Good afternoon. And thank you for standing by. And welcome to ChargePoint Holdings, Inc. Third Quarter Fiscal Year 2026 Financial Results Conference Call. Please be advised today's call is being recorded. A replay will be available on ChargePoint Holdings, Inc.'s Investor Relations website. I would now like to hand the conference over to John Paolo Canton, Vice President, Communications. Please go ahead.

Good afternoon. And thank you for joining us on today's conference call to discuss ChargePoint Holdings, Inc.'s third quarter fiscal 2026 earnings results. This call is being webcast and can be accessed on the Investors section of our website at investors.chargepoint.com. With me on today's call are Rick Wilmer, our Chief Executive Officer, and Mansi Katani, our Chief Financial Officer. This afternoon, we issued our press release announcing results for the quarter ended October 31, 2025, which can be found on our website. We'd like to remind you that during the conference call, management will be making forward-looking statements, including our outlook for 2026. 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 September 8, 2025, 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 measures on this call, which we reconcile to GAAP in our earnings release and for certain historical periods in the investor presentation posted on the Investors section of our website. And finally, we'll be posting a transcript of this call to our investor relations 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. Today, we will provide a comprehensive review of our quarterly performance, share our perspective on current market conditions, discuss the progress we have made towards our three-year strategic plan, and highlight how our ongoing innovation is shaping the future of e-mobility. Financial performance this quarter exceeded expectations. Revenue surpassed the top end of our guidance, reaching $106 million, which marks a return to growth. This is a trend we anticipate to continue, especially as we move into 2026 with many of our new products ramping, our Eaton partnership accelerating, and numerous opportunities in Europe that we can now access with our new products. Our non-GAAP gross margin remained at a record high of 33%. We maintained strict cash discipline with cash utilization better than planned at $14 million. As growth returns, we continue on our path towards positive adjusted EBITDA. Additionally, we successfully completed a debt exchange securing nearly $110 million of deal discounts that benefit shareholders, reducing outstanding debt by $172 million and extending maturity to 2030. This transaction is a pivotal step in strengthening our financial foundation. By deleveraging at a significant discount, we are shifting enterprise value to shareholders and reinforcing our balance sheet. These strong results confirm the effectiveness of our strategy and the rigor of our operating model. Our CFO, Mansi Katani, will provide further details on this transaction later in the call. North America continues to see steady sales demand despite headlines to the contrary, as evidenced by key customer wins we will discuss shortly. In Europe, demand is not only robust but accelerating, with significant opportunities emerging across key markets. As we move into calendar year 2026, especially the second half, Europe stands out as a potential growth engine, fueled by favorable regulatory support, rapid…

Thank you, Rick. As a reminder, please see our earnings press release where we reconcile our non-GAAP results to GAAP. Our principal exclusions are stock-based compensation, amortization of intangible assets, and certain costs related to restructuring, settlements, and nonrecurring legal expenses. I will first go through the results of the quarter and then talk a bit about our recently announced debt reduction. I'm happy to announce that revenue for the third quarter exceeded our expectations, coming in at $106 million, significantly above the high end of our guidance range of $90 million to $100 million, up 7% sequentially and up 6% year on year. Network charging systems at $56 million accounted for 53% of third-quarter revenue, up 12% sequentially and up 7% year on year, marking a return to growth. Subscription revenue at $42 million was 40% of total revenue, up 5% sequentially and up 15% year on year as our total installed base continues to grow. Other revenue at $7 million was 7% of total revenue. In terms of geography, North America made up 85% of revenue, and Europe was 15%, consistent with recent quarters. Non-GAAP gross margin remains at a record high of 33%, flat sequentially and up seven percentage points year on year. Hardware gross margin was flat sequentially. Subscription margin continued its upward trajectory, achieving a new record of 63% on a GAAP basis and was even higher on a non-GAAP basis, driven by economies of scale and ongoing efficiencies in support costs. Non-GAAP operating expenses were $57 million, representing a 2% reduction both sequentially and year on year. We remain committed to prudent expense management, maintaining a disciplined approach that balances current constraints with selective investments intended to support long-term growth and margin expansion. Non-GAAP adjusted EBITDA loss was $19 million. This compares with a…

Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star then the number one on your keypad to raise your hand and enter the queue. If you would like to withdraw your question at any time, simply press star 1 again. Please note that ChargePoint Holdings, Inc. prefers that we ask each analyst to limit yourself to one question. You can return to the queue for a follow-up question. Thank you. Your first question comes from the line of Colin Rusch with Oppenheimer. Your line is open.

Thanks so much, guys, and congrats on the capital optimization here. I'm curious about the product evolution and the confidence that you're projecting around calendar year next year. Can you talk a little bit about any demand that you're seeing for virtual power plants, some of the geographies that are potentially in kind of tight supply situations from an electricity standpoint, and products that you're seeing that are starting to emerge outside of NEVI that could actually help inflect demand in a meaningful way as you go through the calendar year next year?

Yeah. Thanks, Colin. I think on two fronts, two things we've announced that both tie into the VPP play are, one, the new flex product line that we announced that's fully V2G and V2H enabled. That is particularly cost-effective and powerful when paired with the Eaton smart breaker and smart panel technology. This is something we showed at the RE plus show earlier this year, and that'll start rolling out in 2026. And then on the other end of the spectrum, the DC fast charging product that we've announced, our new Express line, there is a configuration of that product that can integrate directly with the DC grid. And the amount of capital savings that is enjoyed by doing so due to the elimination of a lot of power conversion and being able to integrate directly with solar and battery, for example, along with improved electrical efficiency provides not only fully bidirectional charging but very significant economic benefits in terms of CapEx and OpEx.

Thanks so much. If I can have a follow-up, I'm just curious about the potential for inventory throughout the course of this year as you work through some of the remaining items that you have on the balance sheet and go through some of this product transition.

Yeah. Hi, Colin. So we've made some strategic decisions to wind down certain commitments with some of our full-time manufacturers. And a part of that wind-down process sometimes involves having to take remaining components, which add to inventory. But I think we will see a small decline in Q4 most likely in the inventory balance, but we expect a more material decrease throughout next fiscal year as we sell through the existing inventory and manage our supply.

Thanks so much, guys. Your next question comes from the line of Mark Delaney with Goldman Sachs. Your line is open.

Yes. Good afternoon. Thanks very much for taking the question. I also had one on inventory, but more with respect to the gross margin. And I think in the past, the company had thought that as it works through some of the older inventory and shifts to these new products, there was an opportunity for that to expand margins. With what you're seeing in the business today and some momentum you've spoken about with these newer products, can you talk a bit more around whether or not you're still set for those new products to drive gross margins to the upside as they become a bigger contribution to the mix? And just anything you can share in terms of the timing as to when you may start seeing a bigger mix of those as you think about the inventory dynamic? Thanks.

Yeah. Hi, Mark. So I think improvements in hardware margin in the near term will be by product mix due to the fact that we've got inventory already produced and ready to ship. We anticipate hardware margins to remain around the current levels until we start selling through that existing inventory. Now in the current hardware margin that you see today, we are seeing some benefit of Asia manufacturing. But we expect to see larger improvements from Asia manufacturing as we sell through our existing inventory and as we start releasing new products, we'll expect margin improvement. But that should come in towards the latter half of next year. But overall, hardware margin always depends on the final mix.

Understood. I'll pass it on. Thank you. Your next question comes from the line of Chris Pierce with Needham. Your line is open.

Hey. Good afternoon. Can you hear me?

Yeah, Chris. Go ahead.

