ChargePoint (CHPT) Q1 2027 Earnings Transcript

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DATE

Wednesday, June 3, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Richard Wilmer
• Chief Financial Officer — Mansi Khetani

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TAKEAWAYS

• Revenue -- $102 million, up 4%, exceeding the top end of guidance and marking the third consecutive period of year-over-year growth.
• Non-GAAP Gross Margin -- 32%, rising 1 percentage point year over year due to pricing discipline and operational efficiencies.
• Subscription Revenue -- $41 million, 40% of total, increasing 7%, driven by an expanding installed base.
• Network Charging Systems Revenue -- $53 million, accounting for 52% of total revenue and growing 2%.
• Other Revenue -- $8 million, representing 8% of total revenue.
• Geographic Revenue Mix -- North America contributed 80%, while Europe provided 20% of total revenue.
• Non-GAAP Operating Expenses -- $54 million, a 4% decrease from the prior year and down from $58 million sequentially.
• Non-GAAP Adjusted EBITDA Loss -- $19 million versus a $23 million loss in the prior year's first quarter.
• Cash Position -- $96 million at quarter end, reflecting customary seasonality and a $20 million nonrecurring cash outflow tied to a prior debt transaction.
• Inventory -- $204 million, down from $215 million in the previous quarter, with further reductions expected as existing commitments are fulfilled.
• Guidance for Next Quarter -- Projected revenue is $100 million to $110 million, suggesting 7% growth at midpoint.
• Key Installed Base Metrics -- 400,000 managed ports (up from 385,000), including 44,600 DC fast chargers and over 145,000 European ports, supporting global access to 1.41 million charging ports.
• Product Development Milestone -- Xpress Solo, providing up to 600 kW to a single vehicle, entered early access phase with full commitment of initial units.
• Software-Only Managed Ports -- Grew to 135,000 from 130,000 sequentially, reflecting broader adoption of ChargePoint software across third-party hardware.
• Operational Efficiency Initiatives -- Non-GAAP operating expenses decreased, and artificial intelligence adoption produced measurable improvements in cost structure.
• New Executive Appointment -- Jyothi Swaroop named Chief Marketing and Growth Officer to spearhead global go-to-market and growth strategies.
• Notable Customer Wins -- Secured the largest transit fleet contract to date with Santa Monica’s Big Blue Bus, expanded deployments with OBE Power, began workplace charging for Citibank, and achieved additional growth with Papillons in Canada.

SUMMARY

Management highlighted that the quarter marked the third consecutive period of year-over-year revenue expansion and continued margin improvement as ChargePoint (NYSE:CHPT) executed its multi-year strategic plan. The company reported that advances in hardware innovation, artificial intelligence deployment, and cost management are positioning it for further margin gains and operating leverage in upcoming quarters. ChargePoint described its business model as capital-light and software-led, emphasizing recurring revenues and scalability across global markets. A new Chief Marketing and Growth Officer was announced to lead global expansion and drive adoption of newly launched hardware such as the Xpress Solo DC charger. Management outlined robust customer interest in its latest solutions, underpinned by expanded strategic partnerships and significant enterprise wins, while reiterating a focus on careful inventory management and the potential for positive operating cash flow as the year progresses.

• Wilmer said, "Early access units are already fully committed reinforcing that Xpress Solo aligns squarely with customer demand for high power, economical, compact, and scalable infrastructure."
• Khetani confirmed, "We expect to materially reduce cash usage through the balance of the year with the potential to generate positive operating cash flow later in the year as we continue to sell through existing inventory and improve adjusted EBITDA."
• The company is deploying AI across software development, customer support, product capabilities, and business processes to accelerate innovation and drive enterprise-wide operating efficiencies.
• Xpress Solo leverages air-cooled thermal management and modular AC/DC conversion, distinguishing it from traditional offerings by improving energy density and site design flexibility.
• Gross margins for new products are expected to reach record levels as their share of total shipments increases, with near-term margins projected to remain stable until these introductions ramp.
• Khetani stated, "we expect R&D to start coming down in the second half of the year as we, see, as we start fulfilling engineering work on the new products, and prototyping costs start coming down."

