'll see us reporting CapEx, that will be actual CapEx we've put into the ground, amount of equipment and labor and whatnot. Most of that ramp-up is just acceleration of speed at which we're constructing. Of course, you know, we see a bit of an increase in the install CapEx, and it drives that a little bit. If you really kind of dissect in between the price and quantity here, quantity is an overwhelming factor. We are constructing at a much, much higher pace than we used to. Okay, that's helpful. For my second question, just with respect to OEM network revenue, understand that this should really start to kick up in the back half of the year and into next year from your earlier comments. Anything incremental to provide there to help us better understand the trajectory of that specific line item on a go-forward basis, just kind of given the imminent timing of various EV models coming to market that y'all have agreements with? Would this inflow be something that we should expect to be fairly lumpy as it starts to hit? Let me clarify some of the earlier comments. They were related to PFJ contract, which will be more ancillary revenue or eXtend revenue reported separately and some of the fleet contracts which will sit in the fleet revenue. We do not expect much of a ramp-up on the OEM non-charging revenue. That's amortizations of Nissan and GM contract prepayments, and they happen in. It's been complicated accounting those, but those amortizations are tied to how many cars of those particular OEMs are on the road. Over time, they will ramp up, but we don't see much of a lumpiness this year. For near term, you could just assume kind of a continuation of the trend you see now. Okay, awesome. Thanks for the color. Our next question comes from the line of Maheep Mandloi with Credit Suisse. Please proceed with your question. Good afternoon. Maheep Mandloi here from Credit Suisse. Thanks for taking the questions here. Maybe quickly just on the charging volumes and throughput, the steep ramp embedded in for Q3, Q4 here. Could you talk about that? Like, what's driving that visibility? As we saw a 30% jump in Q2 sequentially. Is that something we should expect for Q3, Q4 as well? Or does it include any of the PFJ eXtend as well? Thanks. Hey, do you mind clarifying what line items is your question about? Sorry, I missed it. The throughput, the 50 GW-60 GW for the full year. It kind of implies almost 19 GW run rate in Q3 and Q4. PFJ, kilowatt hours won't be included in that. We expect some ramp-up on both retail and fleet side, and that will drive the increase. Gotcha. Just with the revenues here, like, they're somewhat flattish over here quarter-over-quarter. Anything specific on that end? Like, could we see a similar mix shift in the second half? Or, what drove that, flattish charging revenues? Charging revenues grew 20% sequential quarter-over-quarter. I wouldn't necessarily define it as flattish. Maybe I do misunderstand your question because we definitely saw quite a bit of growth in our charging revenue in Q2 versus Q1. Got you. No, my bad. I probably was looking at the round up, $5 million just for the charging revenues, yeah. That's fine. Yeah. I'll follow up on that. Yeah, it's roughly $5.2 million in Q2 versus $4.3, $4.4 million in Q1. We do see close to 20% of a ramp-up. Gotcha. Just last one for me on the regulatory credits. Any on the timing of the inventory sale I saw in Q2, any reasons behind it? Do you have any more left in inventory now? Yeah. We don't have any more left. The reason was, we spoke about it a couple times, but it's a complicated matter. I'm very glad to reiterate that. We switched in the beginning of this year to a third party handling our LCFS trading, and that allowed us to recognize the revenue from LCFS as it occurs. Versus six months lag. What we did previously, we would incur our kilowatt hours, get LCFS credits, and trade them six months after the event of generating those kilowatt hours occurred. We switched to immediate generation. For the first six months of this year, we recognized the revenue as it occurred. There will be kilowatt hours generated on California network, translated into how many credits, and we recognized revenue according to that. Plus, we had six months worth of LCFS credits left from the old recognition method, and we just sold them in Q1 and Q2. That's a one-off event. Going forward, you will only see LCFS recognition, which is associated with kilowatt hour throughput in California that particular quarter. Gotcha. Okay. Just one last one from me, just on the Delta long-term supply arrangement. Could you just provide some more details around it or just help us understand what does it entail, fixed pricing or duration or any color would be appreciated? Thanks a lot. Sure. It mostly covers our PFJ deal for the first phase of this