ChargePoint Holdings, Inc. [CHPT] Filings

10-Q 1 chpt-20240731.htm 10-Q chpt-20240731

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 31, 2024


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission file number 001-39004

ChargePoint Holdings, Inc.

(Exact name of registrant as specified in its charter)


Delaware						84-1747686
(State or other jurisdiction of incorporation or organization)						(IRS Employer Identification No.)


240 East Hacienda Avenue Campbell, CA						95008
(Address of principal executive offices)						(Zip Code)

(408) 841-4500

(Registrant's telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered

Common Stock, par value $0.0001 CHPT New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	x	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	o
		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

The registrant had outstanding 431,580,576 shares of common stock as of August 30, 2024.

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CHARGEPOINT HOLDINGS, INC.

Table of Contents


		Page
Part I - Financial Information

Item 1.	Condensed Consolidated Financial Statements (Unaudited)	5
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4.	Controls and Procedures	43

Part II - Other Information

Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	82
Item 3.	Defaults Upon Senior Securities	82
Item 4.	Mine Safety Disclosures	82
Item 5.	Other Information	82
Item 6.	Exhibits	83

Signatures		84

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q (this “Quarterly Report”) includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements could include, among other things, statements regarding the future financial performance of ChargePoint Holdings, Inc. (“ChargePoint” or the “Company,” or “we,” “us,” “our” and similar terms), as well as ChargePoint’s strategy, future operations, research and development initiatives, future operating results, financial position, and resources, expectations regarding revenue, losses, costs, margins and prospects, as well as management plans and objectives. All statements, other than statements of present or historical fact included in this Quarterly Report, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “continue,” “project” or negatives of such terms and other similar expressions that predict or indicate future events or trends or that are not statements of present or historical matters. These statements are based on various assumptions, whether or not identified herein, and on the current expectations of ChargePoint’s management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of, fact or probability. Actual events and circumstances are difficult or impossible to predict and may differ from assumptions, and such differences may be material. Many actual events and circumstances are beyond the control of ChargePoint. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about ChargePoint that may cause the actual results, level of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. If any of these risks materialize or ChargePoint’s assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that ChargePoint does not presently know or that ChargePoint currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect ChargePoint’s expectations, plans or forecasts of future events and views as of the date hereof. ChargePoint anticipates that subsequent events and developments will cause ChargePoint’s assessments to change. These forward-looking statements should not be relied upon as representing ChargePoint’s assessments as of any date subsequent to the date hereof. Accordingly, undue reliance should not be placed upon the forward-looking statements. ChargePoint cautions you that these forward-looking statements are subject to numerous risk and uncertainties, most of which are all difficult to predict and many of which are beyond the control of ChargePoint.

The following factors, among others, could cause actual results to differ materially from forward-looking statements:

•ChargePoint experiences delays in new product introductions or adoption;

•ChargePoint’s ability to expand its business in Europe and the United States;

•the electric vehicle (“EV”) market and deliveries of passenger and fleet vehicles may not grow as expected;

•ChargePoint may not attract a sufficient number of EV fleet owners or operators as customers;

•incentives from governments or utilities may not materialize or may be reduced, which could reduce demand for EVs, or the portion of regulatory credits that customers claim may increase, which would reduce ChargePoint’s revenue from such incentives;

•the impact of competing technologies or technological changes that result in reduced demand for EVs or our charging systems and software solutions other adverse effects on the EV market or our business;

•data security breaches or other network outages;

•ChargePoint’s ability to remediate its material weaknesses in internal control over financial reporting;

•ChargePoint’s success in retaining or recruiting, or changes in, its officers, key employees or directors;

•changes in applicable laws or regulations;

Table of Contents

•the impact of actual or threatened litigation;

•ChargePoint’s ability to maintain a strong balance sheet and to raise capital as needed to support its business and pursue growth opportunities;

•ChargePoint’s ability to integrate acquired assets and businesses into ChargePoint’s own business and the expected benefits from acquired assets to ChargePoint, its customers and its market position; and

•the possibility that ChargePoint may be adversely affected by other economic factors including macroeconomic conditions such as inflation, rising interest rates, geopolitical factors, foreign exchange volatility, slower growth or recession or other business factors or other competitive factors.

The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with the other risk factors included herein. Forward-looking statements reflect current views about ChargePoint’s plans, strategies and prospects, which are based on information available as of the date of this Quarterly Report. Except to the extent required by applicable law, ChargePoint undertakes no obligation (and expressly disclaims any such obligation) to update or revise the forward-looking statements whether as a result of new information, future events or otherwise.

Table of Contents

ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


ChargePoint Holdings, Inc. Unaudited Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets as of July 31, 2024 and January 31, 2024 (unaudited)			6
Condensed Consolidated Statements of Operations for the Three and Six Months Ended July 31, 2024 and 2023 (unaudited)			7
Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended July 31, 2024 and 2023 (unaudited)			8
Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended July 31, 2024 and 2023 (unaudited)			9
Condensed Consolidated Statements of Cash Flows for the Six Months Ended July 31, 2024 and 2023 (unaudited)			10
Notes to Condensed Consolidated Financial Statements (unaudited)			12

ChargePoint Holdings, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data, unaudited)


	July 31, 2024		January 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	243,263	$	327,410
Restricted cash	400		30,400

Accounts receivable, net of allowance of $15,500 as of July 31, 2024 and $14,000 as of January 31, 2024	111,480		124,049
Inventories	228,519		198,580
Prepaid expenses and other current assets	69,249		62,244
Total current assets	652,911		742,683
Property and equipment, net	39,306		42,446
Intangible assets, net	74,490		80,555
Operating lease right-of-use assets	15,604		15,362
Goodwill	213,757		213,750
Other assets	7,709		8,567
Total assets	$	1,003,777	$	1,103,363

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	71,441	$	71,081
Accrued and other current liabilities	146,679		159,104
Deferred revenue	102,863		99,968

Total current liabilities	320,983		330,153
Deferred revenue, noncurrent	135,690		131,471
Debt, noncurrent	285,675		283,704
Operating lease liabilities	17,102		17,350
Deferred tax liabilities	11,933		11,252
Other long-term liabilities	1,504		1,757
Total liabilities	772,887		775,687
Commitments and contingencies (Note 7)
Stockholders’ equity:
Common stock: $0.0001 par value; 1,000,000,000 shares authorized as of July 31, 2024 and January 31, 2024; 430,830,553 and 421,116,720 shares issued and outstanding as of July 31, 2024 and January 31, 2024, respectively	43		42
Preferred stock, $0.0001 par value; 10,000,000 shares authorized as of July 31, 2024 and January 31, 2024; 0 issued and outstanding as of July 31, 2024 and January 31, 2024	—		—
Additional paid-in capital	2,001,845		1,957,932
Accumulated other comprehensive loss	(15,953)		(15,926)
Accumulated deficit	(1,755,045)		(1,614,372)
Total stockholders’ equity	230,890		327,676
Total liabilities and stockholders’ equity	$	1,003,777	$	1,103,363

The accompanying notes are an integral part of these condensed consolidated financial statements.

ChargePoint Holdings, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data, unaudited)


	Three Months Ended July 31,				Six Months Ended July 31,
	2024		2023		2024		2023
Revenue
Networked charging systems	$	64,146	$	114,574	$	129,520	$	212,894
Subscriptions	36,191		30,011		69,636		56,376
Other	8,202		5,909		16,426		11,253
Total revenue	108,539		150,494		215,582		280,523
Cost of revenue
Networked charging systems	59,234		126,961		120,300		207,883
Subscriptions	18,558		18,692		36,300		33,497
Other	5,162		3,716		9,787		7,483
Total cost of revenue	82,954		149,369		166,387		248,863
Gross profit	25,585		1,125		49,195		31,660
Operating expenses
Research and development	36,510		59,642		72,562		109,039
Sales and marketing	36,699		39,671		71,698		76,711
General and administrative	15,122		25,144		34,819		49,164
Total operating expenses	88,331		124,457		179,079		234,914
Loss from operations	(62,746)		(123,332)		(129,884)		(203,254)
Interest income	2,118		1,840		5,326		4,300
Interest expense	(6,560)		(2,926)		(13,171)		(5,853)




Other income (expense), net	(38)		68		(888)		642
Net loss before income taxes	(67,226)		(124,350)		(138,617)		(204,165)
Provision for income taxes	1,648		905		2,056		478
Net loss	$	(68,874)	$	(125,255)	$	(140,673)	$	(204,643)
Weighted average shares outstanding - Basic and Diluted	427,532,688		355,876,807		425,434,765		353,008,473

Net loss per share - Basic and Diluted	$	(0.16)	$	(0.35)	$	(0.33)	$	(0.58)

The accompanying notes are an integral part of these condensed consolidated financial statements.

ChargePoint Holdings, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(in thousands, unaudited)


	Three Months Ended July 31,				Six Months Ended July 31,
	2024		2023		2024		2023
Net loss	$	(68,874)	$	(125,255)	$	(140,673)	$	(204,643)
Other comprehensive income (loss):
Foreign currency translation adjustment	2,047		185		(27)		4,327
Reclassification adjustment for net realized gains on short-term investments included in net income, net of tax	—		—		—		449

Other comprehensive income (loss)	2,047		185		(27)		4,776
Comprehensive loss	$	(66,827)	$	(125,070)	$	(140,700)	$	(199,867)

The accompanying notes are an integral part of these condensed consolidated financial statements.