INDUSTRY GLOSSARY

• DC Fast Charger: High-powered direct current charging equipment designed to deliver rapid electric vehicle charging at significantly higher rates than standard AC chargers.
• Xpress Solo: ChargePoint’s proprietary standalone DC fast charger platform, introduced as the fastest available, capable of delivering up to 600 kW to a single vehicle.
• Managed Ports: Charging points whose operation, maintenance, and analytics are centrally administered through ChargePoint’s software platform, including both proprietary and third-party hardware.
• Software-Only Managed Ports: Third-party charging hardware managed exclusively via ChargePoint’s software, without ChargePoint hardware involvement.

Full Conference Call Transcript

Patrick Hamer: Good afternoon, and thank you for joining us on today's conference call to discuss ChargePoint's first quarter fiscal 27 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 Richard Wilmer, our chief executive officer and Mansi Khetani, our chief financial officer. This afternoon, we issued a press release announcing results for the quarter ended April 30, 2026, which can be found on our website. We would like to remind you that during the conference call, management will make forward looking statements. Including our outlook for the second quarter of fiscal 27.

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 2, 2026 and our earnings release posted today on our website and filed with the SEC on Form 8-K. Also, please note that we use certain non GAAP financial measures on this call.

Which we reconcile to GAAP in our earnings release and for certain historical periods in the investor presentation posted on the investor section of our website. And finally, we will post a transcript of this call on our investor relations website under the quarterly results section. Thank you. I will now turn the call over to our CEO, Richard Wilmer.

Richard Wilmer: Good afternoon, and thank you for joining us. Q1 was a strong start to the fiscal year and an important proof point in ChargePoint's evolution from a business anchored in disciplined operational execution to a business also driving growth. ChargePoint's Q1 revenue was above the top end of our guidance range, extending our return to year over year growth to a third consecutive quarter. We sustained our strong gross margins continued to reduce operating expenses, as well as advanced hardware, software, AI, and partnership initiatives that will define the next phase of this company.

As we enter the third year of our 3 year plan, we have become a stronger, leaner, more focused, platform company that we believe will deliver durable growth. Our model is capital light by design, We sell charging hardware, software, and services to those that want to offer charging services we do not own the charging assets. Our customers own and operate the infrastructure while ChargePoint provides the complete technology platform that powers it. Turning to Q1. We delivered revenue of $102 million above the top end of our guidance range. This reflects improved demand continued customer confidence in our platform, and disciplined execution across the company. It also marks the third consecutive quarter of year over year growth.

Non GAAP gross margin remained strong at 32%, driven by pricing discipline, operational efficiency, and the durability of our software led capital light business model. As our new products enter the market in volume later this year, we expect overall gross margins to increase to new record levels. These gains will be sustainable due to improved cost structures, greater operating leverage, higher value software and services and a business model that becomes increasingly efficient as we scale. We are now 1 quarter into the third year of our 3 year strategic plan. That plan rests on 4 pillars, capital efficient hardware innovation, software leadership, world class driver experiences, and operational excellence.

Year 3 is about driving growth and doing so profitably. We have added a key new executive to put maximum focus on this next phase of our strategy. Jyothi Swaroop has joined ChargePoint as our Chief Marketing and Growth Officer, leading our global go to market and growth strategy. Jyothi brings extensive experience leading global marketing sales and business development, and revenue operations for enterprise technology companies, including Oracle, Dell EMC, Veritas, and DDN. He has built and skilled go to market organizations in highly competitive markets and brings a rare combination of enterprise technology depth, go to market rigor, strategic storytelling, and growth leadership. We are thrilled to have him join the team.

