ChargePoint Sets Record Gross Margin

ChargePoint(NYSE:CHPT) reported results for the fiscal second quarter ended July 31, 2025. Revenue reached $99 million, down 9% year-over-year but at the top end of guidance, with non-GAAP gross margin hitting 33%, a new company record. Management extended its timeline for non-GAAP adjusted EBITDA breakeven beyond this year, citing project delays, and chose to sustain R&D investment supporting new product launches and strategic partnerships.

Gross margin rises to record on improved cost discipline

Non-GAAP gross margin reached 33%, an increase of three percentage points quarter-over-quarter and eight percentage points year-over-year, despite sequential growth in R&D spending related to both AC and DC product launches. Subscription gross margin hit 61% on a GAAP basis, highlighting scaling benefits as installed ports globally surpassed 363,000, with 123,000 located in Europe.

"Non-GAAP gross margin improved sequentially, with Q2 results coming in at 33%. This figure is notable as the highest gross margin we have reported since becoming a public company, and we successfully mitigated tariffs to achieve it. Cash management was exceptional, with our ending balance at $195 million, only $2 million below Q1's close, largely driven by structural OpEx changes we have been making over the last year."
-- Rick Wilmer, Chief Executive Officer

This gross margin expansion, achieved despite tariff headwinds, signals strengthened operating leverage and validates ongoing structural cost management initiatives, enhancing resilience during uncertain infrastructure funding cycles.

EBITDA breakeven deferred as ChargePoint invests in innovation

While cash burn was held below $2 million and operating expenses were 12% lower year-over-year, ChargePoint elected to delay its non-GAAP adjusted EBITDA breakeven to prioritize commercialization of upgraded product lines, including the Eaton partnership’s Express DC solution and Flex Plus Europe rollout. The company continues to balance cost control with targeted R&D expenditures during major product transitions, supporting a $212 million inventory.

"Considering these delays and their impact on revenue, we have determined we will be best positioned if we push out our EBITDA breakeven beyond this year. This is to ensure we can fund product innovation and commercialization efforts, which we expect to drive durable revenue growth."
-- Rick Wilmer, Chief Executive Officer

Deferring breakeven in favor of strategic investment underscores intent to defend long-term market share by accelerating innovation, even as short-term revenue visibility remains clouded by external headwinds and project deferrals.

ChargePoint leverages Eaton alliance and targets European growth

The Eaton collaboration, announced in May, now expands ChargePoint’s channel reach and equips it with new hardware for both North America and Europe, aiming to capture secular EV adoption as European EV sales rose 26% year-over-year during the first half of 2025. With new proprietary DC fast charging solutions being launched and inventory positioned for early European deliveries, management anticipates material incremental contribution from this region as product-market fit strengthens across major markets including the UK, France, and Germany.

"We have already introduced our co-branded product, expanded our channel reach, accessed new strategic accounts, and started generating new streams of revenue together. We are delivering innovation, which has been accelerated and expanded because of our partnership with Eaton. The express line of DC charging solutions powered by Eaton and announced last week combines the strength of both companies to deliver more power in less space with massive scalability along with the easiest and fastest installation."
-- Rick Wilmer, Chief Executive Officer

This partnership deepens ChargePoint’s product moat and positions it for higher-margin growth, especially as competitive barriers in software integration and differentiated hardware expand in tandem with accelerating EV adoption in Europe.

Looking ahead

Management guides fiscal 2026 revenue to a range of $90 million to $100 million and reiterates a primary focus on positive cash flow and adjusted EBITDA profitability, though with non-GAAP adjusted EBITDA breakeven now delayed into future quarters. New AC and DC product lines are expected to contribute to hardware margin accretion, with R&D investment expected to taper after the fiscal third quarter 2026 as product launches conclude. No additional long-term revenue or market share guidance was provided beyond the current fiscal year.

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