ChargePoint Holdings, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands, except share data, unaudited)


	Common Stock		Additional Paid-In Capital			Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Equity
		Shares			Amount
Balances as of January 31, 2024		421,116,720	$	42		$	1,957,932	$	(15,926)	$	(1,614,372)	$	327,676
Issuance of common stock under stock plans, net of tax withholding		2,163,379	1			497		—		—		498

Issuance of common stock upon ESPP purchase		1,853,535	—			3,025		—		—		3,025


Stock-based compensation		—	—			20,598		—		—		20,598
Net loss		—	—			—		—		(71,799)		(71,799)
Other comprehensive income		—	—			—		(2,074)		—		(2,074)
Balances as of April 30, 2024		425,133,634	$	43		$	1,982,052	$	(18,000)	$	(1,686,171)	$	277,924
Issuance of common stock under stock plans, net of tax withholding		5,696,919	—			1,024		—		—		1,024




Stock-based compensation		—	—			18,769		—		—		18,769
Net loss		—	—			—		—		(68,874)		(68,874)
Other comprehensive income		—	—			—		2,047		—		2,047
Balances as of July 31, 2024		430,830,553	$	43		$	2,001,845	$	(15,953)	$	(1,755,045)	$	230,890


	Common Stock		Additional Paid-In Capital			Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’Equity
		Shares			Amount
Balances as of January 31, 2023		348,330,481	$	35		$	1,528,104	$	(16,384)	$	(1,156,763)	$	354,992
Issuance of common stock under stock plans, net of tax withholding		2,278,764	—			915		—		—		915
Issuance of common stock under ESPP purchase		562,829	—			4,875		—		—		4,875
Issuance of common stock in connection with ATM offerings, net of issuance costs		1,909,028	—			17,516		—		—		17,516
Vesting of early exercised stock options		—	—			14		—		—		14
Stock based compensation		—	—			23,964		—		—		23,964
Net loss		—	—			—		—		(79,388)		(79,388)
Other comprehensive income		—	—			—		4,591		—		4,591





Balances as of April 30, 2023		353,081,102	$	35		$	1,575,388	$	(11,793)	$	(1,236,151)	$	327,479
Issuance of common stock under stock plans, net of tax withholding		2,635,078	—			420		—		—		420

Issuance of common stock in connection with ATM offerings, net of issuance costs		4,076,072	1			37,283		—		—		37,284
Vesting of early exercised stock options		—	—			8		—		—		8
Stock based compensation		—	—			35,099		—		—		35,099
Net loss		—	—			—		—		(125,255)		(125,255)
Other comprehensive income		—	—			—		185		—		185

Balances as of July 31, 2023		359,792,252	$	36		$	1,648,198	$	(11,608)	$	(1,361,406)	$	275,220

The accompanying notes are an integral part of these condensed consolidated financial statements.

ChargePoint Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands, unaudited)


	Six Months Ended July 31,
	2024		2023
Cash flows from operating activities
Net loss	$	(140,673)	$	(204,643)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	14,896		14,018
Non-cash operating lease cost	1,863		2,199
Stock-based compensation	40,369		59,063
Amortization of deferred contract acquisition costs	1,578		1,380






Inventory impairment	—		28,000
Reserves and other	12,683		5,026
Changes in operating assets and liabilities:
Accounts receivable, net	7,636		(40,562)
Inventories	(28,429)		(97,906)
Prepaid expenses and other assets	(8,160)		(12,365)



Accounts payable, operating lease liabilities, and accrued and other liabilities	(22,624)		33,957
Deferred revenue	7,155		21,231
Net cash used in operating activities	(113,706)		(190,602)
Cash flows from investing activities
Purchases of property and equipment	(7,301)		(9,877)

Maturities of investments	—		105,000


Net cash provided by (used in) investing activities	(7,301)		95,123
Cash flows from financing activities









Debt issuance costs related to the revolving credit facility	—		(2,265)
Proceeds from the issuance of common stock under employee equity plans, net of tax withholding	4,548		6,212
Proceeds from issuance of common stock in connection with ATM offerings, net of issuance costs	—		54,799
Change in driver funds and amounts due to customers	2,378		8,839
Settlement of contingent earnout liability	—		(3,537)
Net cash provided by financing activities	6,926		64,048
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(66)		768
Net decrease in cash, cash equivalents, and restricted cash	(114,147)		(30,663)
Cash, cash equivalents, and restricted cash at beginning of period	357,810		294,562
Cash, cash equivalents, and restricted cash at end of period	$	243,663	$	263,899

ChargePoint Holdings, Inc.

Condensed Consolidated Statements of Cash Flows - (continued)

Six Months Ended July 31, 2024 and 2023

(in thousands, unaudited)


	Six Months Ended July 31,
	2024		2023
Supplementary cash flow information
Cash paid for interest	$	10,366	$	5,250
Cash paid for taxes	$	1,185	$	547
Supplementary cash flow information on noncash investing and financing activities

Right-of-use assets obtained in exchange for lease liabilities	$	1,897	$	—

Acquisitions of property and equipment included in accounts payable and accrued and other current liabilities	$	491	$	3,041
Vesting of early exercised stock options	$	—	$	21





Unpaid debt issuance costs	$	—	$	507

The accompanying notes are an integral part of these condensed consolidated financial statements.

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

1.Description of Business and Basis of Presentation

ChargePoint Holdings, Inc. (“ChargePoint” or the “Company,” “it,” “its”) designs, develops and markets networked electric vehicle (“EV”) charging system infrastructure (“Networked Charging Systems”), connected through cloud-based services (“Cloud” or “Cloud Services”) which (i) enable charging system owners, or hosts, to manage their Networked Charging Systems, and (ii) enable drivers to locate, reserve and authenticate Networked Charging Systems, and to transact EV charging sessions on those systems. ChargePoint’s Networked Charging Systems, subscriptions and other offerings provide an open platform that integrates with system hardware from ChargePoint and other manufacturers, connecting systems over an intelligent network that provides real-time information about charging sessions and full control, support and management of the Networked Charging Systems. This network also provides multiple web-based portals for charging system owners, fleet managers, drivers and utilities. In addition, the Company offers a range of extended warranties (“Assure”), as well as its ChargePoint as a Service (“CPaaS”) program which bundles use of ChargePoint owned and operated systems with Cloud Services, Assure and other benefits into one subscription.

The Company’s fiscal year ends on January 31. References to fiscal year 2024 relate to the fiscal year ended January 31, 2024 and to fiscal year 2025 refer to the fiscal year ending January 31, 2025.

Basis of Presentation

The condensed consolidated financial statements and accompanying notes are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial reporting. The Company’s condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the year ended January 31, 2024 included in the Company’s Annual Report on Form 10-K filed with the SEC on April 1, 2024, which provides a more complete discussion of the Company’s accounting policies and certain other information. The information as of January 31, 2024, included on the condensed consolidated balance sheets was derived from the Company’s audited consolidated financial statements. The condensed consolidated financial statements were prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary for a fair statement of the Company’s financial position as of July 31, 2024, the results of operations for the three and six months ended July 31, 2024 and 2023, and cash flows for the six months ended July 31, 2024 and 2023. The results of operations for the three and six months ended July 31, 2024, are not necessarily indicative of the results that may be expected for the year ending January 31, 2025.

The Company’s condensed consolidated financial statements have been prepared on the basis of continuity of operations, the realization of assets, and the satisfaction of liabilities in the ordinary course of business. Since inception, the Company has been engaged in developing and marketing its Networked Charging Systems, subscriptions and other offerings, raising capital, and recruiting personnel and it has incurred net operating losses and negative cash flows from operations in every year since inception and expects this to continue for the foreseeable future. As of July 31, 2024, the Company had an accumulated deficit of $1,755.0 million.

The Company has funded its operations primarily with proceeds from customer payments, the issuance of redeemable convertible preferred stock, convertible notes, exercise proceeds from options and warrants, borrowings under loan facilities, proceeds from sale of Common Stock under the ATM Facility (as defined in Note 8, Common Stock), and proceeds from the Reverse Recapitalization (as defined below). The Company had cash and cash equivalents and restricted cash of $243.7 million as of July 31, 2024. Cash outflow from operations was $113.7 million and $190.6 million for the six months ended July 31, 2024 and 2023, respectively. As of September 9, 2024, the date on which these condensed consolidated financial statements were issued, the Company believes that its cash on hand, together with cash generated from sales to customers, will satisfy its working capital and capital requirements for at least the next twelve months.

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

The Company’s assessment of the period of time its financial resources will be adequate to support its operations is a forward-looking statement and involves risks and uncertainties. The Company’s actual results could vary as a result of, and its near- and long-term future capital requirements will depend on, many factors, including its growth rate, subscription renewal activity, the timing and extent of spending to support its acquisitions, infrastructure and research and development efforts, the expansion of sales and marketing activities, the timing of new introductions of products or features, the continuing market adoption of its Networked Charging Systems and Cloud Services platform, and the overall market acceptance of EVs. The Company has and may in the future enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property rights. The Company has based its estimates on assumptions that may prove to be wrong, and it could use its available capital resources sooner than it currently expects. The Company may be required to seek additional equity or debt financing. Future liquidity and cash requirements will depend on numerous factors, including market penetration, the introduction of new products, and potential acquisitions of related businesses or technology. If additional financing is required from outside sources, the Company may not be able to raise it on acceptable terms or at all. If the Company is unable to raise additional capital when desired, or if it cannot expand its operations or otherwise capitalize on its business opportunities because it lacks sufficient capital, the Company may need to reorganize its operations including through further reductions in its workforce and its business, operating results and financial condition would be materially adversely affected.

Reverse Recapitalization

On February 26, 2021, Lightning Merger Sub Inc., a wholly-owned subsidiary of Switchback Energy Acquisition Corporation (“Switchback”), merged with ChargePoint, Inc. (“Legacy ChargePoint”), with Legacy ChargePoint surviving as a wholly-owned subsidiary of Switchback (the “Merger”). The Merger was accounted for as a reverse capitalization in accordance with U.S. GAAP (“Reverse Recapitalization”). As a result of the Merger, Switchback was renamed “ChargePoint Holdings, Inc.” Immediately prior to the closing of the Merger (the “Closing”), Legacy ChargePoint’s outstanding series of redeemable convertible preferred stock were converted to Legacy ChargePoint common stock, which then converted to the Company’s common stock (“Common Stock”).

2.Summary of Significant Accounting Policies

Other than policies noted below, there have been no significant changes to the significant accounting policies disclosed in Note 2 of the audited consolidated financial statements as of January 31, 2024 and 2023 and for the years ended January 31, 2024, 2023 and 2022 included in ChargePoint’s Annual Report on Form 10-K filed with the SEC on April 1, 2024.