We are seeing renewed customer interest driven by our new products, rising utilization across our installed base, improving market conditions, and customers increasingly favoring scalable, reliable platforms. A central driver of this next phase of growth is Xpress Solo, the world's fastest stand alone DC charger. Xpress Solo delivers up to 600 kW to a single vehicle and is the first product based on our new DC architecture. We believe it is superior to any other solution in the market. Provides approximately 40% higher power density than competing solutions in the industry's smallest footprint. Early access units are already fully committed reinforcing that Xpress Solo aligns squarely with customer demand for high power, economical, compact, and scalable infrastructure.

Alongside product innovation, artificial intelligence is becoming a meaningful advantage for ChargePoint. Not only for our own operations, but increasingly in the software capabilities we deliver to customers. We are deploying AI across 4 major areas. Software development, customer support, AI enabled product capabilities, and business process automation. AI is already producing measurable operational improvements as evidence by our Q1 OpEx performance, and we expect to achieve further OpEx benefits as we continue to aggressively drive enterprise wide adoption of AI. The bigger opportunity is customer-facing. Upcoming product releases will expand the role AI plays in how customers manage, optimize, and monetize charging infrastructure.

We are building AI into our software platform to help customers operate charging infrastructure more intelligently, which means better diagnostics, faster issue resolution, smarter energy management, improved uptime, reduced costs, and better decisions about when and where to expand capacity. And this is all happening at a pace previously unimaginable. We are demonstrably accelerating software delivery through the use of AI. AI at ChargePoint is not theoretical. it is accelerating the pace of innovation, enriching our product offerings, reducing operating expenses, and enabling us to scale revenue without increasing costs. Let me now turn to the broader EV market. We believe the transition to electrified transportation remains inevitable, and new market dynamics are causing the transition to accelerate.

First, the cost advantage of operating an EV compared to an internal combustion vehicle continues to widen as gas prices rise. Second, EV purchase prices continue to converge with internal combustion vehicles. While consumer choice is expanding. Used EVs are now near price parity with comparable gas vehicles and the abundance of used EVs is increasing significantly. Furthermore, new EV models, including offerings under $35 thousand are entering multiple segments. These 2 dynamics are translating directly into increased EV demand. Industry data shows sustained month over month growth in both new and used EV sales, along with rising inquiry volumes on major car shopping platforms.

Europe remains strong where sales of fully electric cars in Europe's main auto markets jumped by almost a third in the first quarter of 26. This is important because once drivers go electric they rarely return to internal combustion. EV retention rates consistently exceed 90%. Every EV sold becomes a long term driver of charging demand. We believe the opportunity ahead is larger than the market currently appreciates, and charging will be embedded into workplaces, retail sites, fleet depots, multi family housing, hospitality locations, commercial facilities, logistics hubs, energy systems, and future autonomous vehicle operations. As AI enabled mobility, autonomous transport, and distributed energy infrastructure scale, reliable charging will become increasingly mission critical.

Notable customer wins in Q1 included securing our largest transit fleet order to date. Delivering DC fast charging solutions to support Santa Monica's big blue bus fleet of e-buses. As part of the transit agency's goal of total electrification by 2032. We also expanded our relationship with OBE Power, to deploy 2.5 thousand charging ports this year at multifamily residences, This is significant because OBE has developed a scalable program featuring charge point solutions at little to no cost to landlords. In Canada, deployed more DC fast charging equipment with ChargePoint operator Papillons And in the USA, we began a relationship with Citibank who selected us to provide their workplace charging solutions.

Our partnership with Eaton remains a significant strategic advantage. We continue to collaborate closely across product development and go to market expanding our reach into new customer segments, and accelerating adoption of next generation AC and DC solutions. There are strong early signals validating the innovation we are bringing to market with Eaton, creating unmatched differentiation. This partnership strengthens our innovation road map while enhancing scale, credibility, and execution velocity. In terms of key performance indicators, including the new ones we introduced last quarter, software only managed ports defined as third party hardware ports managed by ChargePoint software grew to 135 thousand from 130 thousand last quarter.

