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What changed in ChargePoint Holdings, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of ChargePoint Holdings, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+561 added−518 removedSource: 10-K (2023-04-03) vs 10-K (2022-04-04)

Top changes in ChargePoint Holdings, Inc.'s 2023 10-K

561 paragraphs added · 518 removed · 381 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

73 edited+42 added−27 removed48 unchanged
Biggest changeChargePoint believes the primary differentiators on which it competes include: • variety and quality of networked charging system product offerings; • product performance; • Cloud Services functionality for its network; • ease of use; • brand awareness; • quality of support; • size and scale of its networked charging system; and • scale of operations.
Biggest changeChargePoint thus believes its primary differentiators are: • comprehensive and fully integrated Cloud Services stack for all AC and DC charging system solutions for each charging vertical – commercial, fleet and residential; 8 Table of Content • size and scale of its networked charging system, including roaming partners; • variety and quality of networked charging system product offerings for AC and DC applications; • reliable product performance, testing and certifications; • ease of use of its Cloud Services, mobile and in-dash driver applications and features; • brand awareness; • quality of driver and charging system owner support; and • scale of operations.
With a singular focus on EV charging, ChargePoint offers a complete set of networked charging solutions for most EV charging use cases in North America and Europe. • Go to Market. ChargePoint has built a strong marketing and sales engine in North America and Europe, with an established sales channel, digital marketing capability and substantial direct sales.
With a singular focus on EV charging, ChargePoint offers a complete set of networked charging solutions for most EV charging use cases in North America and Europe. • Go to Market. ChargePoint has built a strong marketing and sales engine in North America and Europe, with an established direct sales channel, digital marketing capability and substantial channel sales.
ChargePoint intends to enter into a partnerships and similar strategic relationships with third-party owners and operators of charging stations and alternative energy infrastructure providers to provide customers a financed charging solution that enables customers to pay for charging infrastructure as an operational expense, and a turnkey charging solution that enables customers offering public charging to host a station at zero cost to them. • Invest incrementally in marketing and sales .
ChargePoint intends to enter into partnerships and similar strategic relationships with third-party owners and operators of charging stations and alternative energy infrastructure providers to provide customers a financed charging solution that enables customers to pay for charging infrastructure as an operational expense, and a turnkey charging solution that enables customers offering public charging to host a station at zero cost to them. • Invest incrementally in marketing and sales .
Additionally, ChargePoint is governed by a California state privacy law called the California Consumer Privacy Act of 2018 (“CCPA”), which contains requirements similar to GDPR for the handling of personal information of California residents. The CCPA establishes a privacy framework for covered businesses, including an expansive definition of personal information and data privacy rights for California residents.
Additionally, ChargePoint is governed by a California state privacy law called the California Consumer Privacy Act of 2018 (“CCPA”), which contains requirements similar to the GDPR for the handling of personal information of California residents. The CCPA establishes a privacy framework for covered businesses, including an expansive definition of personal information and data privacy rights for California residents.
Any such changes in the laws and regulations, or ChargePoint’s ability to qualify the materials it uses for exclusions under such laws and regulations, could adversely affect ChargePoint’s operating expenses. Similar laws exist in other jurisdictions where ChargePoint operates. Additionally, in the EU, ChargePoint is subject to the Waste Electrical and Electronic Equipment Directive (“WEEE Directive”).
Any changes in the laws and regulations, or ChargePoint’s ability to qualify the materials it uses for exclusions under such laws and regulations, could adversely affect ChargePoint’s operating expenses. Similar laws exist in other jurisdictions where ChargePoint operates. Additionally, in the EU, ChargePoint is subject to the Waste Electrical and Electronic Equipment Directive (“WEEE Directive”).
In addition, ChargePoint has joined the Responsible Business Alliance (RBA) and adopted its Supplier Code of Conduct, which emphasizes business ethics in its supply chain through audit and oversight programs focused on promoting ethical and sustainable labor, health and safety, environmental business practices.
In addition, ChargePoint has joined the Responsible Business Alliance (RBA) and adopted its Supplier Code of Conduct, which emphasizes business ethics in its supply chain through audit and oversight programs focused on promoting ethical and sustainable labor, health and safety, and environmental business practices.
Available Information The Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), free of charge on ChargePoint’s website, investors.chargepoint.com as soon as reasonably practicable after they are electronically filed with or furnished to the Securities and Exchange Commission (“SEC”).
Available Information The Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are made available free of charge on ChargePoint’s website, investors.chargepoint.com as soon as reasonably practicable after they are electronically filed with or furnished to the Securities and Exchange Commission (“SEC”).
The WEEE Directive provides for the creation of collection scheme where consumers return waste electrical and electronic equipment to merchants, such as ChargePoint. If ChargePoint fails to properly manage such waste electrical and electronic equipment, it may be subject to fines, sanctions, or other actions that may adversely affect ChargePoint’s financial operations.
The WEEE Directive provides for the creation of a collection scheme where consumers return electrical and electronic equipment waste to merchants, such as ChargePoint. If ChargePoint fails to properly manage such electrical and electronic equipment waste, it may be subject to fines, sanctions, or other actions that may adversely affect ChargePoint’s financial operations.
These include retail centers, offices, medical complexes, schools, airports, convenience stores, recreation centers and fast fueling sites, among others. ChargePoint believes commercial businesses view charging as essential and invest to attract tenants, employees, customers and visitors, generate direct and indirect income, and achieve sustainability goals.
These include retail centers, offices, medical complexes, schools, airports, municipalities, convenience stores, recreation centers and fast fueling sites, among others. ChargePoint believes commercial businesses view charging as essential and invest to attract tenants, employees, customers and visitors, generate direct and indirect income, and achieve sustainability goals.
The GDPR has increased ChargePoint’s responsibility and potential liability in relation to all types of personal data that ChargePoint processes and ChargePoint may be required to put in place additional mechanisms to ensure compliance with the GDPR, which could divert management’s attention and increase its cost of doing business, and despite ChargePoint’s ongoing efforts to bring its practices into compliance with the GDPR, it may not be successful.
The GDPR has increased ChargePoint’s responsibility and potential liability in relation to all EU personal data that ChargePoint processes and ChargePoint may be required to put in place additional mechanisms to ensure compliance with the GDPR, which could divert management’s attention and increase its cost of doing business, and despite ChargePoint’s ongoing efforts to bring its practices into compliance with the GDPR, it may not be successful.
ChargePoint advocates for policies that advance electric mobility and ensure a healthy industry with a focus on competition, innovation and customer choice, including: ▪ Support for vehicle policy and climate action, such as zero emission vehicle requirements, fossil fuel bans and transit electrification directives; ▪ Partnership with North America’s leading utilities to scale the new electric fueling network, including enabling the resale of electricity, securing fast charging-friendly tariffs, protecting site host choice, developing make-ready programs, creating rebate programs and informing utility commission decisions and legislation; and ▪ Reduction in barriers to infrastructure deployment including construction costs, permitting, building codes and right to charge policies for renters and tenants.
ChargePoint advocates for policies that advance electric mobility and ensure a healthy industry with a focus on competition, innovation and customer choice, including: ▪ Support for vehicle electrification policy and climate action, such as zero emission vehicle requirements, fossil fuel bans and transit electrification directives; ▪ Partnership with North America’s leading utilities to scale the new electric fueling network, including enabling the resale of electricity, securing fast charging-friendly tariffs, developing make-ready programs, creating customer incentive programs and informing utility commission decisions and legislation; and ▪ Reduction in barriers to infrastructure deployment including construction costs, permitting, building codes and right to charge policies for renters and tenants.
Privacy and Data Security Laws ChargePoint is currently subject, and/or may in the future be subject, to numerous privacy and data security laws.
Privacy and Data Security Laws ChargePoint is currently subject, and may in the future be subject, to numerous privacy and data security laws.
ChargePoint also fosters a strong corporate culture that promotes high standards of ethics and compliance for its business, including policies that set forth principles to guide employees, executives, and directors, such as its Code of Business Conduct and Ethics.
Ethical Business Practices. ChargePoint also fosters a strong corporate culture that promotes high standards of ethics and compliance for its business, including policies that set forth principles to guide employees, executives, and directors, such as its Code of Business Conduct and Ethics.
ChargePoint believes its portfolio breadth 8 Table of Contents and range of Cloud solutions position it well to succeed broadly in Europe, and thus has invested, and will continue to invest, heavily in its strategy to establish a successful pan-European presence that maps to major pan-European customers and provides a seamless experience for drivers as they travel.
ChargePoint believes its portfolio breadth and range of Cloud solutions position it well to succeed broadly in Europe, and thus has invested, and will continue to invest, heavily in its strategy to establish a successful pan-European presence that maps to major pan-European customers and provides a seamless experience for drivers as they travel.
ChargePoint believes it offers among the industry’s leading hardware for Level 2 AC and Level 3 DC charging, and does not sell these solutions without a Cloud Services subscription. ChargePoint’s solutions deliver differentiated features and high efficiency in power and footprint, with a modular and scalable architecture created for high availability, easy expansion and efficient serviceability.
ChargePoint believes it offers among the industry’s leading hardware for AC and DC charging and does not sell these solutions without a Cloud Services subscription. ChargePoint’s solutions deliver differentiated features and high efficiency in power and footprint, with a modular and scalable architecture created for high availability, easy expansion and efficient serviceability.
ChargePoint works with third-party fulfillment partners that deliver its products from multiple locations, which it believes allows it to reduce order fulfillment time and shipping costs. Seasonality Almost all of ChargePoint’s charging stations are installed and utilized outdoors and ChargePoint operates and conducts its sales primarily in the Northern Hemisphere.
