Company Overview and History
EVgo Inc. (NASDAQ:EVGO) is one of the nation's leading public fast charging networks for electric vehicles (EVs), strategically deploying localized and accessible charging infrastructure across the United States. The company's core business is building, owning, and operating EV fast charging sites that deliver charging services to individual consumers, commercial drivers, and fleet operators.
EVgo's journey began in October 2010 when it was formed as NRG EV Services, LLC, a wholly owned subsidiary of NRG Energy, Inc., an integrated power company based in Houston, Texas. The company underwent significant ownership changes over the years, with Vision Ridge Partners acquiring a majority interest in June 2016. In January 2020, EVgo Holdco, LLC, a subsidiary of LS Power, completed the acquisition of EVgo Services, resulting in a change of control.
The company's current structure is the result of a business combination that took place on July 1, 2021. EVgo Inc. was originally incorporated in Delaware on August 4, 2020, as Climate Change Crisis Real Impact I Acquisition Corporation (CRIS), a special purpose acquisition company. CRIS completed its initial public offering on October 2, 2020, and subsequently consummated the business combination with EVgo on July 1, 2021.
Following the business combination, EVgo adopted an Up-C structure, where the business operations are held by EVgo OpCo and continue to operate through the subsidiaries of EVgo Holdco. EVgo Inc.'s primary assets consist of equity interests in Thunder Sub, which in turn holds common units in EVgo OpCo.
In May 2023, EVgo further solidified its financial position through an underwritten equity offering, in which EVgo Member Holdings, LLC, an affiliate of the company's controlling stockholder, purchased 5.88 million shares of Class A common stock. More recently, on December 16, 2024, EVgo Inc. entered into a stock and unit purchase agreement with EVgo OpCo and EVgo Holdings, agreeing to redeem 23 million units of EVgo OpCo Units and 23 million shares of Class B common stock in exchange for 23 million newly issued shares of EVgo Inc.'s Class A common stock.
EVgo's Resilient Business Model Amid Industry Challenges
EVgo's financial and operational performance has been remarkably resilient, even in the face of broader industry challenges. During the year ended December 31, 2024, the company reported total revenue of $256.8 million, representing a 60% year-over-year increase. This robust growth was primarily driven by a 110% surge in charging network revenue, which reached a record $155.7 million.
This impressive revenue growth can be attributed to EVgo's focus on maximizing utilization across its charging network, rather than solely pursuing expansion. The company's network throughput on the public network reached 277 gigawatt-hours (GWh) in 2024, a 116% increase compared to the prior year. This significant increase in throughput was achieved despite the broader industry experiencing a slowdown in new electric vehicle sales, demonstrating the resilience of EVgo's business model.
Leveraging Partnerships and Technological Advancements
EVgo's success can be attributed to its strategic partnerships with leading automotive original equipment manufacturers (OEMs) and its commitment to technological innovation. The company has established long-standing relationships with OEMs such as GM, Honda, Nissan, and Toyota, which have helped it access new customers and build brand awareness through co-marketing initiatives.
Moreover, EVgo has been at the forefront of technological advancements in the EV charging industry. In 2024, the company entered into a joint development agreement with Delta Electronics to co-develop the next generation of its charging architecture, which is expected to result in a 30% reduction in gross capital expenditures per stall.
Diversified Revenue Streams and Expanding Footprint
EVgo operates across several key business lines, providing a diverse range of revenue streams:
1. Charging, Retail: EVgo sells electricity directly to EV drivers through its public charging network, offering various pricing plans including subscriptions and pay-as-you-go options.
2. Charging, Commercial: The company provides charging services to high-volume fleet customers, such as transportation network companies and delivery services.
3. Charging, OEM: EVgo contracts with automobile manufacturers to provide charging services to their EV drivers, along with co-marketing, data services, and digital application services.
4. Regulatory Credit Sales: The company earns and sells regulatory credits, such as Low Carbon Fuel Standard (LCFS) credits, based on the volume of electricity sold through its network.
5. Network, OEM: This revenue stream comes from OEM partners for significant charger infrastructure build programs.
6. eXtend: EVgo provides hardware, design, construction services, and ongoing operations and maintenance solutions for charging sites owned by customers.