The share of ports exceeding 30% utilization on at least 1 day in a month which we think is an important leading indicator for expansion demand, remains slightly over 100 thousand AC ports in April 2026. Monthly active users, the equivalent of our user community, slightly increased above 1.48 million active users at the end of April. ChargePoint now manages approximately 400 thousand ports, up from 385 thousand ports last quarter. Including more than 44.6 thousand DC fast chargers, up from 41 thousand more than 145 thousand ports located in Europe, up from 131 thousand. Globally, ChargePoint drivers have access to over 1.41 million public and private charging ports versus 1.37 million last quarter.

In summary, Q1 reinforces that ChargePoint executing against its strategy. Growth has returned. Margins remain strong and will get better. AI is having a multifaceted beneficial impact New products are entering the market soon, The long term market fundamentals continue to strengthen. ChargePoint is becoming a stronger, more focused, more capable company built for the next phase of electrification. Investors should value ChargePoint as a capital light software led platform company with powerful differentiated hardware, recurring software and services, strong partners, operating leverage, and a central role in the energy transition. Thank you for your support. I will now turn the call over to Mansi.

Mansi Khetani: Thanks, Rick. As a reminder, please see our earnings press release where we reconcile our non GAAP results to GAAP. Our principal exclusions are stock based compensation, amortization of intangible assets, and certain costs related to restructuring, settlements, and nonrecurring legal expenses. We believe the non GAAP figures give a better indication of the underlying performance of the business. Revenue for the fourth quarter was $102 million, above our guidance range and up 4% year on year. Q1 marked our third consecutive quarter of year on year revenue growth. Network charging systems, at $53 million, accounted for 52% of first quarter revenue and was up 2% year on year.

Subscription revenue at $41 million, was 40% of total revenue and was up 7% year on year as our total installed base continued to grow. Other revenue at $8 million, was 8% of total revenue. Turning to verticals. Which we report from a billings perspective, First quarter billings percentages were commercial, 71% residential, 8%, fleet, 14%, and other, 7%. In terms of geography, North America made up 80% of revenue, and Europe was 20%. Non GAAP gross margin came in at 32%, up 1 percentage point year on year. Hardware gross margin improved by 1 percentage point year on year, Subscription margin declined to 56% on a GAAP basis, but was above 60% on a non GAAP basis.

This was due to lower subscription revenue in Q1, as well as our decision to use existing inventory for repairs rather than building new replacement units and parts. We expect overall margins to remain around this level in the near term. Non GAAP operating expenses came down to $54 million from $58 million in Q4, and represented a 4% decrease year on year. We remain committed to carefully managing operating expenses and expect further reductions in the second half as engineering efforts on new product introductions taper and prototyping costs begin to normalize. We saw some impact of these trends in Q1 non GAAP OpEx. Non GAAP adjusted EBITDA loss was $19 million.

This compares with a loss of $23 million in the first quarter of last year. Stock based compensation was $11 million, down from $18 million year on year. Our inventory $204 million from $215 million in the prior quarter. We expect that inventory balance will continue to go down over the year freeing up cash. We ended the quarter with $96 million in cash. While Q1 tends to be the quarter with the highest cash usage, due to the timing of some large annual payments that typically occur in Q1, This quarter, we also had approximately $20 million of nonrecurring cash payments including the final payment that was due as part of the debt transaction we announced back in November.

We expect to materially reduce cash usage through the balance of the year with the potential to generate positive operating cash flow later in the year as we continue to sell through existing inventory and improve adjusted EBITDA. Turning to guidance. For the second quarter of fiscal 27, we expect revenue to be $100 million to $110 million representing 7% year on year growth at the midpoint. Looking ahead, we remain laser focused on delivering continued revenue growth, improving operating leverage, and accelerating our path to profitability. With that, we will open the call for questions.