Use of Estimates

The preparation of the accompanying condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenue and expenses. Actual results and outcomes could differ significantly from the Company’s estimates, judgments and assumptions. Significant estimates include determining standalone selling price for performance obligations in contracts with customers, the estimated expected benefit period for deferred contract acquisition costs, allowances for expected credit losses, inventory reserves, loss on purchase commitment, the useful lives of long-lived assets, the determination of the incremental borrowing rate used for operating lease liabilities, valuation of acquired goodwill and intangible assets, and other assumptions used to measure stock-based compensation, and the valuation of deferred income tax assets and uncertain tax positions. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. The Company adjusts such estimates and assumptions when facts and circumstances dictate. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods. As future events and their effects cannot be determined with precision, actual results could materially differ from those estimates and assumptions.

Concentration of Credit Risk and Other Risks and Uncertainties

Financial instruments that potentially subject the Company to credit risk consist primarily of cash and cash equivalents and accounts receivable. Cash and cash equivalents are held in domestic and foreign cash accounts across large, creditworthy financial institutions. The Company has not experienced any losses on its deposits of cash and cash equivalents through

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

deposits with federally insured commercial banks and at times cash deposit balances may be in excess of federal insurance limits.

Accounts receivable are stated at the amount the Company expects to collect. The Company generally does not require collateral or other security in support of accounts receivable. To reduce credit risk, management performs ongoing credit evaluations of its customers’ financial condition.

Concentration of credit risk with respect to trade accounts receivable is considered to be limited due to the diversity of the Company’s customer base and geographic sales areas. As of July 31, 2024, no customer individually accounted for 10% or more of accounts receivable, net. As of January 31, 2024, one customer individually accounted for 10% or more of accounts receivable, net. For the three and six months ended July 31, 2024, no customer individually represented 10% or more of total revenue. For the three and six months ended July 31, 2023, no customer individually represented 10% or more of total revenue.

The Company’s revenue is concentrated in the infrastructure needed for charging EVs, an industry which is highly competitive and rapidly changing. Significant technological changes within the industry or customer requirements, or the emergence of competitive products with new capabilities or technologies, could adversely affect the Company’s business, operating results and financial condition.

Segment Reporting

Operating segments are defined as components of an entity where discrete financial information is evaluated regularly by the chief decision maker (“CODM”). The Company operates as one operating segment because its Chief Executive Officer, as the Company’s CODM, reviews its financial information on a consolidated basis for purposes of making decisions regarding allocating resources and assessing performance. The Company has no segment managers who are held accountable by the CODM for operations, operating results, and planning for levels of components below the consolidated unit level.

Cash, Cash Equivalents, and Restricted Cash

The Company considers all highly liquid investments with an original maturity of three months or less, when purchased, to be cash equivalents. Cash equivalents may be invested in money market funds. Cash and cash equivalents are carried at cost, which approximates their fair value.

Restricted cash relates to cash deposits restricted under letters of credit issued in support of customer and contract manufacturer agreements.

The reconciliation of cash, cash equivalents, and restricted cash to amounts presented in the condensed consolidated statements of cash flows was as follows:


	July 31, 2024		January 31, 2024
	(in thousands)
Cash and cash equivalents	$	243,263	$	327,410
Restricted cash	400		30,400
Total cash, cash equivalents, and restricted cash	$	243,663	$	357,810

Fair Value of Financial Instruments

Fair value is defined as an exchange price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Assets and liabilities measured at fair value are classified into the following categories based on the inputs used to measure fair value:

•(Level 1) — Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date;

•(Level 2) — Inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or indirectly; and

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

•(Level 3) — Inputs that are unobservable for the asset or liability.

The Company classifies financial instruments in Level 3 of the fair value hierarchy when there is reliance on at least one significant unobservable input to the valuation model. In addition to these unobservable inputs, the valuation models for Level 3 financial instruments typically also rely on a number of inputs that are readily observable, either directly or indirectly. The Company’s assessment of a particular input to the fair value measurement requires management to make judgments and consider factors specific to the asset or liability. The fair value hierarchy requires the use of observable market data when available in determining fair value. The Company recognizes transfers between levels within the fair value hierarchy, if any, at the end of each period. There were no transfers between levels during the periods presented. The Company had no material non-financial assets valued on a non-recurring basis that resulted in an impairment in any period presented.

The carrying values of the Company’s cash equivalents, accounts receivable, net, accounts payable, and accrued and other current liabilities approximate fair value based on the highly liquid, short-term nature of these instruments.

Revenue Recognition

ChargePoint accounts for revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The Company recognizes revenue using the following five-step model as prescribed by ASC 606:

•Identification of the contract, or contracts, with a customer;

•Identification of the performance obligations in the contract;

•Determination of the transaction price;

•Allocation of the transaction price to the performance obligations in the contract; and

•Recognition of revenue when, or as, the Company satisfies a performance obligation.

Significant judgment and estimates are necessary for the allocation of the proceeds received from an arrangement to the multiple performance obligations and the appropriate timing of revenue recognition. The Company enters into contracts with customers that regularly include promises to transfer multiple products and services, such as Networked Charging Systems, software subscriptions, extended maintenance, and professional services. For arrangements with multiple products or services, the Company evaluates whether the individual products or services qualify as distinct performance obligations. In its assessment of whether products or services are a distinct performance obligation, the Company determines whether the customer can benefit from the product or service on its own or with other readily available resources and whether the service is separately identifiable from other products or services in the contract. This evaluation requires the Company to assess the nature of each of its Networked Charging Systems, subscriptions, and other offerings and how each is provided in the context of the contract, including whether they are significantly integrated which may require judgment based on the facts and circumstances of the contract.

The transaction price for each contract is determined based on the amount the Company expects to be entitled to receive in exchange for transferring the promised products or services to the customer. Collectability of revenue is reasonably assured based on historical evidence of collectability of fees the Company charges its customers. The transaction price in the contract is allocated to each distinct performance obligation in an amount that represents the relative amount of consideration expected to be received in exchange for satisfying each performance obligation. Revenue is recognized when performance obligations are satisfied. Revenue is recorded based on the transaction price excluding amounts collected on behalf of third parties such as sales taxes, which are collected on behalf of and remitted to governmental authorities, or driver fees, collected on behalf of customers who offer public charging for a fee.

When agreements involve multiple distinct performance obligations, the Company accounts for individual performance obligations separately if they are distinct. The Company applies significant judgment in identifying and accounting for each performance obligation, as a result of evaluating terms and conditions in contracts. The transaction price is allocated to the separate performance obligations on a relative standalone selling price (“SSP”) basis. The Company determines SSP based on observable standalone selling price when it is available, as well as other factors, including the price charged to its customers, its

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

discounting practices, and its overall pricing objectives, while maximizing observable inputs. In situations where pricing is highly variable, or a product is never sold on a stand-alone basis, the Company estimates the SSP using the residual approach.

The Company usually bills its customers at the onset of the arrangement for both the products and a predetermined period of time for services. Contracts for services typically range from annual to multi-year agreements with typical payment terms of 30 to 90 days.

Networked Charging Systems revenue

Networked Charging Systems revenue includes revenue related to the deliveries of EV charging system infrastructure and fees received for transferring regulatory credits earned for participating in low carbon fuel programs in jurisdictions with such programs. The Company recognizes revenue from sales of Networked Charging Systems upon shipment to distributors, resellers or direct sales customers as these customers obtain title and control over these products. Revenue is adjusted for estimated returns. Revenue from regulatory credits is recognized at the point in time the regulatory credits are transferred.

Subscriptions revenue

Subscriptions revenue consists of services related to Cloud, as well as extended maintenance service plans under Assure. Subscriptions revenue is recognized over time on a straight-line basis as the Company has a stand-ready obligation to deliver such services to the customer.

Subscriptions revenue also consists of CPaaS revenue, which combines the customer’s use of the Company’s owned and operated systems with Cloud and Assure programs into a single subscription. CPaaS subscriptions are considered for accounting purposes to contain a lease for the customer’s use of the Company’s owned and operated systems unless the location allows the Company to receive incremental economic benefit from regulatory credits earned on that owned and operated system. The leasing arrangements the Company enters into with lessees are operating leases. The Company recognizes operating lease revenue on a straight-line basis over the lease term and expenses deferred initial direct costs on the same basis. Lessor revenue relates to operating leases and historically has not been material.

Other revenue

Other revenue consists of charging related fees received from drivers using charging sites owned and operated by the Company, net transaction fees earned for processing payments collected on driver charging sessions at charging sites owned by ChargePoint customers, and other professional services. Revenue from fees for owned and operated sites is recognized over time on a straight-line basis over the performance period of the service contract as the Company has a stand-ready obligation to deliver such services. Revenue from driver charging sessions and charging transaction fees is recognized at the point in time the charging session or transaction is completed. Revenue from professional services is recognized as the services are rendered.

Accounting Pronouncements

Recent Issued Accounting Standards Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” (“ASU 2023-07”) which amends and enhances the disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance. All disclosure requirements under this standard will also be required for public entities with a single reportable segment. The guidance is effective for public business entities for the fiscal years beginning after December 15, 2023, including interim periods within fiscal years beginning after December 15, 2024. The Company plans to adopt ASU 2023-07 and conform with applicable disclosures retrospectively when it becomes mandatorily effective for the Annual Report on Form 10-K for the year ending January 31, 2025.

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires companies to provide disaggregated information about a reporting entity’s effective tax rate reconciliation as well as further disaggregation on income taxes paid disclosure by federal, state, and foreign taxes. The guidance is effective for public business entities for the fiscal years beginning after December 15, 2024. The Company is currently assessing the impact of adopting this standard on the condensed consolidated financial statements and related disclosures.

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

3.Goodwill and Intangible Assets

The following table summarizes the changes in carrying amounts of goodwill (in thousands):


Balance as of January 31, 2024	$	213,750
Foreign exchange fluctuations	7
Balance as of July 31, 2024	$	213,757

There was no impairment recognized for the three and six months ended July 31, 2024 and 2023.

The following table presents the details of intangible assets:


	July 31, 2024
	Cost (1)		Accumulated Amortization (1)		Net (1)		Useful Life
	(amounts in thousands, useful lives in years)
Customer relationships	$	90,759	$	(25,840)	$	64,919	10
Developed technology	18,358		(8,787)		9,571		6
	$	109,117	$	(34,627)	$	74,490

_______________

(1) Values are translated into U.S. Dollars at period-end foreign exchange rates.


