ChargePoint Holdings, Inc. 2027 Q2 Earnings Call

Audrey, please go ahead. Good afternoon, and thank you for joining us on today's conference call to discuss ChargePoint's second quarter fiscal 2027 earnings results.

This call is being webcast and can be accessed on the investor section of our website at investor.chargepoint.com. With me on today's call are Rick Wilmer, our Chief Executive Officer, and Mansi Khetani, our Chief Financial Officer. This afternoon, we issued a press release announcing result for the quarter, ended July 31, 2026, which can be found on our website. We would like to remind you that during the conference call, management will make forward-looking statements, including our outlook for the third quarter of fiscal 2027. These forward-looking statements involve risks and uncertainties, many of which are beyond our control, and could cause actual results to differ materially from our expectations. These forward-looking statements apply as of today, and we undertake no obligation to update these statements after the call.

For a more detailed description of certain factors that could cause actual results to differ, please refer to our Form 10-Q filed with the SEC on June 8, 2026, and our earnings release posted today on our website and filed with the SEC on Form 8-K. Also, please note that we use certain non-GAAP financial measure on this call, which we reconcile to GAAP in our earnings release and for certain historical periods in the investor presentation posted on the investor section of our website. Finally, we will post a transcript of this call on our investor relation website under the quarterly results section. Thank you. I will now turn the call over to our CEO, Rick Wilmer.

Good afternoon, and thank you for joining us. Q2 was an exceptional quarter for ChargePoint that demonstrates why we believe we are the definitive leader in intelligent electrification and e-mobility. We meaningfully exceeded the top of our guidance range, delivered record gross margins, and achieved essentially zero cash burn. We also began shipping early access units of Express Solo, which is the first product based on what we consider to be the fastest, most advanced DC charging architecture ever developed. In partnership with Eaton, we are building the intelligent energy infrastructure of the future that will supercharge the energy transition, including autonomous vehicles and electric fleets. We are building for what is coming, not just what is here today. We delivered revenue of $116 million in Q2, a decisive beat above the top end of our guidance range, and our strongest quarter in recent history.

This result represents 18% year-over-year growth and also marks our fourth consecutive quarter of year-over-year growth. More than 80% of the Fortune 50 are ChargePoint customers, and many of the leading fleet electrification companies in the world run on our platform. This is the result of disciplined execution against our three-year strategic plan, operational excellence, and our steadfast commitment to innovation. Our gross margins hit an all-time record as a public company this quarter. Part of this included non-recurring tariff refunds, but even excluding that benefit, the normalized gross margin still set a new record. That is the business model working exactly as designed, sustained pricing discipline, relentless focus on cost, operational excellence, and the compounding power of our higher margin software and Subscription Revenue. As Express Solo and our compelling new single port AC product enter the market, we expect this trajectory to accelerate.

Our industry-leading full stack intelligent electrification platform is being validated as a driver for both growth and strong margins. We also achieved effectively zero cash burn in Q2. Our capital-light model is a structural competitive advantage. We grow revenue, expand margins, and do not consume significant cash on capital assets to do so. We are on a clear trajectory towards adjusted EBITDA positive. Our operating expenses this quarter reduced further compared to the prior quarter, and we expect another reduction in the third quarter. This has been accomplished without compromises to execution or the scope of what we do. Guided by our excellent leadership team, AI is fundamentally changing how we operate. Our AI initiatives are compressing software development cycles, automating business processes, and enabling us to accomplish more with less.

We are continuously adapting our organizational structure as a result, which means we are flatter with broader spans of control. This new operating model leads to an organization that is simultaneously accelerating growth, delivering faster, and becoming more efficient. That combination will drive sustainable operating leverage that compounds over time. A core pillar of this third year of our three-year strategic plan is driving growth. We are executing with our fourth quarter of sequential year-over-year growth, and now we aim to accelerate further. Accordingly, we are focused on revenue enablement. We are building a world-class sales and marketing engine with a significant emphasis on Europe, and we're putting elite leadership in place to run it. A critical recent addition to our team is John Saffert, who has joined ChargePoint as Executive Vice President and Managing Director of Europe.

