EV charging solutions provider ChargePoint Holdings (NYSE: CHPT) beat Wall Street’s revenue expectations in Q2 CY2025, but sales fell by 9.2% year on year to $98.59 million. On the other hand, next quarter’s revenue guidance of $95 million was less impressive, coming in 11.5% below analysts’ estimates. Its GAAP loss of $2.85 per share was 27.3% below analysts’ consensus estimates.

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StockStory’s Take

ChargePoint’s latest quarter saw a negative market reaction as revenue declined year over year, despite exceeding analysts’ expectations. Management largely attributed the results to continued softness in hardware demand, particularly in the fleet segment, which faced delays from permitting and construction issues. CEO Richard Wilmer noted that, while core charging infrastructure remains in demand, “fleet, where a number of large deals pushed due to external factors,” kept results below the high end of expectations. The company also pointed to ongoing efforts to manage costs, with significant reductions in operating expenses and headcount announced during the quarter.

Looking forward, ChargePoint’s guidance reflects caution, with leadership citing macroeconomic uncertainty and ongoing deal pushouts as reasons for a conservative outlook. CFO Mansi Khetani emphasized that, “we are being prudent in our guidance,” and expects inventory levels to remain high through the rest of the year. Management believes improvement will hinge on operational efficiency, new product introductions, and potential recovery in the fleet segment, with a goal to achieve adjusted EBITDA breakeven next year if moderate revenue growth materializes.

Key Insights from Management’s Remarks

Management connected the quarter’s financial results to external delays in key deals and ongoing cost reductions, while highlighting advancements in product innovation and initial signs of market stabilization.

• Operational efficiency measures: ChargePoint implemented a significant reduction in non-GAAP operating expenses, including a 15% headcount cut, aiming to streamline sales and marketing and accelerate the product roadmap. Management stated these moves would help the company “move faster by streamlining operations.”
• Hardware demand delays: Fleet segment performance was impacted by external factors such as permitting and construction delays, pushing out large deals. Management expects these delayed deals to contribute to future quarters as conditions normalize.
• Subscription revenue growth: The company saw an 8% sequential increase in subscription revenue, driven by a growing installed base and improved support cost structure, particularly through outsourcing support functions to India.
• New product development: ChargePoint launched the Omniport connector and Europe’s first payment terminal meeting new regulatory standards, as well as expanding partnerships with automotive OEMs like Porsche and Hyundai.
• Market stabilization signs: Management highlighted predictable growth in U.S. electric vehicle sales and increased plug-in hybrid adoption as positive indicators for charging infrastructure demand. The company noted that 24% of shoppers are now very likely to consider an electric vehicle for their next purchase, supporting future growth potential.

Drivers of Future Performance

ChargePoint’s outlook for the coming quarters centers on cautious expectations due to market uncertainty, while focusing on cost controls, improved operational efficiency, and product innovation as drivers for recovery and profitability.

• Efficiency initiatives: Management is prioritizing ongoing reductions in operating expenses and restructuring sales and marketing to increase the ratio of quota-bearing representatives, with the goal of achieving adjusted EBITDA breakeven next year.
• Product and technology investments: ChargePoint is investing in software and hardware innovation, including next-generation products and AI-driven diagnostics, which are expected to improve gross margins and expand the addressable market as new products begin shipping next year.
• Potential fleet segment recovery: The company is optimistic that delayed fleet deals and an expanded pipeline—particularly in municipal transit and workplace charging—could drive a return to revenue growth, though timing remains uncertain given external headwinds like permitting and macroeconomic factors.

Catalysts in Upcoming Quarters

In the coming quarters, our analyst team will be watching (1) the pace at which delayed fleet deals convert to revenue and whether operational changes translate into improved margins, (2) the rollout and early adoption of new hardware and software products, especially Omniport and next-gen offerings, and (3) signs of stabilization or renewed growth in the broader EV charging market, particularly as OEM partnerships expand. Progress on inventory reduction and cost controls will also be key indicators of execution.

ChargePoint currently trades at $10.20, down from $10.87 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).

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