	January 31, 2024
	Cost (1)		Accumulated Amortization (1)		Net (1)		Useful Life
	(amounts in thousands, useful lives in years)
Customer relationships	$	90,755	$	(21,301)	$	69,454	10
Developed technology	18,358		(7,257)		11,101		6
	$	109,113	$	(28,558)	$	80,555

_______________

(1) Values are translated into U.S. Dollars at period-end foreign exchange rates.

Amortization expense for customer relationships and developed technology is shown as sales and marketing and cost of revenue, respectively, in the condensed consolidated statements of operations. The acquired intangible assets and goodwill are subject to impairment review at least annually on December 31st.

Acquisition-related intangible assets included in the above table are finite-lived and are carried at cost less accumulated amortization. Intangible assets are being amortized on a straight-line basis over their estimated lives, which approximates the pattern in which the economic benefits of the intangible assets are expected to be realized.

The following table presents the amortization expense related to intangible assets:


	Three Months Ended July 31,				Six Months Ended July 31,
	2024		2023		2024		2023
	(in thousands)
Amortization expense	$	3,028	$	3,039	$	6,051	$	6,077

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

4.Composition of Certain Financial Statement Items

Inventories

Inventories consisted of the following:


	July 31, 2024		January 31, 2024
	(in thousands)
Raw materials	$	9,676	$	5,322

Finished goods and components	218,843		193,258
Total Inventories	$	228,519	$	198,580

Prepaid expense and other current assets

Prepaid expense and other current assets consisted of the following:


	July 31, 2024		January 31, 2024
	(in thousands)
Prepaid expense	$	46,941	$	43,389
Other current assets	22,308		18,855
Total Prepaid Expense and Other Current Assets	$	69,249	$	62,244

Property and Equipment, net

Property and equipment, net consisted of the following:


	July 31, 2024		January 31, 2024
	(in thousands)
Furniture and fixtures	$	1,720	$	1,718
Computers and software	9,310		8,520
Machinery and equipment	38,482		35,954
Tooling	16,219		15,852
Leasehold improvements	9,970		9,828
Owned and operated systems	29,615		27,723
Construction in progress	1,702		2,310
	107,018		101,905
Less: Accumulated depreciation	(67,712)		(59,459)
Total Property and Equipment, Net	$	39,306	$	42,446

The following table presents the depreciation expense:


	Three Months Ended July 31,		Six Months Ended July 31,
	2024	2023	2024	2023
	(in thousands)
Depreciation expense	4,423	3,925	8,844	7,941

Accrued and Other Current Liabilities

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Accrued and other current liabilities consisted of the following:


	July 31, 2024		January 31, 2024
	(in thousands)
Accrued expenses	$	36,175	$	51,399
Accrued losses on purchase commitments	27,547		30,054
Refundable customer deposits	16,875		16,588
Payroll and related expenses	13,981		16,018
Taxes payable	17,615		14,294
Other current liabilities	34,486		30,751
Total Accrued and Other Current Liabilities	$	146,679	$	159,104

Revenue

Revenue consisted of the following:


	Three Months Ended July 31,				Six Months Ended July 31,
	2024		2023		2024		2023
	(in thousands)
United States	$	76,818	$	112,960	$	155,633	$	210,091
Rest of World	31,721		37,534		59,949		70,432
Total revenue	$	108,539	$	150,494	$	215,582	$	280,523

Deferred Revenue

The following table shows the total deferred revenue for each period presented.


	July 31, 2024	January 31, 2024
	(in thousands)
Deferred revenue	238,553	231,439

The following table shows the revenue recognized that was included in the deferred revenue balance at the beginning of the period.


	Three Months Ended July 31,				Six Months Ended July 31,
	2024		2023		2024		2023
	(in thousands)
Deferred revenue recognized	$	27,975	$	24,418	$	59,777	$	50,432

Remaining Performance Obligations

Remaining performance obligations represent the amount of contracted future revenue not yet recognized as the amounts relate to undelivered performance obligations, including both deferred revenue and non-cancellable contracted amounts that will be invoiced and recognized as revenue in future periods. Revenue expected to be recognized from remaining performance obligations was $260.6 million as of July 31, 2024, of which 43% is expected to be recognized over the next twelve months.

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

5.Restructuring Charges

January 2024 Reorganization

In January 2024, the Company implemented a reorganization plan to reduce its operating expenses and further increase efficiencies (the “January 2024 Reorganization”). The January 2024 Reorganization entailed a reduction in force of approximately 223 employees, or 12% of the Company’s global workforce at the time and other actions to reduce expenses. As a result, in the fourth quarter of fiscal year 2024, the Company incurred $9.9 million of employee severance, termination and employment-related exit costs and $2.7 million of facility exit costs, including impairment charges and accelerated depreciation of right-of-use assets.

During the three and six months ended July 31, 2024, no further restructuring charges related to the January 2024 Reorganization were incurred. The following table summarizes the charges by line item within the Company’s consolidated statements of operations where they were recorded in the fiscal year ended January 31, 2024:


	Severance and employment-related termination costs		Facility and other contract terminations		Total
	(in thousands)
Cost of revenue	$	632	$	—	$	632
Research and development	7,540		—		7,540
Sales and marketing	500		—		500
General and administrative	1,274		2,708		3,982
Total	$	9,946	$	2,708	$	12,654

During the three and six months ended July 31, 2024, changes to the restructuring-related liabilities were primarily due to cash disbursements of severance and employment-related exit costs and facility exit costs. As of July 31, 2024, there were $1.5 million of restructuring-related liabilities, including $1.4 million in severance and employment-related exit costs and $0.1 million in facility exit cost. As of January 31, 2024, restructuring-related liabilities were $10.6 million, including $10.2 million in severance and employment-related exit costs and $0.4 million in facility exit costs.

September 2023 Reorganization

In September 2023, the Company implemented a reorganization plan to reduce its operating expenses and increase efficiencies (the “September 2023 Reorganization”). The September 2023 Reorganization entailed a reduction in force of approximately 168 employees, or 10% of the Company’s global workforce at the time and other actions to reduce expense. As a result, in the third quarter of fiscal year 2024, the Company incurred $15.6 million of employee severance and employment-related termination costs, and facility and other contract termination charges.

During the three and six months ended July 31, 2024, no further restructuring charges related to the September 2023 Reorganization were incurred. The following table summarizes the charges by line item within the Company’s consolidated statements of operations where they were recorded in the fiscal year ended January 31, 2024:


	Severance and employment-related termination costs		Facility and other contract terminations		Total
	(in thousands)
Cost of revenue	$	996	$	—	$	996
Research and development	4,183		—		4,183
Sales and marketing	1,343		—		1,343
General and administrative	890		8,189		9,079
Total	$	7,412	$	8,189	$	15,601

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

During the three and six months ended July 31, 2024, changes to the restructuring-related liabilities were primarily due to cash disbursements of severance and employment-related exit costs. As of July 31, 2024, there were $0.4 million in restructuring-related liabilities. As of January 31, 2024, there were $0.5 million restructuring-related liabilities.

6.Debt

The following table presents the Company’s convertible debt outstanding:


	July 31, 2024		January 31, 2024
	(in thousands)
Gross amount	$	300,000	$	300,000
Debt discount and issuance costs	(14,325)		(16,296)
Carrying amount	$	285,675	$	283,704

Estimated fair value (Level 2 Inputs)	$	217,000	$	211,000

The following table presents the Company’s interest expense:


	Three Months Ended July 31,				Six Months Ended July 31,
	2024		2023		2024		2023
	(in thousands)
2028 Convertible Notes
Contractual interest expense	$	5,250	$	2,625	$	10,515	$	5,250
Amortization of debt discount and issuance costs	985		301		1,970		603
2027 Revolving Credit Facility
Amortization of debt issuance costs	212		—		423		—
Commitment fees	153		—		303		—
Total interest expense	$	6,600	$	2,926	$	13,211	$	5,853

2028 Convertible Notes

In April 2022, the Company completed a private placement of $300.0 million aggregate principal amount of unsecured Convertible Senior PIK Toggle Notes (the “Original Convertible Notes”), the terms of which were amended in October 2023, as described below (the “Notes Amendment”). Prior to the Notes Amendment, the maturity date of the Original Convertible Notes was April 1, 2027. The Original Convertible Notes were sold in a private placement in reliance on the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) provided by Section 4(a)(2) of the Securities Act.

The net proceeds from the sale of the Original Convertible Notes were approximately $294.0 million after deducting initial purchaser discounts and commissions and the Company’s offering expenses. The debt discount and issuance costs, net of accumulated amortization, are reported as a direct deduction from the face amount of the Original Convertible Notes. The Company expects to use the net proceeds for general corporate purposes.

Prior to the Notes Amendment, the Original Convertible Notes bore interest at 3.50% per annum, to the extent paid in cash (“Cash Interest”), or 5.00% per annum, to the extent paid in kind through the issuance of additional Original Convertible Notes (“PIK Interest”). Interest is payable semi-annually in arrears on April 1st and October 1st of each year, beginning on October 1, 2022. The Company can elect to make any interest payment through Cash Interest, PIK Interest or any combination thereof.

The Original Convertible Notes are convertible, based on the applicable conversion rate, into cash, shares of the Company’s Common Stock or a combination thereof, at the Company’s election. The initial conversion rate was 41.6119 shares

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

per $1,000 principal amount of the Original Convertible Notes, subject to customary anti-dilution adjustment in certain circumstances, which represented an initial conversion price of approximately $24.03 per share.

Under the terms of the Original Convertible Notes, prior to January 1, 2027, the Original Convertible Notes will be convertible at the option of the holders only upon the occurrence of specified events and during certain periods, and will be convertible on or after January 1, 2027, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date of the Original Convertible Notes.

