EVgo Inc

Previous wording

The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of EVgo’s consolidated results of operations and financial condition. The discussion should be read in conjunction with EVgo’s unaudited condensed consolidated financial statements and the related notes thereto as of March 31, 2024 and December 31, 2023 and for the three months ended March 31, 2024 and 2023 included elsewhere in this Quarterly Report, and the audited consolidated financial statements and related notes thereto as of and for the years ended December 31, 2023 and 2022 contained in the Annual Report. In addition to historical information, this discussion contains forward-looking statements that involve numerous risks, uncertainties, and assumptions that could cause EVgo’s actual results to differ materially from management’s expectations due to a number of factors, including those discussed in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” in this Quarterly Report.

Current wording

The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of EVgo’s consolidated results of operations and financial condition. The discussion should be read in conjunction with EVgo’s unaudited condensed consolidated financial statements and the related notes thereto as of June 30, 2024 and December 31, 2023 and for the three and six months ended June 30, 2024 and 2023 included elsewhere in this Quarterly Report, and the audited consolidated financial statements and related notes thereto as of and for the years ended December 31, 2023 and 2022 contained in the Company’s Annual Report on Form 10-K. In addition to historical information, this discussion contains forward-looking statements that involve numerous risks, uncertainties, and assumptions that could cause EVgo’s actual results to differ materially from management’s expectations due to a number of factors, including those discussed in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” in this Quarterly Report.

Previous wording

EVgo is a leader in EV charging solutions, building and operating the infrastructure and tools to expedite the mass adoption of EVs for individual drivers, rideshare and commercial fleets, and businesses. EVgo is one of the nation’s largest public fast charging networks, featuring over 1,000 fast charging locations across more than 35 states, including stations built through EVgo eXtend, its white label service offering. EVgo is accelerating transportation electrification through partnerships with automakers, fleet and rideshare operators, retail hosts such as grocery stores, shopping centers, and gas stations, policy leaders, and other organizations.

Current wording

EVgo is a leader in EV charging solutions, building and operating the infrastructure and tools to expedite the mass adoption of EVs for individual drivers, rideshare and commercial fleets, and businesses. EVgo is one of the nation’s largest public fast charging networks, featuring over 1,000 fast charging locations across more than 35 states, including stations built through EVgo eXtend, its white label service offering. EVgo is expected to accelerate transportation electrification through partnerships with automakers, fleet and rideshare operators, retail hosts such as grocery stores, shopping centers, and gas stations, policy leaders, and other organizations.

Previous wording

the broader Middle East region have led to disruptions, instability and volatility in global markets and industries and will likely continue to lead to, geopolitical instability, market uncertainty and supply disruptions. Additionally, recent inflationary pressures have resulted in and may continue to result in increases to the costs of charging equipment and personnel, which could in turn cause capital expenditures and operating costs to rise. Sustained levels of high inflation have likewise caused the U.S. Federal Reserve and other central banks to increase interest rates, which could have the effects of raising the cost of capital and depressing economic growth.

Current wording

the broader Middle East region have led to disruptions, instability and volatility in global markets and industries and will likely continue to lead to, geopolitical instability, market uncertainty and supply disruptions. Additionally, recent inflationary pressures have resulted in and may continue to result in increases to the costs of charging equipment and personnel, which could in turn cause capital expenditures and operating costs to rise. Notwithstanding the current easing of inflation and general improvement in the macroeconomic environment, EVgo remains vigilant of factors that may have the effects of raising the cost of capital and depressing economic growth.

Previous wording

*Charging Revenue, Retail.*Charging revenue, retail, for the three months ended March 31, 2024 increased $11.7 million, or 177%, to $18.3 million compared to $6.6 million for the three months ended March 31, 2023. Period-over-period growth was primarily due to an overall increase in throughput driven primarily by increased charging volume from a greater number of customers and more throughput per customer.

Current wording

*Charging Revenue, Retail.*Charging revenue, retail, for the three months ended June 30, 2024 increased $13.3 million, or 146%, to $22.3 million compared to $9.1 million for the three months ended June 30, 2023. Period-over-period growth was primarily due to an overall increase in throughput driven primarily by increased charging volume from a greater number of customers and more throughput per customer.

Previous wording

Charging Revenue, Commercial. Charging revenue, commercial, for the three months ended March 31, 2024 increased $4.1 million, or 240%, to $5.8 million compared to $1.7 million for the three months ended March 31, 2023. Period-over-period growth was primarily due to higher charging volumes by the Company’s public fleet customers.