Operator: We will now begin the question and answer session. If you would like to ask a question, please press 1. To raise your hand. To withdraw your question, press 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Colin Rusch. Of Oppenheimer. Your line is open. Please go ahead.

Colin Rusch: Thanks so much guys and congratulations on the progress. You know, I wanted to talk a little bit about the product road map from here. You know, obviously, getting Express Solo launched some traction on that in the market is very helpful. You have gone through the redesign of the portfolio. But I am curious about some of the opportunity with autonomous mobile robots, even some of the bidirectional IP that you have being applied into solid state transformers.

Richard Wilmer: How you are thinking about expanding the portfolio potentially, particularly given the relationship with Eaton. Yeah, Colin, very good questions and you are on a lot of topics that we think about regularly. We have been very focused on understanding the unique charging requirements for autonomous vehicles, and I am pleased with the progress we have made in gaining that understanding. And we have got some specific developments underway to address those needs. On solid state transformers, stay tuned for news there. that is clearly an area of active opportunity for us. And then on the Xpress product roadmap, Solo is just the first iteration of that product.

There are multiple derivative versions that serve different use cases and expand capacity that will be coming out over the next 18 months as we fully build out a product portfolio around that architecture.

Colin Rusch: that is super helpful. I will ask some detailed questions offline. But I will let's shift over to the balance sheet. Mansi the working capital management this quarter looked like a pretty substantial progress for you guys. Could you talk about the cadence around inventory reduction from here? You know, it is something that is been in the offing to see the progress this quarter was encouraging. Just want to get a sense of how we should think about that as we go through the balance of the calendar year.

Mansi Khetani: Yeah. So we saw a nice reduction in inventory from Q4, down from $215 million to about $204 million. I believe that inventory will continue to reduce from this level because as we had mentioned before, we had, you know, pre commitments with the contract manufacturers. We are working through most of those And that is 1 of the biggest reasons why we saw inventory come down in Q4. And so this reduction of inventory and the progress we have made we expect will continue through the rest of this year.

Colin Rusch: Excellent. The final 1 for me is just, you know, on the supply chain side, obviously, with the redesigned products, you have targeted some lower cost components and looked at the supply chain. I am just wondering if there is more opportunity, you know, just in terms of some of the component availability here or if we should be thinking about increased tightness just given some of the shifts in the global economy. As we move into the balance of, you know, calendar 2026 and into 2027?

Richard Wilmer: Yeah. I think from a supply chain standpoint, things look pretty good for us. We have got you know, our new products are designed with a much higher focus on low cost Xpresso is a perfect example. There will be additional products that exemplify that commitment to low product cost as we announce them moving into the future. From a supply chain standpoint, the 1 thing we are seeing is pressure on memory for sure as a result of the data center build out. We have done a good job of navigating that. We have got adequate supply, but we are seeing some increases in pricing that we need to offset with reductions in other parts of the product.

Colin Rusch: Excellent. Thanks so much, guys.

Operator: Your next question comes from the line of Mark Delaney. Of Goldman Sachs. Your line is open. Please go ahead.

Mark Delaney: Yes. Good afternoon. Thank you very much for taking the questions. Starting with 1 on the top line, you commented on the better momentum in year-over-year growth continuing in the quarter. Maybe you could talk about what your expectation is about the ability to sustain the better volume growth beyond the first half. You spoke on some of the metrics you monitor like utilization rates on your installed base, some of the partnerships. So what does it all mean for your ability to sustain the recent revenue momentum?

Richard Wilmer: Yeah. I think from a market standpoint, Mark, it is being fueled by, you know, the dynamics I talked about in the prepared remarks regarding, you know, the overall EV market, you know, starting to move forward here in the US, largely a result of gas prices being so high A lot of used EVs coming into the market coming off lease. that are at good price points We also see a lot of strength in Europe from a macro perspective, which is helping us.

And then from a internal perspective, we move into the second half of the year, and the Xpress product goes into production, we definitely expect that to start driving growth in both Europe and North America.