Holders of the Original Convertible Notes may convert all or a portion of their Original Convertible Notes prior to the close of business on January 1, 2027, only under the following circumstances:

•during any calendar quarter commencing after the calendar quarter ended on September 30, 2022, if the Company’s closing Common Stock price for at least 20 trading days out of the most recent 30 consecutive trading days of the preceding calendar quarter is greater than or equal to 130% of the current conversion price of the Original Convertible Notes on each applicable trading day;

•during the five business day period after any ten consecutive trading days in which, if the trading price per $1,000 principal amount of Original Convertible Notes for each trading day of such ten consecutive trading day period is less than 98% of the product of the Company’s closing Common Stock price and the conversion rate of the Original Convertible Notes on each such trading day;

•if the Company calls the Original Convertible Notes for redemption, at any time prior to the close of business on the second business day immediately preceding the redemption date; or

•upon the occurrence of specified corporate events, including certain distributions, the occurrence of a fundamental change or a transaction resulting in the Company’s Common Stock converting into other securities or property or assets.

The Original Convertible Notes will be redeemable, in whole or in part, at the Company’s option at any time on or after April 21, 2025, and before the 41st scheduled trading day immediately before the maturity date. The redemption price will be equal to the aggregate principal amount of the Original Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, a holder may elect to convert its Original Convertible Notes during any such redemption period, in which case the applicable conversion rate may be increased in certain circumstances if the Original Convertible Notes are converted after they are called for redemption.

Additionally, if the Company undergoes a fundamental change or a change in control transaction (each such term as defined in the indenture governing the Original Convertible Notes), subject to certain conditions, holders may require the Company to purchase for cash all or any portion of their Original Convertible Notes. The fundamental change repurchase price will be 100% of the capitalized principal amount of the Original Convertible Notes, while the change in control repurchase price will be 125% of the capitalized principal amount of the Original Convertible Notes to be purchased, in each case plus any accrued and unpaid interest to, but excluding, the repurchase date.

The indenture governing the Original Convertible Notes includes a restrictive covenant that, subject to specified exceptions, limits the ability of the Company and its subsidiaries to incur secured debt in excess of $750.0 million. In addition, the indenture governing the Original Convertible Notes contains customary terms and covenants, including certain events of default in which case either the trustee or the holders of at least 25% of the aggregate principal amount of the outstanding Original Convertible Notes may declare 100% of the principal of, and accrued and unpaid interest, if any, on, all the Original Convertible Notes to be due and payable immediately.

On October 24, 2023, the Original Convertible Notes were amended to (1) extend the maturity date from April 1, 2027 to April 1, 2028, (2) increase the Cash Interest rate to 7.0% from 3.5% and PIK Interest rate to 8.5% from 5.0%, (3) increase the initial conversion rate to 83.333 shares per $1,000 principal amount of the convertible notes from 41.6119 shares per $1,000 principal amount of the convertible notes, which represented a revised initial conversion price of approximately $12.00 per share, and (4) revise the make-whole table to reflect the revised terms of the convertible notes (herein, “2028 Convertible Notes”). Other than those previously stated, the terms of the 2028 Convertible Notes are not substantially different from the terms of Original Convertible Notes. The Company assessed the Notes Amendment for a debt extinguishment or modification

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

in accordance with ASC 470-50, Debt Modifications and Extinguishments. As both the change in net present value of future cash flows of the 2028 Convertible Notes to that of the Original Convertible Notes and the change in fair value of the embedded conversion option of the 2028 Convertible Notes to that of the carrying value of the Original Convertible Notes immediately before modification resulted in a less than 10% change, the amendment is regarded as a modification. The resulting increase in fair value of the embedded conversion option is recorded as an increase in debt discount, a contra-liability account, as well as the corresponding entry to additional paid-in-capital, in the condensed consolidated balance sheets. Legal fees and other costs incurred with third parties that were directly related to the debt modification were expensed as incurred.

As of July 31, 2024, the effective interest rate on the 2028 Convertible Notes was approximately 8.59%. Amortization of debt discount and issuance costs is reported as a component of interest expenses and is computed using the straight-line method over the term of the 2028 Convertible Notes, which approximates the effective interest method.

The estimated fair value of the 2028 Convertible Notes, valued using Level 2 fair value inputs, as of July 31, 2024 and January 31, 2024 was $217.0 million and $211.0 million, respectively.

2027 Revolving Credit Facility

On July 27, 2023, the Company entered into a revolving credit agreement by and among the Company, ChargePoint, Inc. (the “Borrower”), certain subsidiaries of the Borrower as guarantors (the “Subsidiary Guarantors”), JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto (the “Credit Agreement”). The Credit Agreement provides for senior secured revolving credit facility in an initial aggregate principal amount of up to $150.0 million, with a maturity date of January 1, 2027 (the “2027 Revolving Credit Facility”). Pursuant to the Credit Agreement, the Borrower may from time to time arrange for one or more increases in the commitments under the 2027 Revolving Credit Facility in an aggregate principal amount not to exceed $150.0 million, subject to obtaining the consent of the lenders participating in any such increase. Up to $100.0 million of the 2027 Revolving Credit Facility may be used for the issuance of letters of credit.

The obligations of the Borrower under the Credit Agreement are guaranteed by the Company and the Subsidiary Guarantors and secured by a first priority pledge of the equity securities of the Borrower and certain of its subsidiaries and first priority security interests in substantially all tangible and intangible personal property, including intellectual property, of the Company, the Borrower and each Subsidiary Guarantor, subject to customary exceptions and limitations.

The Credit Agreement contains negative covenants that, among other things, restrict the ability of the Company, the Borrower and its subsidiaries, as applicable, to incur additional indebtedness, incur additional liens, make investments or acquisitions, make dividends, distributions, or other restricted payments, dispose of property, and enter into transactions with affiliates, in each case subject to certain dollar baskets and customary carveouts, as well as customary events of default. In addition, the Credit Agreement requires the Borrower to comply with a minimum total liquidity covenant to be not less than 150% of the aggregate amount of the lender’s commitment under the Credit Agreement (“Total Liquidity”) which requires the Borrower to maintain, at all times, Total Liquidity equal to the sum of cash and cash equivalents held by the Borrower and the other loan parties at controlled accounts with the initial lenders under the Credit Agreement plus the aggregate unused amount of the commitments then available to be drawn under the 2027 Revolving Credit Facility.

Borrowings under the 2027 Revolving Credit Facility may be denominated in U.S. dollars, Euros, or Pound Sterling. At the Company’s option, borrowings may bear interest at a rate per annum equal to either (a) an alternate base rate (for borrowings in U.S. dollars) plus a rate per annum of 1.75%, (b) an adjusted SOFR term rate (for borrowings in U.S. dollars) plus a rate per annum of 2.75%, (c) an adjusted EURIBOR rate (for borrowings in Euros) plus a rate per annum of 2.75%, or (d) a daily simple “risk-free” rate (for borrowings in Pounds Sterling) plus a rate per annum of 2.75%.

The Company will pay commitment fees on the average daily unused amount of the 2027 Revolving Credit Facility at a rate per annum of 0.40%. In addition, the Company will also pay participation fees on the average daily undrawn amount of outstanding letters of credit at a rate per annum of 2.25%.

In October 2023, the Company entered into an amendment to the Credit Agreement to, among other things, permit the Company to complete the Notes Amendment (as described above).

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

As of July 31, 2024, the Borrower had no borrowings outstanding under the 2027 Revolving Credit Facility. The Borrower also had no letters of credit outstanding under the Credit Agreement as of July 31, 2024, and as a result, had a borrowing capacity of up to $150.0 million.

7.Commitments and Contingencies

Purchase Commitments

Open purchase commitments are for the purchase of goods and services related to, but not limited to, manufacturing, facilities and professional services under non-cancellable contracts. No open purchase commitments were recorded as liabilities on the condensed consolidated balance sheets as of July 31, 2024 as the Company had not yet received the related goods or services.

Legal Proceedings

The Company may be involved in various lawsuits, claims, and proceedings, including intellectual property, commercial, securities, and employment matters that arise in the normal course of business. The Company accrues a liability when management believes information available prior to the issuance of the condensed consolidated financial statements indicates it is probable a loss has been incurred as of the date of the condensed consolidated financial statements and the amount of loss can be reasonably estimated. The Company adjusts its accruals to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case. Legal costs are expensed as incurred.

Class Action Litigation

A class action lawsuit alleging violations of federal securities laws was filed on November 29, 2023 in the U.S. District Court for the Northern District of California against the Company and certain of its former officers (the “Class Defendants”). A second class action lawsuit (together with the November 2023 Class Action, the “Class Actions”) was filed against the Class Defendants on January 22, 2024. On May 16, 2024, the Court consolidated the Class Actions into one action captioned Khan v. ChargePoint Holdings, Inc., et al., Case No. 23-cv-06172-EKL, appointed two lead plaintiffs, and appointed lead counsel. On July 19, 2024, Lead Plaintiffs filed a Consolidated Amended Complaint which purports to be on behalf of purchasers of the Company’s stock between December 7, 2021 and November 16, 2023. This Consolidated Amended Complaint alleges that the Class Defendants made materially false and misleading statements in violation of Section 10(b) and Rule 10(b)-5 of the Securities and Exchange Act regarding, (1) ChargePoint’s handling of supply chain disruptions; (2) ChargePoint’s revenue; and (3) the value of ChargePoint’s inventory. Lead Plaintiffs also allege the Class Defendants engaged in a scheme to prematurely recognize revenue in violation of Sections 10(a) and (c) of the Securities and Exchange Act. Class Defendants’ deadline to respond to or file a motion to dismiss the Consolidated Amended Complaint is September 17, 2024 with additional briefing to follow.

Derivative Actions

On January 5, 2024, a ChargePoint stockholder purporting to act on behalf of the Company filed an action in the U.S. District Court for the District of Delaware against ChargePoint’s Board of Directors and certain of its former officers (“Derivative Defendants”), alleging that the Derivative Defendants breached their fiduciary duties to ChargePoint in connection with the same alleged events and alleged materially false and misleading statements asserted in the Class Actions described above. This action has been stayed. Four additional substantively duplicative actions were filed in the U.S. District Court for the Northern District of California on January 8, 2024, March 1, 2024, May 2, 2024, and May 24, 2024. The complaints seek unspecified monetary damages and other relief. The parties are in the process of seeking Court approval to relate and consolidate these cases.

The Company intends to defend these lawsuits vigorously. At this time, the Company is unable to predict the outcome or estimate the amount of loss or range of losses that could potentially result from these lawsuits.