Current wording

Charging Revenue, Commercial. Charging revenue, commercial, for the three months ended June 30, 2024 increased $4.7 million, or 193%, to $7.1 million compared to $2.4 million for the three months ended June 30, 2023. Period-over-period growth was primarily due to higher charging volumes by the Company’s public fleet customers.

Previous wording

*Charging Revenue, OEM.*Charging revenue, OEM, for the three months ended March 31, 2024 increased $2.2 million, or 395%, to $2.7 million compared to $0.6 million for the three months ended March 31, 2023. Period-over-period growth was primarily due to an increase in active OEM customers and increased throughput per customer.

Current wording

*Charging Revenue, OEM.*Charging revenue, OEM, for the three months ended June 30, 2024 increased $2.7 million, or 269%, to $3.6 million compared to $1.0 million for the three months ended June 30, 2023. Period-over-period growth was primarily due to an increase in active OEM customers and increased throughput per customer.

Previous wording

*Regulatory Credit Sales.*Regulatory credit sales for the three months ended March 31, 2024 increased $0.8 million, or 67%, to $2.0 million compared to $1.2 million for the three months ended March 31, 2023 due to the impact of increased throughput.

Current wording

*Regulatory Credit Sales.*Regulatory credit sales for the three months ended June 30, 2024 increased $0.1 million, or 8%, to $1.7 million compared to $1.6 million for the three months ended June 30, 2023 due to the impact of increased throughput, partially offset by decreased market prices.

Previous wording

*Network Revenue, OEM.*Network revenue, OEM, for the three months ended March 31, 2024 increased $0.7 million, or 27%, to $3.4 million compared to $2.7 million for the three months ended March 31, 2023. The period-over-period increase was due to increased marketing activities and membership fees from OEM customers.

Current wording

*Network Revenue, OEM.*Network revenue, OEM, for the three months ended June 30, 2024 increased $0.9 million, or 119%, to $1.6 million compared to $0.7 million for the three months ended June 30, 2023. The period-over-period increase was due to increased membership fees and marketing activities from OEM customers.

Previous wording

*Ancillary Revenue.*Ancillary revenue for the three months ended March 31, 2024 increased $1.4 million, or 65%, to $3.7 million compared to $2.2 million for the three months ended March 31, 2023. The increase was primarily due to increased revenue from equipment sales, and engineering and construction revenue.

Current wording

*Ancillary Revenue.*Ancillary revenue for the three months ended June 30, 2024 increased $0.1 million, or 3%, to $2.5 million compared to $2.4 million for the three months ended June 30, 2023. The increase was primarily due to increased revenue from engineering and construction and licensing, partially offset by decreased revenue from equipment sales and research and consulting.

Previous wording

Charging Network. Charging network cost of sales for the three months ended March 31, 2024 increased $9.5 million, or 96% to $19.5 million compared to $10.0 million for the three months ended March 31, 2023. The increase in charging network cost was primarily due to a $6.7 million increase in usage-related energy costs resulting from increased throughput and a $2.8 million increase in fixed charging costs.

Current wording

Charging Network. Charging network cost of sales for the three months ended June 30, 2024 increased $12.0 million, or 100%, to $24.0 million compared to $12.0 million for the three months ended June 30, 2023. The increase in charging network cost was primarily due to a $8.3 million increase in usage-related energy costs resulting from increased throughput and a $3.7 million increase in fixed charging costs.

Previous wording

Depreciation, Net of Capital-Build Amortization. Depreciation, net of capital-build amortization, for the three months ended March 31, 2024 increased $4.0 million, or 63%, to $10.4 million compared to $6.3 million for the three months ended March 31, 2023 due to the growth of EVgo’s charging network.

Current wording

Depreciation, Net of Capital-Build Amortization. Depreciation, net of capital-build amortization, for the three months ended June 30, 2024 increased $3.9 million, or 53%, to $11.1 million compared to $7.3 million for the three months ended June 30, 2023 due to the growth of EVgo’s charging network.

Previous wording

*General and Administrative Expenses.*General and administrative expenses for the three months ended March 31, 2024 decreased $3.7 million, or 10%, to $34.2 million compared to $37.9 million for the three months ended March 31, 2023. The decrease was primarily driven by a $1.3 million decrease in fees for professional services, a $1.1 million decrease in impairment expenses, and a $0.8 million decrease in payroll expenses.

Current wording

*General and Administrative Expenses.*General and administrative expenses for the three months ended June 30, 2024 decreased $0.5 million, or 1%, to $33.8 million compared to $34.3 million for the three months ended June 30, 2023. The decrease was primarily driven by a $1.5 million decrease in payroll expenses, partially offset by a $0.9 million increase in loss on disposals.

