ChargePoint Holdings, Inc. (NYSE: CHPT) disappointed investors after reporting dismal bottom-line results for the first quarter of Fiscal 2023 (ended April 30, 2022). Its loss per share in the quarter was 35% wider than the consensus estimate. Meanwhile, revenues exceeded the consensus estimate by 7.8%.
After losing 4.9% during the day, shares of the company, which provides infrastructure for electric vehicles, slipped another 2.7% in the extended trading session on Tuesday.
Financial Highlights
In the quarter, ChargePoint posted a loss of $0.27 per share, higher than the consensus loss estimate of $0.20 per share. However, the bottom line was way better than the year-ago tally of a loss of $0.83 per share.
Revenues in the quarter stood at $81.63 million, up from the consensus estimate of $75.7 million and the company’s projection of $72 million to $77 million. On a year-over-year basis, the top line increased 101.5%, driven by a 122.2% jump in networked charging systems, a 63% rise in subscriptions, and a 53.7% surge in other revenues.
The cost of revenues (non-GAAP) in the quarter increased 117.9% year-over-year, while the adjusted gross margin declined 600 basis points (bps) to 17%. Non-GAAP operating expenses increased 78% year-over-year in the quarter. Costs and supply-chain headwinds were spoilsports in the quarter.
Balance Sheet and Cash Flow
Exiting the first quarter, ChargePoint’s cash and cash equivalents were $540.6 million, up 71.5% from the end of Fiscal 2022 (ended January 31, 2022). Total liabilities at $622.2 million grew 101.4% quarter-over-quarter.
Net cash used for operating activities was $71 million and capital spending was $3.2 million.
Projections
ChargePoint anticipates revenues of $96 million to $106 million in the second quarter of Fiscal 2023 (ending July 31, 2022). This projection reflects a year-over-year jump of 80% at the mid-point.
For Fiscal 2023 (ending January 31, 2023), the company anticipates revenues in the range of $450 million to $500 million, representing year-over-year growth of 96%. Non-GAAP gross margin is expected to be 22% to 26%, and operating expenses are anticipated between $350 million and $370 million.
Official Comments
ChargePoint’s President and CEO, Pasquale Romano, said, “Positive first-quarter results, despite expected significant headwinds due to global supply constraints, are a testament to the strength of our business.”
“Our investments in a comprehensive portfolio for all verticals we serve continue to set us apart when customers seek a charging solution,” Romano added.
Stock Rating
Overall, the Street is optimistic about the growth prospects of CHPT and has a Strong Buy consensus rating based on nine Buys and three Holds. ChargePoint’s average price target of $23.83 suggests 86.32% upside potential from current levels.
Shares of ChargePoint have declined 50.7% over the past year.
Bloggers’ Stance
According to TipRanks, financial bloggers are 80% Bullish on CHPT, compared with the sector average of 66%.
Conclusion
Despite solid top-line drivers, CHPT has to work on its costs to protect its profitability. Further, the growing need and adoption of electric vehicles as well as support from the government are likely to work in favor of companies like ChargePoint.
Read full Disclosure