Based on its experience, the Company believes that damage amounts claimed in these matters are not meaningful indicators of potential liability. Given the inherent uncertainties of litigation, the ultimate outcome of the ongoing matters described herein cannot be predicted with certainty. While litigation is inherently unpredictable, the Company believes it has valid defenses with respect to the legal matters pending against it. Nevertheless, the Company’s results of operations, cash

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

flows and financial condition could be materially adversely affected in a particular period by the resolution of one or more of these contingencies. Liabilities established to provide for contingencies are adjusted as further information develops, circumstances change, or contingencies are resolved; and such changes are recorded in the accompanying condensed consolidated statements of operations during the period of the change and reflected in accrued and other current liabilities on the accompanying condensed consolidated balance sheets.

Guarantees and Indemnifications

The Company has service level commitments to certain of its customers warranting levels of uptime reliability and performance and permitting those customers to receive credits if the Company fails to meet those levels. To date, the Company has not incurred any material costs as a result of such commitments.

The Company’s arrangements generally include certain provisions for indemnifying customers against liabilities if its products or services infringe a third-party’s intellectual property rights. Additionally, the Company may be required to indemnify for claims caused by its negligence or willful misconduct. It is not possible to determine the maximum potential amount under these indemnification obligations due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. To date, the Company has not incurred any material costs as a result of such obligations and has not accrued any liabilities related to such obligations in the condensed consolidated financial statements.

The Company has also agreed to indemnify its directors and executive officers for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred by them in any action or proceeding to which any of them are, or are threatened to be, made a party by reason of their service as a director or officer. The Company maintains director and officer insurance coverage that would generally enable it to recover a portion of any future amounts paid. The Company also may be subject to indemnification obligations by law with respect to the actions of its employees under certain circumstances and in certain jurisdictions.

Letters of Credit

The Company had $0.4 million and $30.4 million of secured letters of credit outstanding as of July 31, 2024 and January 31, 2024, respectively. On May 16, 2024, the letter of credit agreement with one of the Company’s contract manufacturers expired and the lender released $30.0 million of restricted cash to the Company. These primarily relate to support of contract manufacturer and customer agreements, and are fully collateralized by cash deposits which the Company recorded in restricted cash on its condensed consolidated balance sheets based on the term of the remaining restriction.

Leases

The Company leases its office facilities under non-cancelable operating leases with various lease terms. The Company also leases certain office equipment under operating lease agreements.

The following table presents future payments of lease liabilities under the Company's non-cancelable operating leases as of July 31, 2024 (in thousands):


	(in thousands)
2025 (remaining six months)	$	3,332
2026	5,733
2027	5,505
2028	4,646
2029	4,044
Thereafter	2,303
Total undiscounted operating lease payments	25,563
Less: imputed interest	(4,100)
Total operating lease liabilities	21,463
Less: current portion of operating lease liabilities	(4,361)
Operating lease liabilities, noncurrent	$	17,102

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

8.Common Stock

As of July 31, 2024 and January 31, 2024, the Company was authorized to issue 1,000,000,000 shares of Common Stock, with a par value of $0.0001 per share. There were 430,830,553 and 421,116,720 shares issued and outstanding as of July 31, 2024 and January 31, 2024, respectively.

At-the-Market Offering

On July 1, 2022, ChargePoint filed a registration statement on Form S-3 (File No. 333-265986) with the SEC (that was declared effective by the SEC on July 12, 2022), which permits the Company to offer up to $1.0 billion of Common Stock, preferred stock, debt securities, warrants and rights in one or more offerings and in any combination, including in units from time to time (the “Shelf Registration Statement”). As part of the Shelf Registration Statement, ChargePoint filed a prospectus supplement registering for sale from time to time up to $500.0 million of Common Stock pursuant to a sales agreement (the “ATM Facility”).

During the three and six months ended July 31, 2024, there was no sale of the Company’s Common Stock pursuant to the ATM Facility. During the three months ended July 31, 2023, the Company sold a total of 4,076,072 shares of its Common Stock pursuant to the ATM Facility at the prevailing market prices for total proceeds of $37.3 million, net of $0.4 million of issuance costs. During the six months ended July 31, 2023, the Company sold a total of 5,985,100 shares of its Common Stock pursuant to the ATM Facility at the prevailing market prices for total proceeds of $54.8 million, net of $0.6 million of issuance costs.

As of July 31, 2024, $161.6 million of shares of Common Stock remained available for sale pursuant to the ATM Facility.

9.Common Stock Warrants

Legacy ChargePoint had outstanding warrants to purchase shares of Legacy ChargePoint common stock (collectively, “Legacy Warrants”), which now represent warrants to purchase Common Stock. As of July 31, 2024, there were 34,499,436 Legacy Warrants outstanding, which are classified as equity.

There was no Legacy Warrants activity during the three and six months ended July 31, 2024 and 2023.

Activity of Legacy Warrants is set forth below:


			Legacy Warrants
Outstanding as of January 31, 2024			34,499,436
Warrants exercised			—

Outstanding as of July 31, 2024			34,499,436

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

10.Equity Plans and Stock-based Compensation

The following sets forth the total stock-based compensation expense for employee equity plans included in the Company’s condensed consolidated statements of operations:


	Three Months Ended July 31,				Six Months Ended July 31,
	2024		2023		2024		2023
	(in thousands)
Cost of revenue	$	1,526	$	1,938	$	2,610	$	2,933
Research and development	10,731		15,847		19,033		25,353
Sales and marketing	4,463		6,757		9,905		10,926
General and administrative	2,049		10,557		8,820		19,851
Total stock-based compensation expense	$	18,769	$	35,099	$	40,368	$	59,063

As of July 31, 2024, the Company had unrecognized stock-based compensation expense related to stock options, RSUs and PRSUs (as defined below), and 2021 ESPP (as defined below) of $136.4 million, which is expected to be recognized over a weighted-average period of 2.2 years.

2021 Employee Stock Purchase Plan

The 2021 Employee Stock Purchase Plan (“2021 ESPP”) permits participants to purchase shares of the Company’s Common Stock at a discounted price through payroll deductions. As of July 31, 2024, 15,498,912 shares of Common Stock were available under the 2021 ESPP.

2021 Equity Incentive Plan

The 2021 Equity Incentive Plan (“2021 EIP”) allows the Company to grant stock options, stock appreciation rights, restricted stock units (“RSUs”), performance restricted stock units (“PRSUs”), and certain other awards. As of July 31, 2024, 37,590,709 shares of Common Stock were available under the 2021 EIP.

There were no options granted for the three and six months ended July 31, 2024.

Restricted Stock Units

A summary of RSUs outstanding under the 2021 EIP as of July 31, 2024 and changes during the fiscal year-to-date period then ended is presented in the following table:


	Number of Shares	Weighted Average Grant Date Fair Value per Share
Outstanding as of January 31, 2024	28,416,127	$	7.35
RSU granted	22,271,093	$	1.51
RSU vested	(5,231,209)	$	7.09
RSU forfeited	(4,428,242)	$	9.77
Outstanding as of July 31, 2024	41,027,769	$	3.95

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Performance Restricted Stock Units

A summary of PRSUs outstanding under the 2021 EIP as of July 31, 2024 and changes during the fiscal year-to-date period then ended is presented in the following table:


	Number of Shares	Weighted Average Grant Date Fair Value per Share
Outstanding as of January 31, 2024	3,147,782	$	6.79
PRSUs granted	1,208,250	$	1.26

PRSU forfeited	(1,170,008)	$	10.47
Outstanding as of July 31, 2024	3,186,024	$	3.34

2017 Plan and 2007 Plan

In fiscal year 2022, the Company terminated its 2017 Stock Option Plan (the “2017 Plan”) and 2007 Stock Option Plan (the “2007 Plan”).

A summary of options outstanding under the 2017 Plan and 2007 Plan as of July 31, 2024 and changes during the fiscal year-to-date period then ended is presented in the following table:


	Number of Stock Option Awards	Weighted Average Exercise Price		Weighted Average Remaining Contractual term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding as of January 31, 2024	11,396,756	$	0.74	4.8	$	13,276
Options exercised	(2,629,090)	$	0.58
Options cancelled	(76,860)	$	0.74

Outstanding as of July 31, 2024	8,690,806	$	0.78	2.2	$	12,061
Options vested and expected to vest as of July 31, 2024	8,690,806	$	0.78	2.2	$	12,061
Exercisable as of July 31, 2024	8,690,806	$	0.78	2.2	$	12,061

11.Income Taxes

The income tax provision for interim periods is determined using an estimate of the Company’s annual effective tax rate as adjusted for discrete items arising in that quarter. The effective income tax rate was (2.5)% and (0.7)% for the three months ended July 31, 2024 and 2023, respectively. The effective income tax rate was (1.5)% and (0.2)% for the six months ended July 31, 2024 and 2023, respectively. The effective tax rate differs from the U.S. statutory rate primarily due to the full valuation allowances on the Company’s net domestic deferred tax assets as it is more likely than not that all of the deferred tax assets will not be realized.

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

12.Basic and Diluted Net Loss per Share

The following table sets forth the computation of the Company’s basic and diluted net loss per share attributable to common stockholders for the three and six months ended July 31, 2024 and 2023:


	Three Months Ended July 31,				Six Months Ended July 31,
	2024		2023		2024		2023
	(in thousands, except share and per share data)
Numerator:
Net loss	$	(68,874)	$	(125,255)	$	(140,673)	$	(204,643)








Denominator:
Weighted average common shares outstanding	427,532,688		355,893,921		425,434,765		353,031,968
Less: Weighted average unvested restricted shares and shares subject to repurchase	—		(17,114)		—		(23,495)
Weighted average shares outstanding - Basic and Diluted	427,532,688		355,876,807		425,434,765		353,008,473




Net loss per share - Basic and Diluted	$	(0.16)	$	(0.35)	$	(0.33)	$	(0.58)

The potential shares of Common Stock that were excluded from the computation of diluted net loss per share attributable to common stockholders at each period end because including them would have had an antidilutive effect were as follows:


	July 31, 2024	July 31, 2023
2028 Convertible Notes (on an as-converted basis)	24,999,990	12,483,569
Options to purchase common stock	8,690,806	15,366,376
Restricted stock units	41,027,769	22,763,199
Unvested early exercised common stock options	—	12,178
Common stock warrants	34,499,436	34,499,436
Employee stock purchase plan	6,354,138	2,739,885
Total potentially dilutive common share equivalents	115,572,139	87,864,643

PRSUs granted were excluded from the above table because the respective stock price targets have not been met as of July 31, 2024.