ChargePoint works with third-party fulfillment partners that deliver its charging stations from multiple locations, which it believes allows it to reduce order fulfillment time and shipping costs. Seasonality Almost all of ChargePoint’s commercial and fleet charging stations are installed and utilized outdoors and ChargePoint operates and conducts its sales primarily in the Northern Hemisphere.
In both North America and Europe, ChargePoint intends to continue attracting new customers and pursuing a “land-and-expand” model which encourages existing customers to increase their charging footprint with ChargePoint over time as EV penetration increases. Manufacturing, Logistics and Fulfillment ChargePoint designs its products in-house and outsources production to contract manufacturers based in the United States, Mexico and Europe.
In both North America and Europe, ChargePoint intends to continue attracting new customers and pursuing a “land-and-expand” model which encourages existing customers to increase their charging footprint with ChargePoint over time as EV penetration increases. 9 Table of Content Manufacturing, Logistics and Fulfillment ChargePoint designs its products in-house and outsources production to contract manufacturers based in the United States, Mexico and Europe.
To achieve this mission, ChargePoint aims to develop its individual, team and leadership capabilities, attract the best talent from diverse backgrounds, retain its talent through competitive rewards, benefits and by creating a winning culture, and engaging its talent by building a culture of feedback, inclusion and recognition.
To achieve this mission, ChargePoint aims to develop its individual, team and leadership capabilities, attract the best talent from diverse backgrounds, retain its talent through a variety of means including competitive rewards and benefits, creating a winning culture, and engaging its talent by building a culture of feedback, inclusion and recognition.
ChargePoint has received certification for some products in the European Union under the Measurement Instrument Directive (MID), in the United Kingdom under the Measurement Instrument Regulation (MIR), and in California under the California Type Evaluation Program (CTEP), as regulated by the Department of Food and Agriculture Division of Measurement Standards.
ChargePoint has received certification for some products in the European Union under the Measurement Instrument Directive (MID), in the United Kingdom under the Measurement Instrument Regulation (MIR), the United States under the National Type Evaluation Program (NTEP), and in California under the California Type Evaluation Program (CTEP) as regulated by the Department of Food and Agriculture Division of Measurement Standards.
Retailers can optimize charging station locations and pricing for foot traffic and loyalty, employers can make fueling an efficient benefit to attract talent, parking operators can vary pricing to reflect market conditions, and fleet operators can manage use cases from having drivers take their own vehicles home every day to high-power, high-complexity centralized fleet depots.
Retailers can optimize charging station locations and pricing for foot traffic and loyalty, employers can make fueling an efficient benefit to attract talent, parking operators can vary pricing to reflect market conditions, and fleet operators can manage use cases from 6 Table of Content having drivers take their own vehicles home every day to high-power, high-complexity centralized fleet depots.
Growth Strategies ChargePoint estimates it had approximately a 70% market share in publicly available networked Level 2 AC charging in North America as of January 31, 2022. ChargePoint began European operations in late 2017 and currently operates in 16 European countries. It expects significant market opportunities for fleet solutions as fleet EVs begin to arrive in more meaningful volume.
Growth Strategies ChargePoint estimates it had approximately a 70% market share in publicly available networked AC charging in North America as of January 31, 2023. ChargePoint began European operations in late 2017 and currently operates in 16 European countries. It expects significant market opportunities for fleet solutions as fleet EVs begin to arrive in more meaningful volume.
ChargePoint believes it competes favorably with respect to each of these factors. North America ChargePoint believes it leads the North America market in the sale of commercial Level 2 AC chargers.
ChargePoint believes it competes favorably with respect to each of these factors. North America ChargePoint believes it leads the North America market in the sale of commercial AC chargers.
ChargePoint’s growth strategies to continue to scale networked EV charging are as follows: • Accelerate new product offerings . ChargePoint intends to maintain its leadership position with continued efficient investment in the development of charging station technologies and Cloud solutions.
ChargePoint’s growth strategies to continue to scale networked EV charging are as follows: • Accelerate alternative EV charging offerings . ChargePoint intends to maintain its leadership position with continued efficient investment in the development of charging station technologies and Cloud solutions.
The Portfolio ChargePoint primarily generates revenue through the sale of networked charging hardware, combined with its Cloud Services billed as a subscription, and available through each charging port. ChargePoint also provides an extended parts and labor warranty, Assure, as an annual subscription.
The Portfolio ChargePoint primarily generates revenue through the sale of networked charging hardware combined with its Cloud Services billed as a subscription. ChargePoint also provides an extended parts and labor warranty, Assure, as an annual subscription.
Some examples include: • The ability for commercial customers to adjust the rate at which vehicles charge to match the natural parking duration at the site and to avoid peak or demand charges. 6 Table of Contents • Charging infrastructure made available to the public during the day can be reserved for private fleets at night.
Some examples include: • The ability for commercial customers to adjust the rate at which vehicles charge to match the natural parking duration at the site and to avoid peak or demand charges. • Charging infrastructure made available to the public during the day can be reserved for private fleets at night.
ChargePoint also has a strong market position in Level 1 AC chargers for use at home or multifamily settings and high-power Level 3 DC chargers for urban fast charging, corridor or long-trip charging and fleet applications.
ChargePoint also has a strong market position in AC chargers for use at home or multifamily settings and high-power DC chargers for urban fast charging, corridor or long-trip charging and fleet applications.
ChargePoint accesses the commercial market via its direct sales force (inside and field teams) and by channel partners. • Fleet : Fleet customers are organizations that operate vehicle fleets in delivery/logistics, sales/service/motor pool shared transit and ride-sharing service operators.
ChargePoint accesses the commercial market via its direct sales force (inside and field teams) and by channel partners. 7 Table of Content • Fleet : Fleet customers are organizations that operate vehicle fleets in delivery/logistics, sales/service/motor pool shared transit and ride-sharing service operators.
Go to Market Strategy ChargePoint sells networked charging solutions in North America and Europe, and as of January 31, 2022, its customers base include 76% of the 2021 Fortune 50 list of companies. It is focused on three key verticals: commercial, fleet and residential. • Commercial : Commercial businesses already own or lease parking and many wish to electrify.
Go to Market Strategy ChargePoint sells networked charging solutions in North America and Europe, and as of January 31, 2023, its customers base includes 80% of the 2021 Fortune 50 list of companies. It is focused on three key verticals: commercial, fleet and residential. • Commercial : Commercial businesses already own or lease parking and many wish to electrify.
Compliance with such regulation(s) may cause installation delays. OSHA ChargePoint is subject to the Occupational Safety and Health Act of 1970, as amended (“OSHA”). OSHA establishes certain employer responsibilities, including maintenance of a workplace free of recognized hazards likely to cause death or serious injury, compliance with standards promulgated by OSHA and various record keeping, disclosure and procedural requirements.
OSHA ChargePoint is subject to the Occupational Safety and Health Act of 1970, as amended (“OSHA”). OSHA establishes certain employer responsibilities, including maintenance of a workplace free of recognized hazards likely to cause death or serious injury, compliance with standards promulgated by OSHA and various record keeping, disclosure and procedural requirements.
ChargePoint offers both an upfront sale of the charging stations with separate payment for Cloud Services and Assure, or ChargePoint as a Service, referred to as CPaaS, in which charging station hardware, Cloud Services and Assure are bundled into an annual subscription. • Hardware Portfolio Powered by Cloud Services .
ChargePoint offers both an upfront sale of the charging station hardware with separate subscriptions for Cloud Services and Assure, or ChargePoint as a Service, referred to as CPaaS, in which charging station hardware, Cloud Services and Assure are bundled into a multi-year or annual subscription. • Hardware Portfolio Powered by Cloud Services .
ChargePoint’s success depends in part upon its ability to obtain and maintain proprietary protection for ChargePoint’s products, technology and know-how, to operate without infringing the proprietary rights of others, and to prevent others from infringing ChargePoint’s proprietary rights. As of January 31, 2022, ChargePoint had 83 U.S. patents issued and 38 U.S. pending non-provisional patent applications.
ChargePoint’s success depends in part upon its ability to obtain and maintain proprietary protection for ChargePoint’s products, technology and know-how, to operate without infringing the proprietary rights of others, and to prevent others from infringing ChargePoint’s proprietary rights. As of January 31, 2023, ChargePoint had 89 U.S. patents issued and 45 U.S. pending non-provisional patent applications.
For instance, CERCLA, also known as the Superfund law, in the United States and comparable state laws impose liability, without regard to fault or the legality of the original conduct, on certain classes of persons that contributed to the release of a hazardous substance into the environment.
For instance, Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), also known as the Superfund law, in the United States and comparable state laws impose liability, without regard to fault or the legality of the original conduct, on certain classes of persons that contributed to the release of a hazardous substance into the environment.
Because ChargePoint’s primary business model does not include owning and operating networked charging stations, ChargePoint believes its primary competitors include other OEMs, manufacturers and providers of EV charging station solutions, such as Blink Charging Co., and SemaConnect, Inc. in Level 2 AC charger; Wallbox N.V and Blink Charging Co. in Level 1 AC chargers; and ABB Ltd. and Tritium DCFC in Level 3 DC chargers.
Because ChargePoint’s primary business model does not include owning and operating networked charging stations, ChargePoint believes its primary competitors include other OEMs, manufacturers and providers of EV charging station solutions, such as Blink Charging Co. in AC chargers; Wallbox N.V in AC residential chargers; and ABB Ltd. and Tritium DCFC Ltd. in DC chargers.
Such issued patents and any patents derived from such applications or applications that claim priority from such applications, if granted, 11 Table of Contents would be expected to expire between 2024 and 2039, excluding any additional term for patent term adjustments.