John is a proven enterprise operator with deep regional expertise and a track record of building and scaling organizations across European markets. Our pipeline is expanding, and customer confidence in our platform has never been higher. Express Solo, the first product based on what we consider to be the most advanced DC charging architecture on the planet, will be a key driver for accelerating growth. We co-engineered Express with Eaton with an uncompromising focus on performance, scalability, energy density, and economics that we believe is unmatched. Early access units have begun shipping, and the demand signal from customers has been exceptional. Early access units are substantially committed, backlog is building, and the market is telling us exactly what we expected. Express is the product the industry has been waiting for. In terms of performance of Express, let me put a number on it.

We recently demonstrated a 600-plus-kilowatt charge on a passenger vehicle at our headquarters. We charged the car from 10% to 80% state of charge in just 11 minutes. I want to be clear, that is not a theoretical benchmark. That is not a laboratory result. It is a live demonstration on a production system based on the Express architecture that was developed internally by ChargePoint down to every single component. This is the future of refueling, and ChargePoint intends to lead it. ChargePoint Express is a platform that unlocks entirely new markets for ChargePoint. Ultra-high power highway corridors, autonomous vehicle fleet depots, where 24/7 uptime is mission-critical, and premium ChargePoint operator deployments where speed, reliability, and density are non-negotiable.

Looking further ahead and in partnership with Eaton, we think Express's architecture positions us for emerging opportunities in adjacent markets that will require exactly the kind of intelligent, high-density power delivery that Express was designed to provide. We are building for the next decade, not just the next quarter. We expect that Express will be a significant revenue driver as it scales as we enter into FY28, and have started taking orders and building backlog. Globally, the long-term case for EV adoption continues to strengthen, and we are seeing meaningful real-time market dynamics that support continued growth for ChargePoint. In North America, the economic argument for EV ownership has never been stronger. CNBC reported that average U.S. gas prices were approximately $4.10 per gallon as of late July, up roughly 31% from a year ago.

That cost differential has a direct impact on consumer purchasing decisions, with Cox Automotive reporting used EV sales reaching 42,923 units in May, up 5.5% month-over-month and 24.7% year-over-year. New EV models continue to enter the market across a widening range of price points, expanding the addressable population of EV buyers. Once consumers go electric, they stay. According to J.D. Power's 2026 U.S. Electric Vehicle Ownership Survey, 96% of EV owners would consider purchasing or leasing another EV, even without the now expired federal tax credit. In Europe, there are even stronger tailwinds. EV sales climbed 33% year-over-year in July, with year-to-date growth of 28%. France, Germany, and Britain posted EV sales growth of 81%, 46%, and 43%, respectively, in July alone.

In the U.K., electrified vehicles filled every spot on Auto Trader's top 10 fastest-selling used car rankings in July, which is the first time no petrol or diesel models appeared on that list. European subsidies continue to support demand, regulatory tailwinds are durable, and ChargePoint's position in Europe, strengthened by John Saffert's appointment and our growing install base, positions us well to benefit from this sustained growth. Let me frame the growth opportunity. We see four vectors that will define ChargePoint's trajectory, and we have a defensible position in every single one. First, autonomous vehicles. Every major AV platform will need reliable, high uptime, high throughput charging infrastructure at scale. ChargePoint is already a charging partner for leading AV companies, and Express was purpose-built for this use case. Second, truck electrification in Europe.

The commercial vehicle transition is accelerating under regulatory mandate, and our product portfolio and established European presence give us a first-mover advantage. Third, metro transit. Our transit wins are proof points, and we see significant opportunity in this market. Fourth, ChargePoint operators demanding super-fast charging. Express fundamentally changes the economics for CPOs operating high-utilization sites. The 600-plus-kilowatt capability is the best in the world, and it creates a value proposition that our competitors simply cannot match today. Our customer wins this quarter are strategic proof points. We announced the continued expansion of our long-standing relationship with Mercedes-Benz, extending our work together to simplify fleet electrification for Mercedes commercial customers in the U.K. and Germany. When one of the most iconic automotive brands in the world chooses to go deeper with ChargePoint, that tells you everything you need to know about the quality and reliability of our intelligent electrification platform.