ChargePoint Layoffs: Electric Vehicle (EV) Charging Network Company Cuts Staff
September 7, 2023 by Joe Panettieri
ChargePoint is laying off 10% of its staff and reorganizing operations amid weaker-than-expected quarterly revenue guidance from the electric vehicle (EV) charging station network company. The staff cuts and reorganization are expected to save ChargePoint roughly $30 million in annual operating expenses, and the company is striving to become cash flow positive next year.
During ChargePoint's earnings call with Wall Street analysts on September 6, 2023, CEO Pasquale Romano said the company remains committed to "delivering on our goal of generating positive non-GAAP adjusted EBITDA by the end of calendar 2024.”
In ChargePoint's most recent quarter (Q2 of fiscal 2024), the financial results included:
Revenue of $150.5 million, up 39% from the corresponding quarter last year.
Net loss of $125.3 million -- which is larger than the $92.7 million net loss in the corresponding quarter last year.
Inventory Levels: Among the areas of concern: ChargePoint took an "inventory impairment charge" -- which involves "adjusting our stranded costs to current values given inventory levels" involving the company's first-generation DC charging products, Romano told Wall Street analysts on the earnings call.
Financial Forecast: Looking ahead, ChargePoint predicted revenue for Q3 of fiscal 2024 would be roughly $150 million to $165 million -- which is significantly below the $182 million that Wall Street analysts were expecting, SeekingAlpha reported.
Wall Street Reaction: Amid that backdrop, ChargePoint's stock fell about 10% after the earnings announcement and layoff disclosure.
Cash Flow: ChargePoint ended its most recent quarter with $264 million in cash on hand. The company also has a $150 million revolving credit facility that is undrawn. ChargePoint plans to "strategically" deploy the credit facility as the company "drives towards becoming cash flow positive next year," CFO Rex Jackson said during the earnings call.
Electric Vehicle Charging Station Market: ChargePoint Competition, Tesla Cooperation
The financial update surfaces amid multiple market shifts in the EV charging network industry.
For its part, ChargePoint expects to ship an NACS connector in November 2023, Romano said. "Customers' existing investments in ChargePoint technology are protected and will remain so into the future via an optional, cost effective upgrade program to NACS cables for their chargers. Our goal is to enable drivers to charge any vehicle anywhere, at any time," Romano added.
ChargePoint has a growing ecosystem of partners, and the company now has roughly 255,000 active EV charging ports under management -- including more than 22,000 DC fast ports, Romano said.
Moreover, the company is deploying new networking, machine learning and proactive monitoring technologies that aim to boost EV charging station reliability to "nearly 100%, once fully implemented," ChargePoint said in August 2023.
Electric Vehicle and Charging Station Market: Mergers, Acquisitions and More
Meanwhile, numerous EV charging technology companies, consulting firms and integrators need to reach scale to both compete and cooperate with the car companies on EV network projects. Among the recent moves to note:
August 2023: NaaS Technology, the first U.S. listed EV charging service company in China, acquired Charge Amps AB for US$66.4 million. Charge Amps is an integrated EV charging solutions provider headquartered in Sweden.
August 2023:ElectraMeccanica and Tevva are planning to merge. If the merger occurs, the combined company expects to generate annual revenue of $1.3 billion to $1.5 billion in 2028