Mark Delaney: Understood. And then you made a comment, Rick, about trying to take the products and maybe find new growth factors But, Mansi you also talked about finding some OpEx efficiencies. So maybe help us better understand how it is going to manage its efforts to expand the product set and perhaps go after some of these new markets and the potential cost to do so?

Richard Wilmer: Yeah. So in terms of new markets, Xpress is the first DC product we have ever built that is intended to serve the needs in Europe. So that will be all new for us from a DC standpoint, and I mentioned in the prepared remarks that the early access units were committed. A bunch of those are committed in Europe to our customers that we already have largely as part of our B Energized offering there. Our software platform offering. So very optimistic about the potential for Europe. And then here in North America, you know, there is plenty of demand from existing customers for DC build outs.

And then I think we have got the opportunity to capture new customers because of how differentiated Xpress Solo is versus the competitors' offerings.

Mark Delaney: Okay. And this is just on gross margin. You spoke about some of the new products having gross margins embedded into them. I think, potentially, it could be the best margins the company has seen in the comments you made. But then, Mansi you also spoke about at least a temporary headwind around product mix in the subscription part of the business. So maybe help tie that all together and how investors should be thinking about the gross margin trajectory both in the near and then over the medium term and what sort of level gross margins might be able to reach? Thanks.

Mansi Khetani: Yeah. So in the near term, I think the margins would remain similar to Q1. Obviously, there is, you know, the mix impact so the hardware margin may go up or down a little bit. On the subscription margin side, I covered in the prepared remarks, why we saw a little bit of a reduction. It was a deliberate decision to start using our existing inventory instead of spending additional cash to repair and refurbish parts. And so that is going to impact margins a little bit. Again, the dollar value is really low. The margin percentages get impacted because of that. So we expect that trend to continue.

So result that results in, near term margins being similar to where they are now. However, as Rick mentioned, as the new products come in, which will be towards the end of this year, but more meaningful in terms of volume next year, that is when we will start seeing a step increase in gross margins.

Mark Delaney: Thank you.

Operator: Your next question comes from the line of Itay Michaeli. Of TD Cowen. Line is open. Please go ahead.

Itay Michaeli: Great. Thank you, everyone. Just a couple of follow ups from the prior questions. First, I think there is a mention of potential for positive operating cash flow later in the year. Just hoping we could drill a bit more into that in terms of how much of that might be kind of the inventory release versus OpEx and gross margin and of course, revenue growth as well?

Mansi Khetani: Yeah. it is all of the above. So inventory, we as I mentioned, to start coming down, so that should release working capital. We expect EBITDA loss to improve through the year through revenue growth as well as OpEx management. That should that should help cash from operations to get better as well.

Itay Michaeli: Got it. that is helpful. And just on the quarter, itself, with revenue coming in a little bit above the prior range. Just curious kind of where the upside came in specifically kind of versus your internal expectations last quarter?

Richard Wilmer: I think it was across the board. We saw you know, we mentioned the Big Blue Bus deal in Santa Monica on fleet. That was a nice win for us. So we have seen good business in fleet. Commercial, obviously, is a strong market segment for us, and we have seen that continue to move forward with expansion business as well as new wins. And then home sales also performed reasonably well. In Q1.

Itay Michaeli: Perfect. And just lastly, just with some of the new products and new investments including into the new market expansion, Is the current rate of rate of R&D appropriate for us to sort of model going forward? Or could you see maybe a bit of an uptick as you pursue some of this growth?

Mansi Khetani: Actually, we expect R&D to start coming down in the second half of the year as we, see, as we start fulfilling engineering work on the new products, and prototyping costs start coming down. We are also as Rick mentioned in his prepared remarks, seeing a lot of efficiency from the use of AI, which we think will also help us bring our R&D cost down.

Itay Michaeli: that is all very helpful. Thank you.