7. Ancillary: The company offers dedicated charging solutions to fleets and various software-driven digital, development, and operations services.
In addition to its core charging network revenue, EVgo has diversified its revenue streams through its eXtend business, which provided hardware, design, and construction services for charging sites, as well as ongoing operations, maintenance, and networking solutions. The eXtend business contributed $86.6 million in revenue during 2024, representing a 20% year-over-year increase.
EVgo has also been expanding its footprint, adding a record 480 new operational stalls in the fourth quarter of 2024, including both public and dedicated stalls. As of the end of 2024, the company had over 4,000 operational stalls, a 37% increase compared to the prior year.
Financials
EVgo's financial performance has been impressive, with total revenue reaching $256.8 million in 2024, a 60% increase from the previous year. The company's charging network revenue, which is its core business, grew by 110% to $155.7 million. The eXtend business also contributed significantly, generating $86.6 million in revenue, a 20% year-over-year increase.
For the most recent fiscal year (2024), EVgo reported: - Revenue: $256.82 million - Net Income: -$126.70 million - Operating Cash Flow: -$7.26 million - Free Cash Flow: -$102.04 million
In the most recent quarter (Q4 2024), the company reported: - Revenue: $67.51 million - Net Income: -$40.37 million - Year-over-Year Growth: Revenue grew 35% compared to Q4 2023, with strong charging revenue partially offset by $4 million of eXtend revenue delayed into Q1 2025.
Despite the top-line growth, EVgo continues to report operating losses, with an operating loss of $131.6 million in 2024, although this represents a 14% improvement from the prior year. The company's focus on expanding its charging network and investing in technology and infrastructure to support its various service offerings has resulted in ongoing expenses that have outpaced revenue generation to date.
Liquidity
To support its continued growth, EVgo closed a $1.25 billion guaranteed loan facility from the U.S. Department of Energy (DOE) Loan Programs Office in December 2024. This financing will enable the company to more than triple its installed base of fast charging stalls to over 10,000 within the next five years.
As of December 31, 2024, EVgo's liquidity position was as follows: - Debt/Equity Ratio: 0.20 - Cash and Restricted Cash: $120.51 million - Current Ratio: 1.84 - Quick Ratio: 1.84
Strengthening Financial Position and Outlook
Looking ahead, EVgo has provided guidance for 2025, expecting total revenues in the range of $340 million to $380 million and targeting adjusted EBITDA breakeven, with a range of negative $5 million to positive $10 million. The company's focus on operational efficiency and cost management is expected to drive further improvements in its financial performance.
Additional guidance for 2025 includes: - Charging network revenue is expected to comprise approximately two-thirds of total 2025 revenue, with sequential quarterly growth throughout the year. - eXtend revenues are projected to be roughly flat compared to 2024, with growth in the second half of the year. - Ancillary revenues are expected to grow, with most of the growth coming in Q4 2025, driven by the dedicated business. - Total adjusted gross profit and adjusted G&A as a percentage of revenue are expected to improve, driving bottom-line adjusted EBITDA improvement. - Fiscal CapEx net of offsets is expected to be in the range of $160 million to $180 million.
Industry Trends and Market Position
The electric vehicle market continues to grow rapidly, with EV sales in the US increasing over 200% since 2021. The demand for public fast charging infrastructure is also increasing, with EV charging throughput on EVgo's network growing almost 1,000% since 2021, outpacing EV VIO growth.
EVgo is well-positioned in this growing market, operating over 1,100 fast charging stations across more than 40 states. The company partners with businesses across the U.S., including retailers, grocery stores, restaurants, and others, to deploy charging infrastructure. This strategic approach has allowed EVgo to establish a strong presence in key markets and capitalize on the increasing demand for EV charging solutions.
Conclusion
EVgo's resilient business model, strategic partnerships, and technological advancements have positioned the company as a leading player in the rapidly evolving EV charging infrastructure space. Despite broader industry challenges, the company has demonstrated its ability to drive strong revenue growth and improve its financial position, making it a compelling investment opportunity in the clean energy transition. With a diverse product portfolio, expanding footprint, and strong financial backing, EVgo is well-positioned to capitalize on the growing demand for EV charging infrastructure and services in the coming years.