Such issued patents and any patents derived from such applications or applications that claim priority from such applications, if granted, would be expected to expire between 2024 and 2042, excluding any additional term for patent term adjustments.
ChargePoint estimates the avoided amount of greenhouse gas emissions equates to planting approximately 14 million tree seedlings, capturing carbon from 1,000,000 acres of U.S. forests and recycling 36 million bags of waste, according to the United States Environmental Protection Agency’s Greenhouse Gas Equivalencies.
ChargePoint estimates the avoided amount of greenhouse gas emissions equates to planting approximately 22 million tree seedlings, capturing carbon from 1.6 million acres of U.S. forests or recycling 57 million bags of waste, according to the United States Environmental Protection Agency’s Greenhouse Gas Equivalencies.
By calendar year 2021, most major manufacturers of passenger cars, trucks of all sizes, buses and industrial vehicles have committed to electrification, and governments have made it clear from both policy and funding perspectives that the future of transportation is electric.
In the last several years, most major manufacturers of passenger cars, trucks of all sizes, buses and industrial vehicles have committed to electrification, and governments have made it clear from both policy and funding perspectives that the future of transportation is electric.
For example, passenger EV sales are expected to increase from 2.7% of new vehicles sold in 2019 to 43.2% in 2030 in the United States and Europe according to the Bloomberg New Energy Finance Electric Vehicle Outlook (the “BNEF Report”).
For example, passenger EV sales are expected to increase from 2% of new vehicles sold in 2019 to 44% in 2030 in the United States and 3% of new vehicles sold in 2019 to 60% in 2030 in Europe according to the Bloomberg New Energy Finance Electric Vehicle Outlook (the “BNEF Report” issued in February 2023).
CERCLA also authorizes the EPA and, in some instances, third-parties to act in response to threats to the public health or the environmental and to seek to recover from the responsible classes of persons the costs they incur.
CERCLA also authorizes the Environmental 11 Table of Content Protection Agency and, in some instances, third-parties to act in response to threats to the public health or the environment and to seek to recover from the responsible classes of persons the costs they incur.
ChargePoint is driving the shift to electric mobility by providing networked charging solutions in North America and Europe for all segments: commercial (e.g., retail, workplace, parking, recreation, education and highway fast charge), fleet (e.g., delivery, logistics, motor pool, transit and shared mobility) and residential (e.g., homes, apartments and condominiums).
ChargePoint is broadly driving the shift to electric mobility by providing networked charging solutions in North America and Europe across commercial (e.g., retail, workplace, hospitality, parking, recreation, municipal, education and highway fast charge), fleet (e.g., delivery, take home, logistics, motor pool, transit and shared mobility) and residential (e.g., single family homes and multi-family apartments and condominiums) verticals.
Further, California voters approved a new privacy law, the California Privacy Rights Act (“CPRA”) in November, 2020. Effective starting on January 1, 2023, the CPRA will significantly modify the CCPA, including by expanding the consumers’ rights with respect to certain sensitive personal information.
Further, California voters approved a new privacy law amending the CCPA, the California Privacy Rights Act (“CPRA”) in November, 2020. Effective January 1, 2023, the CPRA significantly modifies the CCPA, including by expanding consumers’ rights with respect to certain sensitive personal information, and sunsetting exemptions for business-to-business personal information and employee information.
For example, on March 2, 2021, Virginia enacted the Virginia Consumer Data Protection Act (“CDPA”), which becomes effective on January 1, 2023, and on June 8, 2021, Colorado enacted the Colorado Privacy Act (“CPA”) which takes effect on July 1, 2023.
For example, Virginia enacted the Virginia Consumer Data Protection Act (“CDPA”), which became effective on January 1, 2023, the Colorado Privacy Act (“CPA”) which takes effect on July 1, 2023; the Utah Consumer Privacy Act (“UCPA”) which becomes effective December 1, 2023; and the Connecticut Data Privacy Act, which becomes effective on July 1, 2023.
Accordingly, with application-specific exceptions such as occasional drives beyond a passenger vehicle’s battery range or the need to support centralized fleet depots, ChargePoint believes EV charging will be primarily a top-up model and that fueling will transition from an inconvenient, dedicated stop at a destination to convenient charging mapped to the dwell time of the vehicle, whether passenger or fleet.
Accordingly, with application-specific exceptions such as occasional trips beyond a passenger vehicle’s battery range or the need to support fleet depots, ChargePoint believes EV charging will principally transition from an inconvenient, dedicated stop at a destination to convenient charging mapped to the dwell time, and for certain fleet applications, the size and route requirements, of the vehicle.
In addition to competitive base salaries, ChargePoint offers compensation and benefits programs such as medical, dental, and vision insurance, an employee assistance program, health and dependent care flexible spending accounts, a 401(k) plan, health savings account, basic life insurance, accidental death and dismemberment insurance, short-term and long-term disability insurance, and commuter benefits.
ChargePoint offers competitive salaries and benefits programs such as medical, dental, and vision insurance, health and dependent care flexible spending accounts, a 401(k) plan, health savings account, life insurance, accidental death and dismemberment insurance, short-term and long-term disability insurance, and commuter benefits. Employees are also eligible to participate in its Employee Stock Purchase Program and discretionary equity awards program.
ChargePoint’s research and development teams are primarily located in the Company’s headquarters in Campbell, California, its facilities in Gurgaon, India, and its European locations in Radstadt, Austria, Amsterdam, Netherlands and Reading, the United Kingdom. As of January 31, 2022, ChargePoint had over 550 full-time employees in its research and development activities.
ChargePoint’s research and development teams are primarily located in the Company’s headquarters in Campbell, California, its facilities in Gurgaon, India, and its European locations in Radstadt, Austria, Amsterdam, Netherlands and Reading, the United Kingdom.
For example, maintaining patents in the United States and other countries requires the payment of maintenance fees which, if ChargePoint is unable to pay, may result in loss of its patent rights. If ChargePoint is unable to do so, its ability to protect its intellectual property or prevent others from infringing its proprietary rights may be impaired.
For example, maintaining patents in the United States and other countries requires the payment of maintenance fees which, if ChargePoint is unable to pay, may result in loss of its patent rights.
Additionally, ChargePoint had 17 issued foreign patents (Canada, Japan, Australia, New Zealand, China, Taiwan and Korea) and 10 foreign patent applications currently pending in various foreign jurisdictions. In addition, as of January 31, 2022, there were two pending Patent Cooperation Treaty applications. These patents relate to various EV charging station designs and/or EV charging functionality.
Additionally, ChargePoint had 33 issued foreign patents and 15 foreign patent applications currently pending in various foreign jurisdictions. In addition, as of January 31, 2023, there were three pending Patent Cooperation Treaty applications. These patents relate to various EV charging station designs and/or EV charging functionality.
For example, ChargePoint believes that passenger EV drivers will typically charge overnight at home or during the day at work, top-up with Level 2 alternating current (“AC”) charging while parked at a shopping center for a few hours, and access Level 3 direct current (“DC”) charging for occasional road trips.
For example, ChargePoint believes passenger EV drivers will typically charge overnight at home or during the day at work, top-up with AC charging while parked at a shopping center or other commercial locations for a few hours, and access DC charging for occasional road trips beyond their battery range.
ChargePoint also maintains a whistleblower policy and anonymous hotline for the confidential reporting of any suspected policy violations or unethical business conduct on the part of its businesses, employees, executives, directors, or vendors. Employee Safety and Wellness . In response to the COVID-19 pandemic, ChargePoint implemented significant changes to help keep its employee community safe.
ChargePoint also maintains a whistleblower policy and anonymous hotline for the confidential reporting of any suspected policy violations or unethical business conduct on the part of its businesses, employees, executives, directors, or vendors. Employee Safety and Wellness . ChargePoint provides various health and wellness resources to help its employees maintain and improve their well-being.
Item 1. Business. ChargePoint Holdings, Inc. (“ChargePoint”) is a leading electric vehicle (“EV”) charging technology solutions provider, and is creating a new fueling network to move people and goods on electricity.
Item 1. Business. ChargePoint Holdings, Inc. (“ChargePoint”) is a leading electric vehicle (“EV”) charging technology solutions provider.
For example, some U.S. states, members of the European Economic Area, the United Kingdom, Mexico, China, and many other jurisdictions in which ChargePoint operates has adopted some form of privacy and data security laws and regulations which impose significant compliance obligations.
For example, some U.S. states, members of the European Economic Area, the United Kingdom, Mexico, China, and many other jurisdictions in which ChargePoint operates or plans to operate have adopted some form of privacy and data security laws and regulations that impose significant compliance obligations. 10 Table of Content The European Union’s General Data Protection Regulation (“GDPR”) covers the European Economic Area (“EEA”), and countries such as Switzerland and the UK have adopted similar regulations.
Employees are also eligible to participate in its Employee Stock Purchase Program and 12 Table of Contents discretionary equity awards program. ChargePoint designs its employee benefits programs to be competitive in relation to the market. ChargePoint adjusts its employee benefits programs as needed based upon regular monitoring of applicable laws and practices and the competitive market.
ChargePoint designs its employee benefits programs to be competitive in relation to the market. ChargePoint adjusts its employee benefits programs as needed to retain key talent based upon regular monitoring of applicable laws and practices and the competitive market.
Key focus and investment areas to achieve this goal include, among others, diversity and inclusion, emphasis on ethical business practices, employee safety and wellness, and competitive compensation benefits. Diversity and Inclusion . ChargePoint believes that a company culture focused on diversity and inclusion will help enable ChargePoint to deliver on its mission.
Key focus and investment areas to achieve this goal include, among others, diversity and inclusion, emphasis on ethical business practices, and employee safety and wellness. Diversity and Inclusion .