relationship. The deal does assume a fixed price and covers up to 1,000 chargers, AKA 2,000 stalls, 'cause those are power shared configurations, and the deal is set up until 2026. We will be working on other supply agreements, and we will update the markets once that's possible, but that's the first in a row. Gotcha. I really appreciate the color, and thanks for taking the questions. Our next question comes from the line of Craig Irwin with Roth Capital Partners. Please proceed with your question. Good afternoon, and thanks for taking my questions. Cathy, I wanted to ask specifically about your mix of 50 kW units on the network. It's around 2/3 of the 2,400 units that you have out there. Is there any commitment to installing 50 kW units going forward? Can you maybe talk about the budget to retrofit these to higher capacity units? What sort of plans do you have? What's the capability of retrofitting these units at the existing sites that you have out there? Is there anything else we should consider when we look at these lower power units? Yeah. Thanks, Craig. Look, as I think I mentioned in our last call, what our standard configuration now is 350s, right? 'Cause the market is moving towards 350s, and we're skating ahead of the puck there. We are putting in 350s everywhere. Because we've been around for 12 years, and again, when I got to EVgo nearly five years ago, 50 kW was considered fast charging. It is still fast compared to obviously a level two, and a lot of people use it, but we are moving ahead, we will only be putting in much higher power ultra-fast chargers. With respect to the replacement, it's interesting. In those old days, when you would put in one 150-kW charger or two 250-kW chargers, you could do it without any sort of utility upgrade, any transformer upgrade. You often were on the host meter because, again, there was excess capacity at that site level. So that made those projects in some ways easier to do without getting the utilities involved in a major way. What we are doing now is we're looking across our entire network at in the cases where we had 50s, is it possible to upgrade them and upgrade them efficiently, or is it actually more effective and more efficient to simply go and build more capacity in those areas? That's something that our COO, Dennis, is taking a good look at. We've got our program, which is the replacement program for old chargers where it's possible to do it. If the replacement is going to involve lots and lots of utility upscaling and digging and everything else, then maybe it just makes more sense to build more in a location with proximity. There are a number of. You know, people are still using the 50 kW chargers, you know, with great delight and getting what they need. Look, it is we don't have a blanket sort of. We have guiding principles, which are, we're only installing higher power, we're upgrading, we're building really quickly, but we don't have a plan to retire those 50s because they're still providing great utility to a lot of EV drivers across the country. Okay. I mean, just for the record, you have 125 out of your fleet of just around 2,400. 125 of those 350-kW units, that compares to Electrify America at, you know, just under 750. You know, how long has this been a priority for you? Is this a priority that was established in the last year, or is this something that, you know, is a building piece of momentum as far as the installs? I'm not sure. What are you asking specifically about what's been a priority? Yeah. You have a much smaller proportion of your fleet in 350s, right? Than your primary competitor out there. Your primary competitor has just under 750 350 kW fast chargers out there. You have 125. You know, I'm just wondering when the priority moved for EVgo to being committed to 350 kW units, right? It's a very small piece of your fleet. You know, what portion of the pipeline or the capital budget out there is committed to 350s? Is it everything? Is it 10%? The pipeline going forward is 350s. Since we've been in existence longer, we do have a number of. We have 50s, 150s that are in our network, and we're building very quickly. So we are. You know, over time, we will have an increasing proportion, just doing the math, of 350s relative to the 50s. So we are skating to where the puck is going to be, and we're completely committed to it. Great. Thanks for taking my questions. Sure. There are no further questions in the queue. I'd like to hand the call back to management for closing remarks. Well, thanks everyone for joining us today. Thank you all for joining us. Go ahead, Ted. No. Go for it. Sorry. No. Look, thanks for joining us, guys, and we're looking forward to keeping in touch and, if we don't speak before the next quarter, lots of progress ahead. Thank you. Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.