Previous wording

*Depreciation, Amortization and Accretion.*Depreciation, amortization and accretion expenses for the three months ended March 31, 2024 increased $0.2 million, or 4%, to $5.0 million compared to $4.8 million for the three months ended March 31, 2023. The increase was primarily due to an increase in amortization related to software, partially offset by decreased amortization of intangible assets.

Current wording

*Depreciation, Amortization and Accretion.*Depreciation, amortization and accretion expenses for the three months ended June 30, 2024 increased $0.2 million, or 4%, to $5.0 million compared to $4.8 million for the three months ended June 30, 2023. The increase was primarily due to increased amortization related to software, partially offset by decreased amortization of intangible assets.

Previous wording

During the three months ended March 31, 2024, EVgo had an operating loss of $32.4 million, an improvement of $10.3 million, or 24%, compared to $42.6 million for the three months ended March 31, 2023. The decrease in operating loss was driven primarily by an increase in gross profit and decreased general and administrative expenses. Operating margin for the three months ended March 31, 2024 was negative 58.7% compared to negative 168.5% for the three months ended March 31, 2023 primarily due to improved leveraging of operating expenses and improved gross margin.

Current wording

During the three months ended June 30, 2024, EVgo had an operating loss of $32.4 million, a decrease of $1.2 million, or 4%, compared to $33.6 million for the three months ended June 30, 2023. The decrease in operating loss was driven primarily by an increase in gross profit and decreased general and administrative expenses. Operating margin for the three months ended June 30, 2024 was negative 48.6% compared to negative 66.4% for the three months ended June 30, 2023 primarily due to improved leveraging of operating expenses and improved gross margin.

Previous wording

Interest income for the three months ended March 31, 2024 increased $0.3 million, or 14%, to $2.3 million compared to $2.0 million for the three months ended March 31, 2023. The increase was due to more cash and cash equivalents held in a high interest rate account by the Company during the three months ended March 31, 2024 compared to the same prior-year period.

Current wording

Interest income for the three months ended June 30, 2024 decreased $0.1 million, or 6%, to $2.1 million compared to $2.2 million for the three months ended June 30, 2023. The decrease was due to less cash and cash equivalents held in a high interest rate account by the Company during the three months ended June 30, 2024 compared to the same prior year period.

Previous wording

Other (expense) income, net, for the three months ended March 31, 2024 and 2023 was de minimis.

Current wording

Other expense, net, for the three months ended June 30, 2024 and 2023 was de minimis.

Previous wording

For the three months ended March 31, 2024, there was a $1.9 million gain on change in fair values of warrant and earnout liabilities compared to an $8.4 million loss for the three months ended March 31, 2023. The change between periods was primarily due to a decrease in the fair value of the warrant and earnout liabilities during the three months ended March 31, 2024 compared to an increase during the same prior-year period. See “Part I, Item 1. Financial Statements – Note 10 – Fair Value Measurements” for more information.

Current wording

For the three months ended June 30, 2024, there was a $0.8 million gain resulting from the change in fair values of warrant and earnout liabilities compared to a $9.9 million gain for the three months ended June 30, 2023. The change between periods was primarily due to a lower decrease in the fair value of the warrant and earnout liabilities during the three months ended June 30, 2024 compared to the same prior year period. See “Part I, Item 1. Financial Statements – Note 10 – Fair Value Measurements” for more information.

Previous wording

For the three months ended March 31, 2024 and 2023, EVgo’s income taxes and effective tax rates were de minimis.

Current wording

For the three months ended June 30, 2024 and 2023, EVgo’s income taxes and effective tax rates were de minimis. As of June 30, 2024 and 2023, EVgo maintained a full valuation allowance on EVgo’s net deferred tax assets.

Previous wording

Total revenue for the three months ended March 31, 2024 increased $29.9 million, or 118%, to $55.2 million compared to $25.3 million for the three months ended March 31, 2023. As further discussed below, the increase in revenue was primarily due toan $11.7 million increase in retail charging revenue, an $8.9 million increase in eXtend revenue, a $4.1 million increase in commercial charging revenue, and a $2.2 million increase in OEM charging revenue.

Current wording

Total revenue for the six months ended June 30, 2024 increased $45.9 million, or 61%, to $121.8 million compared to $75.9 million for the six months ended June 30, 2023. As further discussed below, the increase in revenue was primarily due to a $25.0 million increase in retail charging revenue, an $8.8 million increase in commercial charging revenue, a $4.8 million increase in OEM charging revenue, and a $3.2 million increase in eXtend revenue.