As of January 31, 2022, ChargePoint has activated approximately 174,000 ports on its network, including approximately 11,500 DC ports, excluding single family home ports. ChargePoint’s roaming integrations enable EV drivers to access more than 300,000 additional ports in North America and Europe through ChargePoint’s mobile and in-dash applications. ChargePoint believes its business model is distinct in the EV charging industry.
As of January 31, 2023, ChargePoint has activated approximately 225,000 ports on its network, including approximately 18,900 direct current, or “DC,” “fast charging” ports, excluding single family home ports. ChargePoint’s roaming integrations enable EV drivers to access more than 465,000 additional third-party ports in North America and Europe through ChargePoint’s mobile and in-dash applications.
Various 9 Table of Contents standards, including standards for notices of hazards, safety in excavation and demolition work and the handling of asbestos, may apply to ChargePoint’s operations. ChargePoint is in full compliance with OSHA regulations.
Various standards, including standards for notices of hazards, safety in excavation and demolition work and the handling of asbestos, may apply to ChargePoint’s operations. ChargePoint believes it is in full compliance with OSHA regulations. Metrology ChargePoint products are subject to regulations and certification requirements governing accuracy and other characteristics of embedded metrology for dispensing of electricity through charging stations.
The ChargePoint Model for EV Fueling Because vehicles spend most of their time parked and electricity is pervasively and safely distributed, fueling can shift to a model where vehicles charge where they are parked and while their drivers—individual or fleet—are doing something else.
Passenger vehicles spend 95% of their time parked, and most fleet vehicles also have substantial “dwell time.” Unlike gasoline, electricity is pervasively and safely distributed, so fueling can shift to a model where vehicles charge where they are parked and while their drivers—individual or fleet—are engaged in other activities.
Other states in the United States may pass or are considering privacy laws, and additional countries have in recent years implemented new privacy laws. ChargePoint’s compliance costs and potential liability may increase as the result of additional national and international regulatory requirements related to data privacy and data security.
The GDPR, CCPA, CPRA, and other state laws exemplify the vulnerability of ChargePoint’s business to the evolving regulatory environment related to personal data. Other states in the United States may pass or are considering privacy laws, and additional countries have in recent years implemented new privacy laws.
ChargePoint’s networked charging solutions can charge most types of EVs—cars, trucks, delivery vehicles, buses, yard tractors and 18-wheelers—regardless of manufacturer. ChargePoint believes it will benefit directly and proportionately from the broad electrification trend because it does not need to identify which vehicles will come first or which segments or manufacturers will be successful.
ChargePoint believes it will benefit directly and proportionately from the broad trend in vehicle electrification because the breadth of its solutions means it does not need to identify which vehicles will come to market first nor which segments or manufacturers will be successful.
The CPRA also creates a new state agency that will be vested with authority to implement and enforce the CCPA and the CPRA. New legislation proposed or enacted in various other states will continue to shape the data privacy environment nationally.
New legislation proposed or enacted in various other states will continue to shape the data privacy environment nationally.
ChargePoint’s network, sold as a Cloud Services subscription, enables commercial and fleet customers to manage charging in their parking lots and depots. Features are tuned for a variety of settings.
ChargePoint’s Express products are capable of dispensing up to 62.5kW per port and up to 500kW per port depending on configuration with Express Plus. • Advanced Cloud Services to Scale Charging Infrastructure. Cloud Services subscription enables commercial and fleet customers to manage charging in their parking lots and depots. Features are tuned for a variety of settings.
Seasonal changes and other weather-related conditions can affect the sales volumes and installation rates of ChargePoint’s products, primarily due to the impact of winter weather on construction timelines and delays. Therefore, the financial results for any quarter do not necessarily indicate the results expected for the fiscal year.
Seasonal changes and other weather-related conditions can affect the sales volumes and installation rates of ChargePoint’s products, primarily due to the impact of winter weather on construction timelines and delays. In addition, many of ChargePoint’s customers complete their annual budget approval cycle in ChargePoint’s fourth quarter.
Waste Handling and Disposal ChargePoint is subject to laws and regulations regarding the handling and disposal of hazardous substances and solid wastes, including electronic wastes and batteries.
ChargePoint’s compliance costs and potential liability may increase as the result of additional national and international regulatory requirements related to data privacy and data security. Waste Handling and Disposal ChargePoint is subject to laws and regulations regarding the handling and disposal of hazardous substances and solid wastes, including electronic wastes and batteries.
ChargePoint thoroughly tests its products, including interoperability checks for different types of EVs, for a range of functional, climate and environmental conditions and for high, long-term reliability. ChargePoint’s stations are available with customizable video and signage options for customers who want to promote their brand. • Advanced Cloud Services to Scale Charging Infrastructure.
ChargePoint thoroughly tests its products, including interoperability checks for different types of EVs, for a range of functional, climate and environmental conditions and for high, long-term reliability.
This commitment includes providing equal access to, and participation in, equal employment opportunities, programs, and services without regard to race, religion, color, national origin, disability, sex, sexual orientation, or gender identity. Ethical Business Practices.
This commitment includes adopting policies and other initiatives designed to provide equal access to, and participation in, equal employment opportunities, programs, and services without regard to race, religion, color, national origin, disability, sex, sexual orientation, or gender identity. ChargePoint’s Compensation and Organizational Development Committee of its Board of Directors reviews and provides feedback on ChargePoint’s diversity and inclusion initiatives.
Additional factors propelling this shift to electrification include existing and proposed fossil fuel bans or restrictions, transit electrification mandates and utility incentive programs. With these trends, the BNEF Report projects that the cumulative EV charging infrastructure investment in North America and Europe is expected to be approximately $121 billion by 2030 and increase to approximately $307 billion by 2040.
With these trends, the BNEF Report projects that the cumulative EV charging infrastructure investment in North America and Europe is expected to be approximately $178 billion by 2030 and increase to approximately $505 billion by 2040. ChargePoint is focused on supporting a sustainable future.
The GDPR also imposes strict rules on the transfer of personal data outside of the European Union (“EU”), provides an enforcement authority and authorizes the imposition of large penalties for noncompliance, including the potential for significant fines. The GDPR requirements apply not only to third-party transactions, but also to transfers of information between ChargePoint and its subsidiaries, including employee information.
The GDPR requirements apply not only to third-party transactions, but also to transfers of information between ChargePoint and its subsidiaries, including employee information.
Normally, the highest sales and earnings are in ChargePoint’s fourth quarter and the lowest are in its first quarter, commencing in February annually. Government Regulation and Incentives State, regional and local regulations for installation of EV charging stations vary from jurisdiction to jurisdiction and may include permitting requirements, inspection requirements, licensing of contractors and certifications as examples.
State, regional and local regulations for installation of EV charging stations also apply to ChargePoint and vary from jurisdiction to jurisdiction and may include permitting requirements, inspection requirements, licensing of contractors and certifications as examples. Compliance with such regulation(s) may cause shipping, installation, or commissioning delays.
ChargePoint is focused on supporting a sustainable future. Since 2007, ChargePoint has powered approximately 3.6 billion electric miles driven, avoiding approximately 145 million gallons of gasoline and over 600,000 metric tons of greenhouse gas emissions as of January 31, 2022.
Since 2007, ChargePoint estimates it has powered over 5 billion electric miles driven, avoiding use of more than 220 million gallons of gasoline and the emission of over 1 million metric tons of greenhouse gases as of January 31, 2023.
ChargePoint is a technology provider that sells networked charging hardware, cloud-based software services (“Cloud” or “Cloud Services”) and extended parts and labor warranty solutions (“Assure”) to customers to enable electrification. ChargePoint does not sell networked charging hardware without its software. In addition, ChargePoint rarely owns EV charging assets nor does it try to profit from electricity or driver charging fees.
ChargePoint believes its business model is distinct in the EV charging industry. ChargePoint sells networked charging hardware, connected through cloud-based software services (“Cloud” or “Cloud Services”) and supported by extended parts and labor warranty solutions (“Assure”).
ChargePoint also believes that fleet vehicles will typically charge overnight, but with infrastructure mapped to vehicle types, dwell time and route lengths. To meet these needs in an integrated way, ChargePoint offers a platform of products, Cloud subscriptions, Assure warranty coverage and professional services enabling turn-key development of charging at most locations and applications.
For fleet, ChargePoint believes fleet vehicles will also typically charge overnight, but with charging infrastructure mapped to vehicle types, dwell time and route lengths. Most fleets will use either all AC or a blend of AC and DC, with heavier duty applications using only DC.
The CPA and CDPA are similar to the CCPA and CPRA, but aspects of these state privacy statutes remain unclear, resulting in further legal uncertainty. The GDPR, CCPA, CPRA, CPA and CDPA exemplify the vulnerability of ChargePoint’s business to the evolving regulatory environment related to personal data.
These state laws are similar to the CCPA and CPRA, but aspects of these state privacy statutes remain unclear, resulting in further legal uncertainty. The United States federal government is also considering legislation governing privacy and security issues, including the possibility of private rights of action.
ChargePoint also believes that by creating an inclusive culture where employees can bring their whole self to work and encouraging diversity of thought, ChargePoint will improve the employee experience and ultimately drive better business outcomes. ChargePoint is committed to recruiting, retaining, and developing highly engaged and high-performing employees with diverse backgrounds and experiences.
ChargePoint believes that by cultivating a diverse and inclusive workforce where employees can bring diversity of thought, background and experiences, ChargePoint will ultimately drive better business outcomes and drive value for the organization and customers.