Okay. Perfect. Sorry. I was in the car. You've spoken kinda confidently to the second half of the calendar next year and projects in Europe. Can you just remind us, like, lead times? Are these projects that you've sort of already negotiated and still confident that you've won, or is this just confidence in the new product suite that you're rolling out?

It's probably more the former. I was in Europe recently personally meeting with many customers, talking about these new products. And as I mentioned in the prepared remarks, the response was overwhelmingly positive. There's a lot of people excited about our new DC architecture that I referenced a moment ago in the questions. And I'm quite confident that we'll win a number of fairly significant deals in Europe as we bring that product to market in the second half of next year.

Okay. And then just lastly, are these consumer, like, passenger car products? Are these, are you starting to see fleet wins, or are there not enough fleet vehicles out there? I'd kinda wanna get a sense of where you're seeing the momentum.

The combination of both. The new DC architecture is really well-suited for passenger vehicle DC fast charge. It also is really an ideal architecture for megawatt charging for large trucks. And we've talked to customers in both of those areas, specifically in Europe.

Okay. Thank you. I'll pass it on. Your next question comes from the line of Bill Peterson with JPMorgan. Line is open.

Yes. Hi. Thanks for taking my questions. I guess sort of housekeeping. Relative to your expectations on the last quarter call, you came in nicely ahead of expectations. Can you provide some color on what came in better than expected? And then anything notable within the network hardware in terms of mix, and then just adding the second question on here to get back in the queue. Within your expectations for the second half in next year, your growth expectations, would this, in your view, be enough to push you to profitability?

Yes. So in terms of the first part of the question, Bill, the significant beat was mostly due to a boost in residential billings due to the expiration of the federal EV credits that we saw. We saw a huge boost in sales of our home products. The commercial did well also compared to the prior quarter, but the significant beat was mostly due to this boost in the residential billings. In terms of growth in the second half in EBITDA, we're not guiding to a timeframe, but EBITDA, as we've mentioned before, will come with growth in revenue, which we are significantly focused on. And as we've mentioned before, with the new products and the increased demand in Europe and the Eaton partnership, we think the second half should be pretty strong.

Thank you. Your next question comes from the line of Chris Dandrinos with RBC Capital Markets. Line is open.

Yeah. Thank you. I wanted to follow-up a bit more on the Eaton partnership and hopefully just asking you to provide a bit more information about where you're at with that relationship, how that partnership's going, and I guess just any broadly, any extra information you can provide? Thanks.

Yeah. I would characterize that as exceeding expectations. The amount of innovation we've been able to unlock compared to what I expected when we began the relationship has increased again, to exceed expectations. I gave a couple of examples earlier. On our home via home solution that is really differentiated from the market as a result of our partnership and innovation in collaboration with Eaton and likewise on the DC fast charge, the DC-only version of that on a DC grid built by is a very differentiated product. So expectations exceeded operationally. We're working very well with Eaton. Shipping a lot of cobranded products this past quarter that we just closed and expect that to continue to grow.

Thank you. That's it for me.

Again, if you would like to ask a question, please press star then the number one on your telephone keypad. Your next question comes from the line of Craig Irwin with ROTH Capital Partners. Your line is open.

Good evening and thanks for taking my questions. So Rick, the part of your prepared comments that was a big surprise is the funding. The fact that this is driving installations today. Can you maybe talk about the runway here as far as the financing and whether you're seeing some of the financing from the states come through in a more material way now that some of the uncertainty out of DC is behind us?

Yeah. With respect to NEVI, we are seeing projects move forward. As we mentioned in the prepared remarks, 40 states now are active in NEVI and awarding contracts, and we're active in many of those.

And are you seeing similar levels of support, similar levels of financial support and sort of subsidy for new stations? Or are these basically flat, improving? How would you characterize any change there?

You kind of return to where it was before it was paused. I think it's a good way to characterize it.

Excellent. That's good news. Well, thanks for taking my question.

And with no further questions in queue, that will conclude today's conference call. You may now disconnect.