Operator: If you would like to ask a question, please press star 1 to raise your hand. Withdraw your question, press *1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Your next question comes from Chris Dandrinos of RBC Capital Markets. Your line is open. Please go ahead.

Chris Stringinos: Yeah. Thank you. I guess I just wanted to follow-up here on the inventory commentary. And I guess I am curious how you are thinking about management as you move into some of the product launches later this year? And is there any kind of risk of I do not know if it is stranded inventory or obsolete inventory how you are thinking about that. Thanks.

Richard Wilmer: Mansi had earlier around using, you know, new inventory field replacements is exactly along that theme of managing the wind down of the existing inventory such that there is very little left by the time new products that would obsolete existing products start to ramp into production. So as we look at our forecasts and our inventory positions as we get closer to that transition point, the fidelity of that analysis gets more refined.

And for example, we made a decision on some products to use inventory we have today to replace field units that failed rather than refurb units that were coming back from the field because we did not want to build any further inventory with the forecast we now have in place to drill all that inventory down to very low levels as the new products come into play.

Chris Stringinos: Got it. Thank you. I apologize. I apologize for so much background noise. But maybe just following up the this is more of a bigger picture question on the competitive market dynamics. You all are, you know, doing a good job kind of scaling and, you know, launching new products. I guess, how do you think about the market today from a competitive standpoint and sort of where you sit? And are you seeing, you know, competitors come to the table with innovation as well and just overall, how you think about that? Thank you.

Richard Wilmer: Yeah. I think on the DC fast charger side where our Xpress Solo is squarely focused, obviously, we have seen some new announcements. And I have been pleased with all of them because our product is better, and I can explain why. If anybody's curious. So that is been good news. I think in general, you know, you are continuing to see you know, consolidation happening. We are always paying attention, but there is clearly you know, changes coming as we move forward in the industry.

Chris Stringinos: Got it. I guess maybe I will bite. Can you explain why the product's better?

Richard Wilmer: Thanks, Yeah. Yeah. there is 3 reasons. You know, there is 2 major architectural reasons that lead to the most important reason. Number 1 is our approach to thermal management. You have got a choice between a liquid cooled system or an air cooled system. Liquid cooling creates a whole bunch of additional cost makes the product larger, and it has catastrophic points of failure. If your cooling system fails, your whole charger fails. The alternative approach is an air cooled system, which is what we have implemented.

The challenge there is to make the design of the product last for well over 10 years with high power silicon carbide power electronics with an air cooled solution we have mastered that. So that is a big architectural advantage that we have in our product. There are other DC chargers that are air cooled. So this has been a validated approach in the industry. The second approach or architectural differences that we separated the AC to DC conversion. So power comes off the grid as AC power. We convert that to DC. Then we have a separate stage of conversion that converts that DC power to the DC voltage that the car needs and wants.

We have separated that into 2 separate modules. That is different than what is been built traditionally, where all the AC to DC and DC-to-DC conversion has been put into 1 combined module. We have separated those. That provides tremendous advantages in terms of future iterations of this product. For example, a DC only version that could be built out on a DC grid provided by Eaton that dramatically reduces the capital cost and the energy density of the charger. There are other benefits to it. For example, there is a DC grid in the middle of the charger that connects the AC to DC and the DC-to-DC conversion.

You can now put multiple versions of this charger back to back and connect them through that DC grid and pull the energy And if, for example, put 3 of these together, you could deliver 1.8 MW through 1 port on a charger. So there is a lot more advantages but, in the end, the most profound advantage is aerial energy density. We are able to get 600 kW of energy into a foot than the leading 400 kW charger that is on the market today.

And real estate matters when it comes to site design flexibility, the cost of real estate, the ability to plan sites for the future, having a very compact charger delivering this much power is a real competitive advantage.

Chris Stringinos: Got it. Thank you very much.

Operator: We have reached the end of the Q&A session. This concludes today's call. Thank you for attending. You may now disconnect.

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