Previous wording

eXtend Revenue. eXtend revenue for the three months ended March 31, 2024 increased $8.9 million, or 86%, to $19.2 million compared to $10.3 million for the three months ended March 31, 2023. The increase was primarily due to an increase in equipment sales and increased projects in process or completed compared to the same prior year period.

Current wording

eXtend Revenue. eXtend revenue for the six months ended June 30, 2024 increased $3.2 million, or 7%, to $46.8 million compared to $43.6 million for the six months ended June 30, 2023. The increase was primarily due to an increase in construction projects in process or completed, partially offset by decreased equipment sales, compared to the same prior year period.

Previous wording

Other. Other cost of sales for the three months ended March 31, 2024 increased $9.5 million, or 106%, to $18.4 million compared to $8.9 million for the three months ended March 31, 2023. The increase in other cost of sales was primarily due to an increase of $8.2 million in costs to support eXtend revenue and an increase of $1.3 million in costs to support ancillary revenue**.**

Current wording

Other. Other cost of sales for the six months ended June 30, 2024 increased $8.9 million, or 26%, to $43.5 million compared to $34.7 million for the six months ended June 30, 2023. The increase in other cost of sales was primarily due to an increase of $7.3 million in costs to support eXtend revenue and an increase of $1.2 million in costs to support ancillary revenue**.**

Previous wording

Gross profit for the three months ended March 31, 2024 was $6.8 million compared to approximately break even for the three months ended March 31, 2023 primarily due to increased gross profit from charging revenues, partially offset by increased depreciation, net of capital-build amortization. Gross margin for the three months ended March 31, 2024 was 12.4% compared to 0.2% for the three months ended March 31, 2023 primarily due to higher margins on charging revenue resulting from improved leveraging of charging station costs, partially offset by lower margins from eXtend and ancillary revenues.

Current wording

Gross profit for the six months ended June 30, 2024 increased to $13.2 million compared to $5.6 million for the six months ended June 30, 2023 primarily due to increased gross profit from charging revenues, partially offset by increased depreciation, net of capital-build amortization. Gross margin for the six months ended June 30, 2024 was 10.9% compared to 7.3% for the six months ended June 30, 2023 primarily due to higher margins on charging revenue resulting from improved leveraging of charging station costs, partially offset by lower margins from eXtend revenues resulting in a mix

Previous wording

Net loss for the three months ended March 31, 2024 was $28.2 million, compared to a net loss of $49.1 million for the three months ended March 31, 2023. The change was primarily driven by a $10.4 million impact from changes in the fair values of the warrant and earnout liabilities, increased gross profit of $6.8 million, and a $3.7 million decrease in general and administrative expenses.

Current wording

Net loss for the six months ended June 30, 2024 was $57.8 million, compared to a net loss of $70.6 million for the six months ended June 30, 2023. The change was primarily driven by increased gross profit of $7.7 million, a $4.2 million decrease in general and administrative expenses, and a $1.3 million impact from changes in the fair values of the warrant and earnout liabilities.

Previous wording

Margin,” “Adjusted General and Administrative Expenses,” “Adjusted General and Administrative Expenses as a Percentage of Revenue,” “EBITDA,” “EBITDA Margin,” “Adjusted EBITDA,” “Adjusted EBITDA Margin,” and “Capital Expenditures, Net of Capital Offsets.” With respect to Capital Expenditures, Net of Capital Offsets, pursuant to the terms of certain OEM contracts, EVgo is paid well in advance of when revenue can be recognized, and usually, the payment is tied to the number of stalls that commence operations under the applicable contractual arrangement while the related revenue is deferred at the time of payment and is recognized as revenue over time as EVgo provides charging and other services to the OEM and the OEM’s customers. EVgo management therefore uses these measures internally to establish forecasts, budgets, and operational goals to manage and monitor its business, including the cash used for, and the return on, its investment in its charging infrastructure. EVgo believes that these measures are useful to investors in evaluating EVgo’s performance and help to depict a meaningful representation of the performance of the underlying business, enabling EVgo to evaluate and plan more effectively for the future.