13.Subsequent Event

On September 4, 2024, the Company announced the reorganization of its operations including a reduction of the Company's current global workforce by approximately 15% (the “September 2024 Reorganization”). The Company estimates the aggregate restructuring costs associated with the September 2024 Reorganization to be approximately $10.0 million, primarily consisting of severance payments, employee benefits and related costs. The Company expects to incur these costs primarily during the third and fourth fiscal quarters.

The estimates of the charges and expenditures that the Company expects to incur in connection with the September 2024 Reorganization, and the timing thereof, are subject to a number of assumptions, including local law requirements in various jurisdictions, and actual amounts may differ materially from estimates. In addition, the Company may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur, including in connection with the implementation of the September 2024 Reorganization.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of the financial condition and results of operations of ChargePoint Holdings, Inc. (“ChargePoint” or the “Company”) should be read in conjunction with ChargePoint’s condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report, and the audited consolidated financial statements for the year ended January 31, 2024 and related notes included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on April 1, 2024. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. ChargePoint’s actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” in Part II, Item 1A of this Quarterly Report.

Overview

ChargePoint designs, develops and markets networked electric vehicle (“EV”) charging system infrastructure (“Networked Charging Systems”) connected through cloud-based services (“Cloud” or “Cloud Services”) which (i) enable charging systems owners, or hosts, to manage their Networked Charging Systems, and (ii) enable drivers to locate, reserve and authenticate Networked Charging Systems and to transact EV charging sessions on those systems. ChargePoint’s Networked Charging Systems, subscriptions and other offerings provide an open platform that integrates with system hardware from ChargePoint and other manufacturers, connecting systems over an intelligent network that provides real-time information about charging sessions and full control, support and management of the Networked Charging Systems. This network provides multiple web-based portals for charging system owners, fleet managers, drivers and utilities.

ChargePoint generates revenue primarily through the sale of Networked Charging Systems, Cloud Services and extended parts and labor warranties (“Assure”). The Company also generates revenue, in some instances, by providing customers use of ChargePoint’s owned and operated Networked Charging Systems, Cloud Services and Assure into a single multi-year or annual subscription (“ChargePoint as a Service” or “CPaaS”). Each of Cloud Services, Assure and CPaaS is typically paid for upfront and revenue is recognized ratably over the term of the subscription period.

ChargePoint targets three key verticals: commercial, fleet and residential. Commercial customers have parking places largely within their workplaces and include retail, hospitality, healthcare, fueling and convenience and parking lot operators. Fleet includes municipal buses, delivery and work vehicles, port/airport/warehouse and other industrial applications, ridesharing services, and is expected to eventually include autonomous transportation. Residential includes single family homes and multifamily residences.

On February 26, 2021 (“Closing Date”), Switchback Energy Acquisition Corporation (“Switchback”) consummated the previously announced transactions pursuant to which Lightning Merger Sub Inc., a wholly-owned subsidiary of Switchback (“Lightning Merger Sub”), merged with ChargePoint, Inc. (“Legacy ChargePoint”) pursuant to a Business Combination Agreement and Plan of Reorganization dated as of September 23, 2020, by and among Legacy ChargePoint, Lightning Merger Sub, and Switchback (“Merger Agreement”). Legacy ChargePoint survived as a wholly-owned subsidiary of Switchback (“Merger” and, collectively with the other transactions described in the Merger Agreement, the “Reverse Recapitalization”). Further, as a result of the Merger, Switchback was renamed “ChargePoint Holdings, Inc.”

Since its inception in 2007, ChargePoint has been engaged in developing and marketing its Networked Charging Systems, subscriptions and other offerings, raising capital and recruiting personnel. ChargePoint has incurred net operating losses and negative cash flows from operations in every year since its inception. As of July 31, 2024, ChargePoint had an accumulated deficit of $1,755.0 million. ChargePoint has funded its operations primarily from customer payments, the issuance of common stock, redeemable convertible preferred stock and convertible notes, exercise proceeds from options and warrants, borrowings under loan facilities and proceeds from the Reverse Recapitalization.

Key Factors Affecting Operating Results

ChargePoint believes its performance and future success depend on several factors that present significant opportunities for it but also pose risks and challenges, including those discussed below:

Growth in EV Adoption

ChargePoint believes its revenue growth is tied to the number of passenger and commercial EVs sold, which it believes drives the demand for EV charging infrastructure. The market for EVs is still rapidly evolving and although demand for EVs has grown in recent years, the rate of EV sales is highly volatile and there is no guarantee of future demand for EV sales. Factors impacting the adoption of EVs include but are not limited to perceptions about EV features, quality, safety, performance and cost; perceptions about the limited range over which EVs may be driven on a single battery charge; volatility in the cost of oil and gasoline; availability of services for EVs; consumers’ perception about the convenience, reliability and cost of charging EVs; and increases in fuel efficiency of internal combustion engine vehicles. Further, numerous EV auto manufacturers have recently announced delays in their previously announced plans to migrate their manufacturing production to be solely or primarily EVs. In addition, macroeconomic factors, including governmental mandates and incentives and the impact of higher interest rates, inflation and a potential economic recession, could impact demand for EVs, particularly since they can be more expensive to purchase than traditional gasoline-powered vehicles. Further, geopolitical factors, such as the ongoing conflict between Russia and Ukraine, conflicts in the Middle East, conflicts between the United States and China or between China and Taiwan may negatively impact the global automotive supply chain and reduce the manufacturing of automobiles, including EVs. If the market for EVs does not develop as expected, if there is any slow-down or delay in overall EV adoption, or if auto manufacturers delay their EV manufacturing rates or eliminate their plans to transition to predominately EV manufacturing, the rate of EV adoption may be adversely affected and the market for EV charging may not develop as a result and ChargePoint’s financial condition and results of operations could be materially and adversely impacted.

Competition

ChargePoint is currently a market leader in North America in commercial Level 2 Alternating Current (“AC”) charging. ChargePoint also offers AC chargers for use at home or multifamily settings and for fleet applications, and high-power Level 3 Direct Current (“DC”) chargers for fast urban charging, corridor or long-trip charging and fleet applications. ChargePoint intends to expand its market share over time in its product categories, leveraging the network effect of its products and Cloud Services software. Existing competitors may expand their product offerings and sales strategies, and new competitors may enter the market. Historically, ChargePoint has sold its Networked Charging Systems and Cloud Services as an integrated “full-stack” offering, providing its customers with a sole-source solution for their EV charging needs, especially in the United States. Recently, ChargePoint has seen an increase in the frequency of customers seeking to disaggregate their networked charging solutions and to implement independent hardware and charging management software solutions, particularly for national or global commercial retailers and large fleet operators. While ChargePoint enables charging station operators to choose ChargePoint’s Cloud Services and select their choice of third-party hardware, and also enables e-mobility services providers to build and integrate their solutions with ChargePoint’s Cloud Services, there is no guarantee that this distributed sales model will be successful. If ChargePoint’s market share decreases due to increased competition, or if ChargePoint is unable to compete with a disaggregate EV charging solutions sales model, its financial condition and results of operations may be materially and adversely impacted. Furthermore, ChargePoint’s success could be negatively impacted if consumers and businesses choose other types of alternative fuel vehicles or high fuel-economy gasoline powered vehicles.

Europe Expansion

ChargePoint operates in North America and several countries in Europe. Europe is expected to be a significant contributor to ChargePoint’s revenue in future years. ChargePoint has been and is investing heavily to succeed in Europe. ChargePoint is also working to grow its European business through partnerships with channel partners and car leasing companies and through its acquisitions of ViriCiti B.V. and has•to•be gmbh. In Europe, ChargePoint primarily competes with other providers of EV charging station networks. ChargePoint’s growth in Europe requires differentiating itself as compared to these existing competitors. If ChargePoint is unable to continue penetrating the market in Europe, its financial condition and results of operations could be materially and adversely impacted.

Fleet Expansion

ChargePoint’s future growth is also highly dependent upon its success in EV fleet applications, where there is increasing competition, a high customer dependency on the expected increase in the arrival rate of new vehicles, and likely high concentrations and volatility of purchasing as fleet operators ultimately choose their key providers and make large purchases of EVs. As noted above, the customer trend to make independent EV charging hardware and charging management software

procurement selections is more prevalent in the fleet market. Any significant decline in purchases from these customers or increased competition for these customers may have an adverse impact on ChargePoint’s potential for future growth. If ChargePoint is not successful in the fleet vertical, its financial condition and results of operations could be materially and adversely affected.

Impact of New Product Releases and Investments in Growth

As ChargePoint introduces new products, such as the release of its Express Plus DC fast charger in fiscal year 2022 and CP6000 Level 2 AC charger in fiscal year 2023, its gross margins may be initially negatively impacted by launch costs and lower volumes until it achieves targeted cost reductions. Cost reductions may not occur on the timeline ChargePoint expects due to a number of factors, including but not limited to failure to meet its own estimates, unanticipated supply chain difficulties, government mandates or certification requirements. In addition, ChargePoint may accelerate its expenditures where it sees growth opportunities, which may negatively impact gross margin until upfront costs and inefficiencies are absorbed and normalized operations are achieved. Further, ChargePoint has historically invested in prioritizing an assurance of supply of its products and new customer acquisition as part of its “land and expand” model, which puts pressure on gross margins and increases operating expenses. ChargePoint also continuously evaluates and may adjust its expenditures, such as new product introduction costs, based on its launch plans for new products, as well as other factors including the pace and prioritization of current projects under development and the addition of new projects. As ChargePoint attains higher revenue, it expects operating expenses as a percentage of total revenue to decrease as it scales and focuses on increasing operational efficiency and process automation.