Beyond COVID-19 measures, ChargePoint also provides various health and wellness resources to help its employees improve their well-being. In addition to health, medical and dental benefits, ChargePoint offers all employees access to several well-being apps which provide a variety of mental health solutions, access to thousands of classes, and guided meditation. Compensation and Benefits.
In addition to health, medical and dental benefits, ChargePoint offers all employees access to several wellness offerings which provide a variety of mental and physical health solutions, therapy and coaching sessions, fertility, family forming and pregnancy support, virtual baby care, and mobile access to doctors. Compensation and Benefits.
The European Union’s General Data Protection Regulation (“GDPR”), which is wide-ranging in scope, imposes several requirements relating to a variety of matters, including the control over personal data by individuals to whom the personal data relates, the information provided to the individuals, the documentation ChargePoint must maintain, the security and confidentiality of the personal data, data breach notification, and the use of third-party processors in connection with the processing of personal data.
The GDPR governs a wide range of data protection and security issues, including EEA residents’ control over personal data about them or relating to them, the disclosures and choices provided to those individuals, the documentation ChargePoint must maintain, requirements for certain contracts, the security and confidentiality of the personal data, the uses or “processing” of personal data, data breach notification, and the use of third-party entities to process personal data.
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Accordingly, ChargePoint believes its operating model allows it to scale active network ports more cost efficiently as compared to other models in the EV industry, where the charging station provider owns and operates the unit, and it gives the site owner or operator full control over branding, access, pricing and policies in an effort to ensure a positive driver experience.
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ChargePoint sells these solutions to commercial, fleet and residential customers to enable electrification, and has developed a strong network of channel partners and distributors to support its growth.
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Locations where vehicles are parked will offer fueling with charging speeds matched to the natural parking duration, or dwell time, of vehicles at the site. Matching charging speeds to dwell time is a critical component in charging station site design and solution selection.
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ChargePoint does not sell networked charging hardware without its software, typically does not own or operate EV charging assets, does not monetize drivers, and does not rely upon profits from the sale of electricity.
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ChargePoint is tackling the growing addressable electric vehicle charging market one parking lot at a time.
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By pursuing this “capital light” business model, ChargePoint has been able to focus its investments on research and development of its diverse portfolio of networked Level 2, or alternating current (“AC”), and Level 3 DC fast charging hardware, and its software solutions for drivers, hosts and fleet operators, while simultaneously scaling active networked ports more cost efficiently as compared to other models in the EV industry, where the charging station operator, or “CPO,” owns and operates the charging station and depends upon profits on the sale of electricity.
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ChargePoint’s business model (a) encourages businesses and fleets to invest in charging infrastructure, in essence “crowdsourcing” the buildout of EV charging infrastructure, (b) is designed to deliver consistent revenue aligned closely to EV sales growth, and (c) provides a quality experience for businesses and drivers that yields significant network effects.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeA loss of any of these partners could negatively affect its business. • ChargePoint’s business is subject to risks associated with construction, cost overruns and delays, and other contingencies that may arise in the course of completing installations, and such risks may increase in the future as ChargePoint expands the scope of such services with other parties. • Acquisitions or strategic investments could be difficult to identify and integrate, divert the attention of key management personnel, disrupt ChargePoint’s business, dilute stockholder value and adversely affect its results of operations and financial condition. • If ChargePoint is unable to attract and retain key employees and hire qualified management, technical engineering and sale personnel, its ability to compete and successfully grow its business would be harmed. • ChargePoint is expanding operations internationally, particularly in Europe, which will expose it to additional tax, compliance, market and other risks. • Some members of ChargePoint’s management have limited experience in operating a public company. 13 Table of Contents • Future sales of ChargePoint’s Common Stock in the public market, or the perception that such sales may occur, could reduce ChargePoint’s stock price, and any additional capital raised through the sale of equity or convertible securities may dilute existing stockholder’s ownership. • ChargePoint’s future revenue growth will depend in significant part on its ability to increase sales of its products and services to fleet operators. • ChargePoint’s information technology systems or data, or those of its service providers or customers or users could be subject to cyber-attacks or other security incidents, which could result in data breaches, intellectual property theft, claims, litigation, regulatory investigations, significant liability, reputational damage and other adverse consequences. • Computer malware, viruses, ransomware, hacking, phishing attacks and similar disruptions could result in security and privacy breaches and interruption in service, which could harm ChargePoint’s business. • ChargePoint’s headquarters and other facilities are located in an active earthquake zone; an earthquake or other types of natural disasters or resource shortages, including public safety power shut-offs that have occurred and may continue to occur in California, could disrupt and harm its operations and those of ChargePoint’s customers. • ChargePoint has never paid cash dividends on its capital stock and does not anticipate paying dividends in the foreseeable future. • The price of ChargePoint’s Common Stock may be subject to wide fluctuations. • Concentration of ownership among ChargePoint’s existing executive officers, directors and their affiliate may prevent new investors from influencing significant corporate decisions. • ChargePoint’s future growth and success is highly correlated with and thus dependent upon the continuing rapid adoption of EVs for passenger and fleet applications. • The EV market currently benefits from the availability of rebates, tax credits and other financial incentives from governments, utilities and others to offset the purchase or operating cost of EVs and EV charging stations. • ChargePoint’s business may be adversely affected if it is unable to protect its technology and intellectual property from unauthorized use by third parties. • ChargePoint has identified material weaknesses in its internal control over financial reporting.
Biggest changeA loss of any of these partners could negatively affect its business. • ChargePoint’s business is subject to risks associated with construction, cost overruns and delays, and other contingencies that may arise in the course of completing installations, and such risks may increase in the future as ChargePoint expands the scope of such services with other parties. • Acquisitions or strategic investments could be difficult to identify and integrate, divert the attention of key management personnel, disrupt ChargePoint’s business, dilute stockholder value and adversely affect its results of operations and financial condition. • If ChargePoint is unable to attract and retain key employees and hire qualified management, technical engineering and sales personnel, its ability to compete and successfully grow its business would be harmed. • ChargePoint is expanding operations internationally, particularly in Europe, which will expose it to additional tax, compliance, market and other risks. • Some members of ChargePoint’s management have limited experience in operating a public company. • ChargePoint’s future revenue growth will depend in significant part on its ability to increase sales of its products and services to fleet operators. • ChargePoint faces risks related to global epidemics and health pandemics which could have a material and adverse effect on its business and results of operations. • Future sales of ChargePoint’s common stock (“Common Stock”) in the public market, or the perception that such sales may occur, could reduce ChargePoint’s stock price, and any conversions of its unsecured Convertible Senior PIK Toggle Notes (the “2027 Convertible Notes”) will, and any additional capital raised through the sale of equity or any future convertible securities ChargePoint may issue could, dilute existing stockholders’ ownership. • ChargePoint may need to raise additional funds and these funds may not be available when needed or may not be available on terms that are favorable to ChargePoint. • ChargePoint has incurred substantial indebtedness that may decrease its business flexibility, access to capital, and/or increase its borrowing costs, and ChargePoint may still incur substantially more debt, which may adversely affect its operations and financial results. • ChargePoint is highly reliant on its networked charging solution and information technology systems and data, and those of its service providers and component suppliers, any of which systems and data may be subject to cyber-attacks, service disruptions or other security incidents, which could result in data breaches, loss or interruption of services, intellectual property theft, claims, litigation, regulatory investigations, significant liability, reputational damage and other adverse consequences. 14 Table of Content • Computer malware, viruses, ransomware, hacking, phishing attacks and similar disruptions could result in security and privacy breaches and interruption in service, which could harm ChargePoint’s business. • ChargePoint’s business is subject to risks associated with natural disasters and the adverse effects associated with climate change, including earthquakes, wildfires, or other types of natural disasters or resource shortages, including public safety power shut-offs that have occurred and may continue to occur in California, the effects of which could disrupt and harm its operations and those of ChargePoint’s customers. • Concentration of ownership among ChargePoint’s existing executive officers, directors and their affiliates may prevent new investors from influencing significant corporate decisions. • ChargePoint has never paid cash dividends on its capital stock and does not anticipate paying dividends in the foreseeable future. • The price of ChargePoint’s Common Stock may be subject to wide fluctuations. • ChargePoint’s future growth and success is highly correlated with and thus dependent upon the continuing rapid adoption of EVs for passenger and fleet applications. • The EV market currently benefits from the availability of rebates, tax credits and other financial incentives from governments, utilities and others to offset the purchase or operating costs of EVs and EV charging stations.
The process of identifying and consummating acquisitions, investments and the subsequent integration of new assets and businesses into ChargePoint’s own business, requires attention from management and could result in a diversion of resources from its existing business, which in turn could have an adverse effect on its operations. Acquired assets or businesses may not generate the expected financial results.
The process of identifying and consummating acquisitions and investments and the subsequent integration of new assets and businesses into ChargePoint’s own business, requires attention from management and could result in a diversion of resources from its existing business, which in turn could have an adverse effect on its operations. Acquired assets or businesses may not generate the expected financial results.
The development and implementation of the standards and controls and the hiring of experienced personnel necessary to achieve the level of accounting standards required of a public company may require costs greater than expected. ChargePoint’s future revenue growth will depend in significant part on its ability to increase sales of its products and services to fleet operators.
The development and implementation of the standards and controls and the hiring of experienced personnel necessary to achieve the level of accounting standards required of a public company may require greater costs than expected. ChargePoint’s future revenue growth will depend in significant part on its ability to increase sales of its products and services to fleet operators.
Moreover, ChargePoint’s proprietary information, including intellectual property and personal information, could be compromised or misappropriated and its reputation may be adversely affected if these systems or their functionality do not operate as expected and ChargePoint may be required to expend significant resources to make corrections or find alternative sources for performing these functions.