Current wording

This Quarterly Report includes the following non-GAAP financial measures, in each case as defined below: “Charging Network Margin,” “Adjusted Cost of Sales,” “Adjusted Cost of Sales as a Percentage of Revenue,” “Adjusted Gross Profit (Loss),” “Adjusted Gross Margin,” “Adjusted General and Administrative Expenses,” “Adjusted General and Administrative Expenses as a Percentage of Revenue,” “EBITDA,” “EBITDA Margin,” “Adjusted EBITDA,” “Adjusted EBITDA Margin,” and “Capital Expenditures, Net of Capital Offsets.” With respect to Capital Expenditures, Net of Capital Offsets, pursuant to the terms of certain OEM contracts, EVgo is paid well in advance of when revenue can be recognized, and usually, the payment is tied to the number of stalls that commence operations under the applicable contractual arrangement while the related revenue is deferred at the time of payment and is recognized as revenue over time as EVgo provides charging and other services to the OEM and the OEM’s customers. EVgo management therefore uses these measures internally to establish forecasts, budgets, and operational goals to manage and monitor its business, including the cash used for, and the return on, its investment in its charging infrastructure. EVgo believes that these measures are useful to investors in evaluating EVgo’s performance and help to depict a meaningful representation of the performance of the underlying business, enabling EVgo to evaluate and plan more effectively for the future.

Previous wording

Adjusted Cost of Sales, Adjusted Cost of Sales as a Percentage of Revenue, Adjusted Gross Profit (Loss), Adjusted Gross Margin, Adjusted General and Administrative Expenses, Adjusted General and Administrative Expenses as a Percentage of Revenue, EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EBITDA Margin and Capital Expenditures, Net of Capital Offsets are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. These measures should not be considered as measures of financial performance under GAAP and the items excluded from or included in these metrics are significant components in understanding and assessing EVgo’s financial performance. These metrics should not be considered as alternatives to net income (loss) or any other performance measures derived in accordance with GAAP.

Current wording

Charging Network Margin, Adjusted Cost of Sales, Adjusted Cost of Sales as a Percentage of Revenue, Adjusted Gross Profit (Loss), Adjusted Gross Margin, Adjusted General and Administrative Expenses, Adjusted General and Administrative Expenses as a Percentage of Revenue, EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EBITDA Margin and Capital Expenditures, Net of Capital Offsets are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. These measures should not be considered as measures of financial performance under GAAP and the items excluded from or included in these metrics are significant components in understanding and assessing EVgo’s financial performance. These metrics should not be considered as alternatives to net income (loss) or any other performance measures derived in accordance with GAAP.

Previous wording

EVgo defines Adjusted Cost of Sales as cost of sales before: (i) depreciation, net of capital-build amortization, and (ii) share-based compensation. EVgo defines Adjusted Cost of Sales as a Percentage of Revenue as Adjusted Cost of Sales as a percentage of revenue. EVgo defines Adjusted Gross Profit (Loss) as revenue less Adjusted Cost of Sales. EVgo defines Adjusted Gross Margin as Adjusted Gross Profit (Loss) as a percentage of revenue. EVgo defines Adjusted General and Administrative Expenses as general and administrative expenses before (i) share-based compensation, (ii) loss on disposal of property and equipment, net of insurance recoveries, and impairment expense, (iii) bad debt expense (recoveries), and (iv) certain other items that management believes are not indicative of EVgo’s ongoing performance. EVgo defines Adjusted General and Administrative Expenses as a Percentage of Revenue as Adjusted General and Administrative Expenses as a percentage of revenue. EVgo defines EBITDA as net income (loss) before (i) depreciation, net of capital-build amortization, (ii) amortization, (iii) accretion, (iv) interest income, (v) interest expense, and (vi) income tax expense (benefit). EVgo defines EBITDA Margin as EBITDA as a percentage of revenue. EVgo defines Adjusted EBITDA as EBITDA plus (i) share-based compensation, (ii) loss on disposal of property and equipment, net of insurance recoveries, and impairment expense, (iii) loss (gain) on investments, (iv) bad debt expense (recoveries), (v) change in fair value of earnout liability, (vi) change in fair value of warrant liabilities, and (vii) certain other items that management believes are not indicative of EVgo’s ongoing performance. EVgo defines Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of revenue. EVgo defines Capital Expenditures, Net of Capital Offsets as capital expenditures adjusted for the following capital offsets: (i) all payments under OEM infrastructure agreements excluding any amounts directly attributable to OEM customer charging credit programs and pass-through of non-capital expense reimbursements, and (ii) proceeds from capital-build funding. The tables below present quantitative reconciliations of these measures to their most directly comparable GAAP measures as described in this paragraph.

