Yesterday, ChargePoint announced its Q2 earnings, and the results were impressive.
I've commented on ChargePoint's acquisition strategy in the past. The pivot to a more software-oriented business is a wise one. As chargers become more ubiquitous in the home, public charging will likely evolve into a different game that doesn't just include selling electrons.
On that note, ChargePoint officially announced and discussed their strategy surrounding the acquisitions of ViriCiti and has-to-be, both of which should impact their subscription revenue moving forward. Q2's subscription revenue was ~$12M, so we'll be watching how quickly that number increases in the coming quarters.
For the second quarter, revenue was $56.1 million, an increase of 61% from $35.0 million in the prior year's same quarter and 91% over the last quarter. It broke down as follows:
- Networked charging: $40.9M
- Subscriptions: $12.1M
- Services: $3.1M
The second quarter's non-GAAP gross margin, which excludes stock-based compensation expense, was 23.1% compared to 25.7% in the same quarter the prior year.
Interestingly, the gross margins on the software product declined significantly. In prior quarters, software revenues carried a gross margin of approximately 50% - in Q2, they were closer to 35%. ChargePoint defended that decline on their earnings call by stating this is a "land grab" play and declining margins are a near-term sacrifice for long-term gain.
As of July 31, 2021, cash on the balance sheet was $618.5 million, and I expect that the excess cash will continue to be used for acquisitions over the next 12 months.
Overall, an excellent quarter for ChargePoint and a positive for the entire EV charging sector as the market grows and matures.