Moreover, ChargePoint’s proprietary information, including intellectual property and personal information, could be compromised or misappropriated, its reputation may be adversely affected if these systems or their functionality do not operate as expected and ChargePoint may be required to expend significant resources to make corrections or find alternative sources for performing these functions.
Any incident affecting a data center facility’s or a cellular service provider’s infrastructure or operations, whether caused by fire, flood, severe storm, earthquake, power loss, telecommunications failures, breach of security protocols, computer viruses and disabling devices, failure of access control mechanisms, natural disasters, war, criminal act, military actions, terrorist attacks and other similar events could negatively affect the use, functionality or availability of ChargePoint’s services.
Any incident affecting a data center facility’s or a cellular service provider’s infrastructure or operations, whether caused by fire, flood, severe storm, earthquake, or other natural disasters, power loss, telecommunications failures, breach of security protocols, computer viruses and disabling devices, failure of access control mechanisms, war, criminal act, military actions, terrorist attacks and other similar events could negatively affect the use, functionality or availability of ChargePoint’s services.
In order to deliver appropriate customer support and engagement, ChargePoint must successfully assist its customers in deploying and continuing to use ChargePoint’s Cloud Services tools and EV charging stations, resolving performance issues, addressing interoperability challenges with a customers’ existing information technology or fuel management platforms, responding to EV charging station component failures or replacement parts, as well as charging station performance and reliability issues that may arise from time to time.
In order to deliver appropriate customer support and engagement, ChargePoint must successfully assist its customers in deploying and continuing to use ChargePoint’s Cloud Services tools and EV charging stations, resolving performance issues, addressing interoperability challenges with a customers’ existing information technology or fuel management platforms and responding to EV charging station component failures or replacement parts, as well as charging station performance and reliability issues that may arise from time to time.
Furthermore, if any issues in complying with those requirements are identified, such as the material weakness as described in this Annual Report and the restatement of ChargePoint’s previously issued consolidated financial statements and related material weakness as described in this Risk Factors section, ChargePoint may be subject to additional costs and expenses to come into compliance (see also “Financial, Tax and Accounting-Related Risks —ChargePoint has identified material weaknesses in its internal control over financial reporting.
Furthermore, if any issues in complying with those requirements are identified, such as the material weaknesses as described in this Annual Report and the restatement of ChargePoint’s previously issued consolidated financial statements and related material weakness as described in this Risk Factors section, ChargePoint may be subject to additional costs and expenses to come into compliance (see also “Financial, Tax and Accounting-Related Risks —ChargePoint has identified, and has previously identified, material weaknesses in its internal control over financial reporting.
The material weakness related to the valuation of acquired intangible assets resulted in material adjustments to customer relationships and goodwill and related disclosures to ChargePoint’s consolidated financial statements for the year ended January 31, 2022.
The material weakness related to the valuation of acquired intangible assets resulted in material adjustments to customer relationships and goodwill and related disclosures in ChargePoint’s consolidated financial statements for the year ended January 31, 2022.
Sales, or the perception of future sales, of a substantial number of shares of Common Stock by ChargePoint’s existing stockholders could cause the price of the Common Stock to decline. Sales of a substantial number of shares of ChargePoint’s Common Stock in the public market could occur at any time.
Sales, or the perception of future sales, of a substantial number of shares of Common Stock by ChargePoint’s existing stockholders could cause the price of ChargePoint’s Common Stock to decline. Sales of a substantial number of shares of ChargePoint’s Common Stock in the public market could occur at any time.
The IT deficiencies did not result in a any misstatements to the consolidated financial statements, however, the deficiencies, when aggregated, could impact maintaining effective segregation of duties, as well as the effectiveness of IT-dependent controls (such as automated controls that address the risk of material misstatement to one or more assertions, along with the IT controls and underlying data that support the effectiveness of system-generated data and reports) that could result in misstatements potentially impacting all financial statement accounts and disclosures that would not be prevented or detected.
The IT deficiencies did not result in any misstatements to the consolidated financial statements, however, the deficiencies, when aggregated, could impact maintaining effective segregation of duties, as well as the effectiveness of IT-dependent controls (such as automated controls that address the risk of material misstatement to one or more assertions, along with the IT controls and underlying data that support the effectiveness of system-generated data and reports) that could result in misstatements potentially impacting all financial statement accounts and disclosures that would not be prevented or detected.
Accordingly, ChargePoint may be subject to or affected by a number of federal, state, local and international laws and regulations, as well as contractual obligations and industry standards, that impose certain obligations and restrictions with respect to data privacy and security and govern its collection, storage, retention, protection, use, processing, transmission, sharing and disclosure of personal information including that of ChargePoint’s employees, customers and other third-parties with whom ChargePoint conducts business.
Accordingly, ChargePoint may be subject to or affected by a number of federal, state, local and international laws and regulations, as well as contractual obligations and industry standards, that impose certain obligations and restrictions with respect to data privacy and security and govern its collection, storage, retention, protection, use, processing, transmission, sharing and disclosure of personal information including that of ChargePoint’s employees, customers, drivers and other third-parties with whom ChargePoint conducts business.
Any failure to properly handle or dispose of such wastes, regardless of whether such failure is ChargePoint’s or its contractors, may result in liability under environmental laws, including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), under which liability may be imposed without regard to fault or degree of contribution for the investigation and clean-up of contaminated sites, as well as impacts to human health and damages to natural resources.
Any failure to properly handle or dispose of such wastes, regardless of whether such failure is ChargePoint’s or its contractors, may result in liability under environmental laws, including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act, under which liability may be imposed without regard to fault or degree of contribution for the investigation and clean-up of contaminated sites, as well as impacts to human health and damages to natural resources.
Accordingly, the failure, or perceived inability, to comply with these laws, regulations, standards and other obligations may limit the use and adoption of ChargePoint’s solutions, reduce overall demand, lead to regulatory investigations, litigation and significant fines, penalties or liabilities for actual or alleged noncompliance, or slow the pace at which it closes sales transactions, any of which could harm its business.
Accordingly, the failure, or perceived inability, to comply with these laws, regulations, standards and other obligations may limit the use and adoption of ChargePoint’s solutions, reduce overall demand, lead to regulatory investigations, litigation and significant fines, penalties, injunctions or liabilities for actual or alleged noncompliance, or slow the pace at which it closes sales or other transactions, any of which could harm its business.
If ChargePoint’s services are unavailable when users attempt to access them, they may seek other services, which could reduce demand for its solutions from target customers. ChargePoint has processes and procedures in place designed to enable it to quickly recover from a disaster or catastrophe and continue business operations and has tested this capability under controlled circumstances.
If ChargePoint’s services are unavailable when users attempt to access them, they may seek other services, which could reduce demand for ChargePoint’s solutions from target customers. ChargePoint has processes and procedures in place designed to enable it to quickly recover from a disaster or catastrophe and continue business operations and has tested this capability under controlled circumstances.
In addition, while ChargePoint has not yet experienced a direct impact to its supply chain due to the conflict between Russia and the Ukraine, ChargePoint may experience an impact in the future due to increased fuel and shipping costs, limited supply of components or parts used by ChargePoint in its manufacturing process, or the automotive industry in general, and delays caused by changes to global shipping routes and logistics.
In addition, while ChargePoint has not yet experienced a direct impact to its supply chain due to the conflict between Russia and Ukraine, ChargePoint may experience an impact in the future due to increased fuel and shipping costs, limited supply of components or replacement parts used by ChargePoint in its manufacturing process, or the automotive industry in general, and delays caused by changes to global shipping routes and logistics.
In addition, sales of vehicles in the automotive industry can be cyclical, which may affect growth in acceptance of EVs. It is uncertain how macroeconomic factors will impact demand for EVs, particularly since they can be more expensive than traditional gasoline-powered vehicles, when the automotive industry globally has been experiencing a recent decline in sales.
In addition, sales of vehicles in the automotive industry can be cyclical, which may affect growth in acceptance of EVs. It is uncertain how macroeconomic factors will impact demand for EVs, particularly since EVs can be more expensive than traditional gasoline-powered vehicles, when the automotive industry globally has been experiencing a recent decline in sales.
National and local governments and agencies in the countries in which ChargePoint operates and in which its customers operate have adopted, are considering adopting, or may adopt laws and regulations regarding the collection, use, storage, processing and disclosure of information regarding consumers and other individuals, which could impact its ability to offer services in certain jurisdictions.
National and local governments and agencies in the countries in which ChargePoint operates and in which its customers operate have adopted, are considering adopting, or may adopt laws and regulations regarding the collection, use, storage, processing and disclosure of information regarding consumers and other individuals, which could impact ChargePoint’s ability to offer services in certain jurisdictions.
While ChargePoint believes it has visibility into the seasonality of its business, various factors, including difficult weather conditions (such as flooding, hurricanes, prolonged rain or periods of unseasonably cold or snowstorms) in any quarter, may materially and adversely affect its business, financial condition and results of operations.
While ChargePoint believes it has visibility into the seasonality of its business, various factors, including difficult weather conditions (such as flooding, hurricanes, prolonged rain or periods of unseasonably cold temperatures or snowstorms) in any quarter, may materially and adversely affect its business, financial condition and results of operations.
In addition, if these contractors are unable to provide timely, thorough and quality installation-related services, customers could fall behind their construction schedules leading to liability to ChargePoint or cause customers to become dissatisfied with the solutions ChargePoint offers and ChargePoint’s overall reputation would be harmed.
In addition, if these contractors are unable to provide timely, thorough and quality installation-related services, customers could fall behind their construction schedules leading to liability of ChargePoint, or cause customers to become dissatisfied with the solutions ChargePoint offers and ChargePoint’s overall reputation would be harmed.