Current wording

EVgo defines Charging Network Margin as total charging network revenue less charging network cost of sales divided by total charging network revenue. EVgo defines Adjusted Cost of Sales as cost of sales before: (i) depreciation, net of capital-build amortization, and (ii) share-based compensation. EVgo defines Adjusted Cost of Sales as a Percentage of Revenue as Adjusted Cost of Sales as a percentage of revenue. EVgo defines Adjusted Gross Profit (Loss) as revenue less Adjusted Cost of Sales. EVgo defines Adjusted Gross Margin as Adjusted Gross Profit (Loss) as a percentage of revenue. EVgo defines Adjusted General and Administrative Expenses as general and administrative expenses before (i) share-based compensation, (ii) loss on disposal of property and equipment, net of insurance recoveries, and impairment expense, (iii) bad debt expense (recoveries), and (iv) certain other items that management believes are not indicative of EVgo’s ongoing performance. EVgo defines Adjusted General and Administrative Expenses as a Percentage of Revenue as Adjusted General and Administrative Expenses as a percentage of revenue. EVgo defines EBITDA as net income (loss) before (i) depreciation, net of capital-build amortization, (ii) amortization, (iii) accretion, (iv) interest income, (v) interest expense, and (vi) income tax expense (benefit). EVgo defines EBITDA Margin as EBITDA as a percentage of revenue. EVgo defines Adjusted EBITDA as EBITDA plus (i) share-based compensation, (ii) loss on disposal of property and equipment, net of insurance recoveries, and impairment expense, (iii) loss (gain) on investments, (iv) bad debt expense (recoveries), (v) change in fair value of earnout liability, (vi) change in fair value of warrant liabilities, and (vii) certain other items that management believes are not indicative of EVgo’s ongoing performance. EVgo defines Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of revenue. EVgo defines Capital Expenditures, Net of Capital Offsets as capital expenditures adjusted for the following capital offsets: (i) all payments under OEM infrastructure agreements excluding any amounts directly attributable to OEM customer charging credit programs and pass-through of non-capital expense reimbursements, and (ii) proceeds from capital-build funding. The tables below present quantitative reconciliations of these measures to their most directly comparable GAAP measures as described in this paragraph.

Previous wording

The following unaudited table presents a reconciliation of Adjusted Cost of Sales, Adjusted Cost of Sales as a Percentage of Revenue, Adjusted Gross Profit and Adjusted Gross Margin to the most directly comparable GAAP measures:

Current wording

The following unaudited table presents a reconciliation of Charging Network Margin, Adjusted Cost of Sales, Adjusted Cost of Sales as a Percentage of Revenue, Adjusted Gross Profit and Adjusted Gross Margin to the most directly comparable GAAP measures:

Previous wording

EVgo has a history of operating losses and negative operating cash flows. As of March 31, 2024, EVgo had $175.5 million of cash, cash equivalents and restricted cash and working capital of $157.4 million. As of December 31, 2023, EVgo had $209.1 million of cash, cash equivalents and restricted cash and working capital of $178.1 million. The Company’s net cash outflow for the three months ended March 31, 2024 was $33.6 million. EVgo believes its cash and cash equivalents on hand as of March 31, 2024 are sufficient to meet EVgo’s current working capital and capital expenditure requirements for a period of at least twelve months from the filing date of this Quarterly Report.

Current wording

EVgo had $209.1 million of cash, cash equivalents and restricted cash and working capital of $178.1 million. The Company’s net cash outflow for the six months ended June 30, 2024 was $46.4 million. EVgo believes its cash and cash equivalents on hand as of June 30, 2024 are sufficient to meet EVgo’s current working capital and capital expenditure requirements for a period of at least twelve months from the filing date of this Quarterly Report.

Previous wording

The term of the Tax Receivable Agreement commenced upon the completion of the CRIS Business Combination and will continue until all tax benefits that are subject to the Tax Receivable Agreement have been utilized or expired and all required payments are made, unless the Tax Receivable Agreement is terminated early (including upon a change of control). The actual timing and amount of any payments that may be made under the Tax Receivable Agreement are unknown at this time and will vary based on a number of factors. However, the Company Group expects that the payments that it will be required to make to TRA Holders in connection with the Tax Receivable Agreement will be substantial. Any payments made by the Company Group to TRA Holders under the Tax Receivable Agreement will generally reduce the amount of cash that might have otherwise been available to EVgo or EVgo OpCo. To the extent EVgo OpCo has available cash and subject to the terms of any current or future debt or other agreements, the EVgo OpCo A&R LLC Agreement will require EVgo OpCo to make pro rata cash distributions to holders of EVgo OpCo Units, including Thunder Sub, in an amount sufficient to allow the Company Group to pay its taxes and to make payments under the Tax Receivable Agreement. EVgo generally expects EVgo OpCo to fund such distributions out of available cash. However, except in cases where the Company Group elects to terminate the Tax Receivable Agreement early, the Tax Receivable Agreement is terminated early due to certain mergers or other changes of control, or the Company Group has available cash but fails to make payments when due, generally the Company Group may elect to defer payments due under the Tax Receivable Agreement if it does not have available cash to satisfy its payment obligations under the Tax Receivable Agreement or if its contractual obligations limit its ability to make these payments. Any such deferred payments under the Tax Receivable Agreement generally will accrue interest at the rate provided for in the Tax Receivable Agreement and such interest may significantly exceed the Company Group’s other costs of capital. In certain circumstances (including an early termination of the Tax Receivable Agreement due to a change of control or otherwise), payments under the Tax Receivable Agreement may be accelerated and/or significantly exceed the actual benefits, if any, the Company Group realizes in respect of the tax attributes subject to the Tax Receivable Agreement. In the case of such an acceleration in connection with a change of control, where applicable, EVgo generally expects the accelerated payments due under the Tax Receivable Agreement to be funded out of the proceeds of the change of control transaction giving rise to such acceleration, which could have a significant impact on EVgo’s ability to consummate a change of control or the proceeds received by EVgo’s stockholders