ChargePoint intends to use third-party contract manufacturers and design partners for targeted new research and development initiatives with the goals of controlling development costs and decreasing operating expenses. ChargePoint believes such partnerships will allow it to better manage research and development expenses, improve the speed and quality of new product development and increase its efficiencies by leveraging the design talent and supply chains of these partners. Implementing third-party design partners for new research and development initiatives will require sophisticated oversight, quality programs and cost-control initiatives. If ChargePoint is not successful in its use of third-party contract manufacturers and design partners for new product development its financial conditions, gross margins and results of operations could be materially and adversely affected.

Government Mandates, Incentives and Programs

The U.S. federal government, certain foreign governments and some state and local governments provide incentives to end users and purchasers of EVs and EV infrastructure in the form of rebates, tax credits and other financial incentives. These governmental rebates, tax credits and other financial incentives significantly lower the effective price of EVs and EV infrastructure to customers. For example, the Infrastructure Investment and Jobs Act signed into law on November 15, 2021 (the “Jobs Act”) provided additional funding for EVs and EV charging infrastructure through the creation of new programs and grants and the expansion of existing programs, including $7.5 billion for EV charging along highway corridors and communities. In addition, the Inflation Reduction Act of 2022 (the “IRA”) signed into law on August 16, 2022 includes incentives and tax credits aimed at reducing the effects of climate change, such as the extension of electric vehicle charging infrastructure tax credits under Section 30C and tax credits for electric vehicles under Section 30D of the Internal Revenue Code of 1986, as amended (the “Code”) through 2032. There are numerous restrictions and requirements associated with qualifying for the electric vehicle tax credits available under the IRA and incentives such as the Jobs Act and the IRA take time to be disbursed and to affect actual expenditure decisions. These incentives may also expire on specified dates, end when the allocated funding is no longer available, or be reduced or terminated as a matter of regulatory or legislative policy. Any reduction in rebates, tax credits or other financial incentives could reduce the demand for EVs and for charging infrastructure, including infrastructure ChargePoint offers.

Macroeconomic Trends

ChargePoint has an international presence and as a result is subject to risks and uncertainties caused by significant events with macroeconomic impacts, including, but not limited to geopolitical events, including the ongoing Russia-Ukraine conflict, conflicts in the Middle East, rising political tensions with China, rising inflation and interest rates, monetary policy changes, financial services sector instability, recessions, global pandemics and foreign currency fluctuations. Additionally, these macroeconomic impacts have generally disrupted the operations of its customers and prospective customers. In addition, shifts in ChargePoint’s product mix to DC chargers from AC chargers may negatively affect ChargePoint’s gross profits and gross margins since ChargePoint generally realizes higher gross margins from sales of its AC chargers. Further, disruption to ChargePoint’s supply chains and heightened component and shipping pricing and logistics expenses, which ChargePoint experienced in 2021 and 2022, may further adversely impact ChargePoint’s gross margins, adversely affect demand for

ChargePoint’s products, lengthen its product development and sales cycles, and reduce expected spending from new customers, all of which could adversely affect ChargePoint’s business, results of operations and financial condition.

Global economic uncertainty due to other macroeconomic conditions, including inflation, interest rate pressures, disruptions and credit constraints in the financial services industry, labor market disruptions, and related concerns of a potential recession, have impacted customer behavior related to discretionary spending and sentiment and could continue to impact such behaviors in the future. Any resulting decline in the ability or willingness of customers, fleet owners and operators to purchase ChargePoint’s products or subscription services could have an adverse impact on ChargePoint’s results of operations and financial condition.

Results of Operations and Its Components

Revenue

Networked Charging Systems

Networked Charging Systems revenue includes the deliveries of EV charging system infrastructure, which include a range of AC products for use in residential, commercial and fleet applications, and DC, or fast-charge products for use in commercial and fleet applications, as well as fees received for transferring regulatory incentives earned for participating in low carbon fuel programs. ChargePoint generally recognizes revenue from sales of Networked Charging Systems upon shipment to distributors, resellers or direct sales customers as these customers obtain title and control over these products. Revenue is adjusted for estimated returns. Revenue from regulatory incentives is recognized when the regulatory incentives are transferred.

Subscriptions

Subscriptions revenue consists of services related to Cloud, as well as extended maintenance service plans under Assure. Subscriptions revenue also consists of CPaaS revenue which combines the customer’s use of ChargePoint’s owned and operated systems with Cloud and Assure programs into a single, typically multi-year subscription.

In some instances, CPaaS subscriptions are considered for accounting purposes to contain a lease for the customer’s use of ChargePoint’s owned and operated systems unless the location allows the customer to receive incremental economic benefit from regulatory credits earned on that EV charging system. Lessor revenue relates to operating leases and historically has not been material. Subscriptions revenue is generally recognized over time on a straight-line basis as ChargePoint has an ongoing obligation to deliver such services to the customer.

Other

Other revenue consists of charging related fees received from drivers using charging sites owned and operated by ChargePoint, net transaction fees earned for processing payments collected on driver charging sessions at charging sites owned by its customers, and other professional services. Revenue from driver charging sessions and charging transaction fees is recognized when the charging session or transaction is completed. Revenue from fees for owned and operated sites is recognized over time on a straight-line basis over the performance period of the service contract as ChargePoint has an ongoing obligation to deliver such services. Revenue from professional services is recognized as the services are rendered.

ChargePoint has seen its revenue fluctuate based on market demand and other factors, and expects this variability of growth in Networked Charging Systems revenue to continue in the near term. In the long term, it expects revenue to grow in both Networked Charging Systems and subscriptions due to increased demand in EVs and the related charging infrastructure market.


	July 31,
Networked Charging Systems	2024			2023			Change
	(dollar amounts in thousands)
Three months ended	$	64,146		$	114,574		$	(50,428)	(44.0)	%
Percentage of total revenue	59.1		%	76.1		%

Six months ended	$	129,520		$	212,894		$	(83,374)	(39.2)	%
Percentage of total revenue	60.1		%	75.9		%

Networked Charging Systems revenue decreased during the three and six months ended July 31, 2024 compared to the three and six months ended July 31, 2023 primarily due to lower volume of Networked Charging Systems delivered across ChargePoint’s major product families.


	July 31,
Subscriptions	2024			2023			Change
	(dollar amounts in thousands)
Three months ended	$	36,191		$	30,011		$	6,180	20.6	%
Percentage of total revenue	33.3		%	19.9		%

Six months ended	$	69,636		$	56,376		$	13,260	23.5	%
Percentage of total revenue	32.3		%	20.1		%

Subscriptions revenue increased during the three and six months ended July 31, 2024 compared to the three and six months ended July 31, 2023 primarily due to the growth in the number of Cloud subscriptions and Assure subscriptions for Networked Charging Systems connected to ChargePoint’s network.


	July 31,
Other Revenue	2024			2023			Change
	(dollar amounts in thousands)
Three months ended	$	8,202		$	5,909		$	2,293	38.8	%
Percentage of total revenue	7.6		%	3.9		%

Six months ended	$	16,426		$	11,253		$	5,173	46.0	%
Percentage of total revenue	7.6		%	4.0		%

Other revenue increased during the three and six months ended July 31, 2024 compared to the three and six months ended July 31, 2023 primarily due to net transaction fees earned for processing payments collected on driver charging sessions.

Cost of Revenue

Networked Charging Systems

ChargePoint uses contract manufacturers to manufacture its Networked Charging Systems. ChargePoint’s cost of revenue for the sale of Networked Charging Systems includes the contract manufacturer costs of finished goods and shipping and handling. Cost of revenue for the sale of Networked Charging Systems also consists of salaries and related personnel expenses, including stock-based compensation, warranty provisions, inventory obsolescence and write-downs, depreciation of manufacturing related equipment, and allocated facilities and information technology expenses. As revenue is recognized, ChargePoint accounts for estimated warranty cost as a charge to cost of revenue. The estimated warranty cost is based on historical and predicted product failure rates and repair expenses.

Subscriptions

Cost of Subscriptions revenue includes salaries and related personnel expenses, including stock-based compensation and third-party support costs to manage the systems and helpdesk services for drivers and site hosts, network and wireless connectivity costs for subscription services, field costs for Assure, depreciation of owned and operated systems used in CPaaS arrangements, allocated facilities and information technology expenses.

Other

Cost of other revenue includes depreciation and other costs for ChargePoint’s owned and operated charging sites, charging related processing charges, salaries and related personnel expenses, including stock-based compensation, as well as costs of professional services.


	July 31,
Cost of Networked Charging Systems Revenue	2024			2023			Change
	(dollar amounts in thousands)
Three months ended	$	59,234		$	126,961		$	(67,727)	(53.3)	%
Percentage of networked charging systems revenue	92.3		%	110.8		%

Six months ended	$	120,300		$	207,883		$	(87,583)	(42.1)	%
Percentage of networked charging systems revenue	92.9		%	97.6		%

Cost of Networked Charging Systems revenue decreased during the three and six months ended July 31, 2024 compared to the three and six months ended July 31, 2023 primarily due to a decrease in Networked Charging Systems delivered and an inventory impairment charge of $28.0 million taken in the prior year.


	July 31,
Cost of Subscriptions Revenue	2024			2023			Change
	(dollar amounts in thousands)
Three months ended	$	18,558		$	18,692		$	(134)	(0.7)	%
Percentage of subscriptions revenue	51.3		%	62.3		%

Six months ended	$	36,300		$	33,497		$

ChargePoint Holdings, Inc. [CHPT] Filings
10-Q	[2024-09-09]
10-Q	[2024-06-06]
10-K	[2024-04-01]
10-Q	[2023-12-08]
10-Q	[2023-09-11]
10-Q	[2023-06-08]
10-K	[2023-04-03]
10-Q	[2022-12-08]
10-Q	[2022-09-08]
10-Q	[2022-06-07]
10-K	[2022-04-04]
10-Q	[2021-12-15]
S-1	[2021-10-14]
10-Q	[2021-09-10]
S-1	[2021-07-12]
10-Q	[2021-06-11]
S-1	[2021-03-02]
10-K	[2021-02-10]
10-Q	[2020-11-16]
10-Q	[2020-08-13]
10-Q	[2020-05-15]
10-K	[2020-03-30]
10-Q	[2019-11-14]
10-Q	[2019-09-09]
S-1	[2019-07-01]