The costs of compliance with, and other burdens imposed by, laws and regulations relating to privacy, data protection and information security that are applicable to the businesses of customers may adversely affect ability and willingness to process, handle, store, use and transmit certain types of information, such as demographic and other personal information.
The costs of compliance with, and other burdens imposed by, laws and regulations relating to privacy, data protection and information security that are applicable to the businesses of customers may adversely affect the ability and willingness to process, handle, store, use, transmit or process certain types of information, such as demographic and other personal information.
Anti-takeover provisions contained in ChargePoint’s governing documents and applicable laws could impair a takeover attempt. ChargePoint’s Second A&R Charter and Amended and Restated Bylaws (the “A&R Bylaws”) afford certain rights and powers to the Board that could contribute to the delay or prevention of an acquisition that it deems undesirable.
Anti-takeover provisions contained in ChargePoint’s governing documents and applicable laws could impair a takeover attempt. ChargePoint’s Charter and Amended and Restated Bylaws (the “A&R Bylaws”) afford certain rights and powers to the Board that could contribute to the delay or prevention of an acquisition that it deems undesirable.
These factors include: • actual or anticipated fluctuations in operating results; • failure to meet or exceed financial estimates and projections of the investment community or that ChargePoint provides to the public; • issuance of new or updated research or reports by securities analysts or changed recommendations for the industry in general; • announcements of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments; • changes in competitive factors; • operating and share price performance of other companies in the industry or related markets; • sales of shares of ChargePoint’s Common Stock into the market pursuant to the exercise of registration rights; • the timing and magnitude of investments in the growth of the business; 35 Table of Contents • actual or anticipated changes in laws and regulations, including U.S. monetary policy; • additions or departures of key management or other personnel; • increased labor costs; • disputes or other developments related to intellectual property or other proprietary rights, including litigation; • the ability to market new and enhanced solutions on a timely basis; • sales of substantial amounts of the Common Stock by the members of the Board, executive officers or significant stockholders or the perception that such sales could occur; • changes in capital structure, including future issuances of securities or the incurrence of debt; and • general economic, political and market conditions, including those resulting from the ongoing conflict between Russia and Ukraine and increased trade restrictions by governmental and private entities.
These factors include: • actual or anticipated fluctuations in operating results; • failure to meet or exceed financial estimates and projections of the investment community or that ChargePoint provides to the public; • issuance of new or updated research or reports by securities analysts or changed recommendations for the industry in general; • announcements of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments; • changes in competitive factors; • operating and share price performance of other companies in ChargePoint’s industry or related markets; • sales of shares of ChargePoint’s Common Stock into the market pursuant to the exercise of registration rights; • the timing and magnitude of investments in the growth of the business; • actual or anticipated changes in laws and regulations, including U.S. monetary policy; • additions or departures of key management or other personnel; • increased labor costs; • disputes or other developments related to intellectual property or other proprietary rights, including litigation; • the ability to market new and enhanced solutions on a timely basis; 38 Table of Content • sales of substantial amounts of the Common Stock by the members of the Board, executive officers or significant stockholders or the perception that such sales could occur; • changes in capital structure, including future issuances of securities or the incurrence of debt; and • general economic, political and market conditions, including those resulting from the ongoing conflict between Russia and Ukraine and increased trade restrictions by governmental and private entities.
In addition, the stock market in general, and the stock prices of technology companies in particular, have experienced extreme price and volume fluctuations. Broad market and industry factors likely have and may continue to seriously affect the market price of ChargePoint’s Common Stock, regardless of actual operating performance.
In addition, the stock market in general, and the stock prices of technology companies in particular, have experienced extreme price and volume fluctuations. Broad market and industry factors likely have seriously affected and may continue to seriously affect the market price of ChargePoint’s Common Stock, regardless of actual operating performance.
ChargePoint cannot predict the size of future issuances of its Common Stock or securities convertible into Common Stock or the effect, if any, that future issuances and sales of shares of its Common Stock will have on the market price of its Common Stock.
ChargePoint cannot predict the size of future issuances of its Common Stock or any additional issuances of securities convertible into Common Stock or the effect, if any, that future issuances and sales of shares of its Common Stock will have on the market price of its Common Stock.
Any failure to maintain high-quality customer support, or a market perception that ChargePoint does not maintain high-quality customer support, could adversely affect ChargePoint’s reputation, business, results of operations, and financial condition, particularly with respect to its fleet customers (see also “Risks Related to ChargePoint’s Business - Supply chain disruptions, manufacturing interruptions or delays, or the failure to accurately forecast customer demand, could adversely affect ChargePoint’s ability to meet customer demand, lead to higher costs, and adversely affect ChargePoint’s business and results of operations.
Any failure to maintain high-quality customer support, or a market perception that ChargePoint does not maintain high-quality customer support, could adversely affect ChargePoint’s reputation, business, results of operations, and financial condition, particularly with respect to its fleet customers (see also “Risks Related to ChargePoint’s Business-- Supply chain disruptions, component shortages, manufacturing interruptions or delays, or the failure to accurately forecast customer demand, could adversely affect ChargePoint’s ability to meet customer demand, lead to higher costs, and adversely affect ChargePoint’s business and results of operations.
ChargePoint believes there are seasonal factors that may cause ChargePoint to record higher revenue in some quarters compared with others. A significant share of ChargePoint’s annual revenues are typically generated in the fourth fiscal quarter, which coincides with customers with a December 31 year-end choosing to spend remaining unused portions of their budgets.
Seasonality may cause fluctuations in ChargePoint’s revenue. ChargePoint believes there are seasonal factors that may cause ChargePoint to record higher revenue in some quarters compared with others. A significant share of ChargePoint’s annual revenues are typically generated in the fourth fiscal quarter, which coincides with customers with a December 31 year-end choosing to spend remaining unused portions of their budgets.
If ChargePoint is unable to remediate these material weaknesses, or if ChargePoint identifies additional material weaknesses in the future or otherwise fails to maintain an effective system of internal control over financial reporting, this may result in material misstatements of ChargePoint’s consolidated financial statements or cause ChargePoint to fail to meet its periodic reporting obligations,” for more detail).
If ChargePoint is unable to remediate these material weaknesses, or if ChargePoint identifies additional material weaknesses in the future or otherwise fails to maintain an effective system of internal control over financial reporting, this may result in material misstatements contained within ChargePoint’s consolidated financial statements or cause ChargePoint to fail to meet its periodic reporting obligations,” for more detail).
ChargePoint’s Second A&R Charter provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, which could limit stockholders’ ability to obtain a more favorable judicial forum for disputes with ChargePoint or its directors, officers, employees or stockholders.
ChargePoint’s Charter provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, which could limit stockholders’ ability to obtain a more favorable judicial forum for disputes with ChargePoint or its directors, officers, employees or stockholders.
Moreover, if ChargePoint or any of its employees or contractors fail or are believed to fail to adhere to appropriate practices regarding customers’ data, it may damage its reputation and brand. Additionally, existing laws, regulations, standards and other obligations may be interpreted in new and differing manners in the future, and may be inconsistent among jurisdictions.
Moreover, if ChargePoint or any of its employees, contractors or vendors fail or are believed to fail to adhere to appropriate practices regarding customers’ or employees’ data, it may damage its reputation and brand. Additionally, existing laws, regulations, standards and other obligations may be interpreted in new and differing manners in the future, and may be inconsistent among jurisdictions.
In addition, in fiscal year 2022, ChargePoint became subject to requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) to diligence, disclose and report whether or not its products contain minerals originating from the Democratic Republic of the Congo and adjoining countries, or conflict minerals.
In addition, in fiscal year 2023, ChargePoint became subject to requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) to diligence, disclose and report whether or not its products contain minerals originating from the Democratic Republic of the Congo and adjoining countries, or conflict minerals.
In certain circumstances, the Registration Rights Holders can demand certain underwritten offerings and will be entitled to customary piggyback registration rights. Also, in connection with the consummation of the acquisition of has•to•be gmbh, ChargePoint entered into a registration rights agreement with the former shareholders of HTB providing for the filing of a resale registration statement as more completely described below.
In certain circumstances, the Registration Rights Holders can demand certain underwritten offerings and will be entitled to customary piggyback registration rights. Also, in connection with the consummation of the acquisition of HTB, ChargePoint entered into a registration rights agreement with the former shareholders of HTB providing for the filing of a resale registration statement as more completely described below.
For example, on July 12, 2021, ChargePoint filed a resale registration statement on Form S-1 (No. 333-257855) that relates to the offer and sale from time to time by the selling security holders named in that prospectus of up to 12,000,000 shares of ChargePoint’s Common Stock (the “Secondary Offering”).
For example, on July 12, 2021, ChargePoint filed a resale registration statement on Form S-1 (No. 333-257855) that relates to the offer and sale from time to time by the selling security holders named in that prospectus of up to 12 million shares of ChargePoint’s Common Stock (the “Secondary Offering”).
If ChargePoint is unable to remediate these material weaknesses, or if ChargePoint identifies additional material weaknesses in the future or otherwise fails to maintain an effective system of internal control over financial reporting, this may result in material misstatements of ChargePoint’s consolidated financial statements or cause ChargePoint to fail to meet its periodic reporting obligations.
If ChargePoint is unable to remediate these material weaknesses, or if ChargePoint identifies additional material weaknesses in the future or otherwise fails to maintain an effective system of internal control over financial reporting, this may result in material misstatements contained within ChargePoint’s consolidated financial statements or cause ChargePoint to fail to meet its periodic reporting obligations.