Current wording

The term of the Tax Receivable Agreement commenced upon the completion of the CRIS Business Combination and will continue until all tax benefits that are subject to the Tax Receivable Agreement have been utilized or expired and all required payments are made, unless the Tax Receivable Agreement is terminated early (including upon a change of control). The actual timing and amount of any payments that may be made under the Tax Receivable Agreement are unknown at this time and will vary based on a number of factors. However, the Company Group expects that the payments that it will be required to make to TRA Holders in connection with the Tax Receivable Agreement will be substantial. Any payments made by the Company Group to TRA Holders under the Tax Receivable Agreement will generally reduce the amount of cash that might have otherwise been available to EVgo or EVgo OpCo. To the extent EVgo OpCo has available cash and subject to the terms of any current or future debt or other agreements, the EVgo OpCo A&R LLC Agreement will require EVgo OpCo to make pro rata cash distributions to holders of EVgo OpCo Units, including Thunder Sub, in an amount sufficient to allow the Company Group to pay its taxes and to make payments under the Tax Receivable Agreement. EVgo generally expects EVgo OpCo to fund such distributions out of available cash. However, except in cases where the Company Group elects to terminate the Tax Receivable Agreement early, the Tax Receivable Agreement is terminated early due to certain mergers or other changes of control, or the Company Group has available cash but fails to make payments when due, generally the Company Group may elect to defer payments due under the Tax Receivable Agreement if it does not have available cash to satisfy its payment obligations under the Tax Receivable Agreement or if its contractual obligations limit its ability to make these payments. Any such deferred payments under the Tax Receivable Agreement generally will accrue interest at the rate provided for in the Tax Receivable Agreement and such interest may significantly exceed the Company Group’s other costs of capital. In certain circumstances (including an early termination of the Tax Receivable Agreement due to a change of control or otherwise), payments under the Tax Receivable Agreement may be accelerated and/or significantly exceed the actual benefits, if any, the Company Group realizes in respect of the tax attributes subject to the Tax Receivable Agreement. In the case of such an acceleration in connection with a change of control, where applicable, EVgo generally expects the accelerated payments due under the Tax Receivable Agreement to be funded out of the proceeds of the change of control transaction giving rise to such acceleration, which could have a significant impact on EVgo’s ability to consummate a change of control or the proceeds received by EVgo’s stockholders in connection with a change of control. However, the Company Group may be …

Excerpt shortened here; the source contains the full paragraph.

Previous wording

*Operating Activities.*Cash used in operating activities for the three months ended March 31, 2024 was $14.1 million compared to $19.3 million for the three months ended March 31, 2023. The year-over-year change primarily reflected a $17.8 million increase in cash flows from accounts receivable, net, a $12.3 million increase in cash inflows from operations, and a $2.7 increase in cash flows from prepaid expenses, other current assets and other assets, partially offset by a $15.5 million decrease in cash flows from deferred revenue, a $6.6 million decrease in cash flows from accounts payable, and a $4.8 million decrease in cash flows from accrued liabilities.

Current wording

*Operating Activities.*Cash used in operating activities for the six months ended June 30, 2024 was $6.5 million compared to $22.5 million for the six months ended June 30, 2023. The year-over-year change primarily reflected a $14.7 million increase in cash flows from operations, an $11.5 million increase in cash inflows from accounts receivable, net, and a $9.0 million increase in cash flows from accounts payable, partially offset by an $8.7 million decrease in cash flows from accrued liabilities, a $7.0 million decrease in cash flows from deferred revenue, and a $2.5 million decrease in cash flows from prepaid expenses, other current assets and other assets.

Previous wording

*Investing Activities.*Cash used in investing activities for the three months ended March 31, 2024 was $21.0 million, compared to $65.2 million for the three months ended March 31, 2023. The decrease was primarily driven by a decrease in purchases of property, equipment and software.

Current wording

*Investing Activities.*Cash used in investing activities for the six months ended June 30, 2024 was $45.1 million, compared to $99.9 million for the six months ended June 30, 2023. The decrease was primarily driven by a decrease in purchases of property, equipment and software.

Previous wording

Financing Activities. Cash provided by financing activities for the three months ended March 31, 2024 was $1.5 million compared to $1.9 million for the three months ended March 31, 2023. The decrease was driven primarily by a decrease in proceeds from capital-build funding received for charging stations during the three months ended March 31, 2024.

Current wording

Financing Activities. Cash provided by financing activities for the six months ended June 30, 2024 was $5.2 million compared to $133.4 million for the six months ended June 30, 2023. The decrease was driven primarily by the proceeds from the issuance of Class A common stock in the Company’s underwritten equity offering during 2023.

Previous wording

Working Capital. EVgo’s working capital as of March 31, 2024 was $157.4 million, compared to $178.1 million as of December 31, 2023. The decrease was driven primarily by a $33.6 million decrease in the Company’s cash, cash equivalents and restricted cash anda $0.5 million increase in operating lease liabilities, current, partially offset by a $5.6 million decrease in accrued liabilities, a $2.8 million increase in accounts receivable, capital-build, and a $2.5 million decrease in deferred revenue, current.

Current wording

Working Capital. EVgo’s working capital as of June 30, 2024 was $135.4 million, compared to $178.1 million as of December 31, 2023. The decrease was driven primarily by a $46.4 million decrease in the Company’s cash, cash equivalents and restricted cash anda $6.0 million increase in accounts payable, partially offset by a $3.9 million increase in accounts receivable, capital-build, and a $3.7 million decrease in deferred revenue, current.

Previous wording

The Company has one reporting unit and performs its annual goodwill impairment testing on October 1 each year. In assessing the possibility that a reporting unit’s fair value has been reduced below its carrying amount due to the occurrence of events or circumstances between annual impairment testing dates, the Company considers all available evidence, including (i) the results of impairment testing from the most recent testing date (in particular, the magnitude of the excess

Current wording

The Company has one reporting unit and performs its annual goodwill impairment testing on October 1 each year. In assessing the possibility that a reporting unit’s fair value has been reduced below its carrying amount due to the occurrence of events or circumstances between annual impairment testing dates, the Company considers all available evidence, including (i) the results of impairment testing from the most recent testing date (in particular, the magnitude of the excess of fair value over carrying value observed), (ii) downward revisions to internal forecasts, decreases in market multiples (and the magnitude thereof) or changes to interest rates, if any, and (iii) declines in market capitalization below book value (and the magnitude and duration of those declines), if any.

Previous wording

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance and remeasured to fair value at each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized in “changes in fair value of warrant liabilities” in the consolidated statements of operations. The fair value of the Private Placement Warrants on the date of issuance and on each measurement date is estimated by reference to the trading price of the public warrants, which is considered a Level 2 fair value measurement, or using a Monte Carlo simulation methodology, which is considered a Level 3 fair value measurement and includes inputs such as EVgo’s stock price, the risk-free interest rate, the expected term, the expected volatility, the dividend rate, the

Current wording

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance and remeasured to fair value at each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized in “changes in fair value of warrant liabilities” in the consolidated statements of operations. The fair value of the Private Placement Warrants on the date of issuance and on each measurement date is estimated by reference to the trading price of the public warrants, which is considered a Level 2 fair value measurement, or using a Monte Carlo simulation methodology, which is considered a Level 3 fair value measurement and includes inputs such as EVgo’s stock price, the risk-free interest rate, the expected term, the expected volatility, the dividend rate, the exercise price and the number of Private Placement Warrants outstanding. Assumptions used in the Monte Carlo model are subjective and require significant judgment.

Previous wording

For a discussion of EVgo’s new or recently adopted accounting pronouncements, see “Part I, Item 1. Financial Statements – Note 2 – Summary of Significant Accounting Policies” as of and for the quarters ended March 31, 2024 and 2023.

Current wording

For a discussion of EVgo’s new or recently adopted accounting pronouncements, see “Part I, Item 1. Financial Statements – Note 2 – Summary of Significant Accounting Policies” as of and for the three and six months ended June 30, 2024 and 2023.