Managing these expansions requires additional resources and controls, and could subject ChargePoint to risks associated with international operations, including: • cost of alternative power sources, which could vary meaningfully outside the United States; • conformity with applicable business customs, including translation into foreign languages and associated expenses; • lack of availability of government incentives and subsidies; • challenges in arranging, and availability of, financing for customers; • potential changes to its established business model; • difficulties in staffing and managing foreign operations in an environment of diverse culture, laws, and customers, and the increased travel, infrastructure, and legal and compliance costs associated with international operations; • installation challenges; • differing driving habits and transportation modalities in other markets; • different levels of demand among commercial, fleet and residential customers; • compliance with multiple, potentially conflicting and changing governmental laws, regulations, certifications, and permitting processes including environmental, banking, employment, tax, information security, privacy, and data protection laws and regulations such as the California Consumer Privacy Act (“CCPA”) and newer state privacy laws in the United States including in Virginia and Colorado, the European Union (the “EU”) General Data Protection Regulation (“GDPR”), national legislation implementing the same and changing requirements for legally transferring data out of the European Economic Area; • compliance with U.S. and foreign anti-bribery laws including the Foreign Corrupt Practices Act (“FCPA”) and the U.K.
Managing these expansions requires additional resources and controls, and could subject ChargePoint to risks associated with international operations, including: • cost of alternative power sources, which could vary meaningfully outside the United States; • conformity with applicable business customs, including translation into foreign languages and associated expenses; • lack of availability of government incentives and subsidies; • challenges in arranging, and availability of, financing for customers; • potential changes to its established business model; • difficulties in staffing and managing foreign operations in an environment of diverse culture, laws, and customers, and the increased travel, infrastructure, and legal and compliance costs associated with international operations; • installation challenges; • differing driving habits and transportation modalities in other markets; • different levels of demand among commercial, fleet and residential customers; • compliance with multiple, potentially conflicting and changing governmental laws, regulations, certifications, and permitting processes including environmental, banking, employment, tax, information security, privacy, and data protection laws and regulations such as the California Consumer Privacy Act (“CCPA”) and newer state privacy laws in the United States, the European Union (the “EU”) General Data Protection Regulation (“GDPR”), national legislation implementing the same, the United Kingdom Data Protection Act 2018 (“UK GDPR”), and certain other changing requirements for legally transferring data out of the European Economic Area; • compliance with U.S. and foreign anti-bribery laws including the Foreign Corrupt Practices Act (“FCPA”) and the U.K.
Patent, trademark, and trade secret laws vary significantly throughout the world. Some foreign countries do not protect intellectual property rights to the same extent as do the laws of the United States. Further, policing the unauthorized use of its intellectual property in foreign jurisdictions may be difficult or impossible.
Patent, trademark, and trade secret laws vary significantly throughout the world. Some foreign countries do not protect intellectual property rights to the same extent as do the laws of the United States. Further, policing the unauthorized use of ChargePoint’s intellectual property in foreign jurisdictions may be difficult or impossible.
If ChargePoint is unable to remediate these material weaknesses, or if ChargePoint identifies additional material weaknesses in the future or otherwise fails to maintain an effective system of internal control over financial reporting, this may result in material misstatements of ChargePoint’s consolidated financial statements or cause ChargePoint to fail to meet its periodic reporting obligations,” and “Risks Related to Legal Matters and Regulations—ChargePoint may face litigation and other risks as a result of the material weakness in its internal control over financial reporting and the restatement of its financial statements,” for more detail).
If ChargePoint is unable to remediate these material weaknesses, or if ChargePoint identifies additional material weaknesses in the future or otherwise fails to maintain an effective system of internal control over financial reporting, this may result in material misstatements contained within ChargePoint’s consolidated financial statements or cause ChargePoint to fail to meet its periodic reporting obligations,” and “Risks Related to Legal Matters and Regulations—ChargePoint may face litigation and other risks as a result of the material weaknesses in its internal control over financial reporting and the restatement of its financial statements,” for more detail).
Specifically, ChargePoint did not design and maintain (a) program change management controls to ensure that IT program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized and implemented appropriately, (b) user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to its financial applications and data to appropriate company personnel and (c) testing and approval controls for program development to ensure that new software development is aligned with business and IT requirements.
Specifically, ChargePoint did not design and maintain (a) program change management controls to ensure that IT program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized and implemented appropriately, (b) user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to its financial applications and data to 30 Table of Content appropriate company personnel and (c) testing and approval controls for program development to ensure that new software development is aligned with business and IT requirements.
Any of the foregoing provisions and terms that has the effect of delaying or deterring a change in control could limit the opportunity for stockholders to receive a premium for their shares of their Common Stock and could also affect the price that some investors are willing to pay for the Common Stock.
Any of the foregoing provisions and terms that have the effect of delaying or deterring a change in control could limit the opportunity for stockholders to receive a premium for their shares of their Common Stock and could also affect the price that some investors are willing to pay for the Common Stock.
Any shares of ChargePoint’s Common Stock issued upon exercise of Legacy Warrants will result in dilution to the then existing holders of Common Stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market could adversely affect the market price of ChargePoint’s Common Stock.
Any shares of ChargePoint’s Common Stock issued upon exercise of Legacy Warrants will result in dilution to the then existing holders of Common Stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market could adversely affect the market price of ChargePoint’s Common Stock. Item 1B.
Ongoing supply chain challenges and heightened logistics costs have adversely affected ChargePoint’s gross margins in recent quarters and ChargePoint expects that gross margins will continue to be adversely affected by increased material costs and freight and logistic expenses for the foreseeable future.
Ongoing supply chain challenges, component shortages and heightened logistics costs have adversely affected ChargePoint’s gross margins in recent quarters and ChargePoint expects that gross margins will continue to be adversely affected by increased material costs and freight and logistic expenses for the foreseeable future.
ChargePoint is highly reliant on its networked charging solution and information technology systems and data, and those of its service providers which may be subject to cyber-attacks, service disruptions or other security incidents, which could result in data breaches, loss or interruption of services, intellectual property theft, claims, litigation, regulatory investigations, significant liability, reputational damage and other adverse consequences.
ChargePoint is highly reliant on its networked charging solution and information technology systems and data, and those of its service providers and component suppliers, any of which systems and data may be subject to cyber-attacks, service disruptions or other security incidents, which could result in data breaches, loss or interruption of services, intellectual property theft, claims, litigation, regulatory investigations, significant liability, reputational damage and other adverse consequences.
In addition, competitors may in the future establish cooperative relationships with vendors of complementary products, technologies or services to increase the availability of their solutions in the marketplace. This competition may also materialize in the form of costly intellectual property disputes or litigation.
In addition, competitors may in the future establish cooperative relationships with vendors of complementary products, technologies or services to increase the availability of their solutions in the marketplace. This competition may also materialize in the form of costly intellectual property disputes or litigation involving ChargePoint.
Additionally, ChargePoint may be subject to litigation or other claims in connection with the acquired company, including claims from terminated employees, former stockholders or other third parties, which may differ from or be more significant than the risks ChargePoint’s business faces.
Additionally, ChargePoint may be subject to litigation or other claims in connection with the acquired company, including claims from terminated employees, former stockholders or other third parties, which may differ from or be more significant than the risks ChargePoint’s business faces of similar litigation or other claims.
Accordingly, ChargePoint may not be able to utilize a material portion of the net operating losses or credits. The ability of ChargePoint to utilize ChargePoint’s net operating losses or credits is conditioned upon ChargePoint attaining profitability and generating U.S. federal and state taxable income.
Accordingly, ChargePoint may not be able to utilize a material portion of the net operating losses or credits. The ability of ChargePoint to utilize its net operating losses or credits is conditioned upon ChargePoint attaining profitability and generating U.S. federal and state taxable income.
The Second A&R Charter requires, to the fullest extent permitted by law, that derivative actions brought on behalf of ChargePoint, actions against current or former directors, officers, stockholders or, subject to certain exceptions, employees for breach of fiduciary duty and certain other actions may be brought in the Court of Chancery in the State of Delaware or, if that court lacks subject matter jurisdiction, another federal or state court situated in the State of Delaware.
The Charter requires, to the fullest extent permitted by law, that derivative actions brought on behalf of ChargePoint, actions against current or former directors, officers, stockholders or, subject to certain exceptions, employees for breach of fiduciary duty and certain other actions may be brought in the Court of Chancery in the State of Delaware or, if that court lacks subject matter jurisdiction, another federal or state court situated in the State of Delaware.
Identifying suitable suppliers and manufacturers could be an extensive process that requires ChargePoint to become satisfied with their quality control, technical capabilities, responsiveness and service, financial stability, regulatory compliance, and labor and other ethical practices. Accordingly, a loss of any significant suppliers or manufacturers could have an adverse effect on ChargePoint’s business, financial condition and operating results.
Identifying suitable suppliers and manufacturers could be an extensive process that requires ChargePoint to become satisfied with such party’s quality control, technical capabilities, responsiveness and service, financial stability, regulatory compliance, and labor and other ethical practices. Accordingly, a loss of any significant suppliers or manufacturers could have an adverse effect on ChargePoint’s business, financial condition and operating results.
ChargePoint may not be able to attract, assimilate, develop or retain qualified personnel in the future, and failure to do so could adversely affect its business, including the execution of its global business strategy. ChargePoint is expanding operations internationally, particularly in Europe, which will expose it to additional tax, compliance, market and other risks.
ChargePoint may not be able to attract, assimilate, develop or retain qualified personnel in the future, and failure to do so could adversely affect its business, including the execution of its global business strategy. 19 Table of Content ChargePoint is expanding operations internationally, particularly in Europe, which will expose it to additional tax, compliance, market and other risks.
If ChargePoint’s channel partners do not provide support to the satisfaction of ChargePoint’s customers, ChargePoint may be required to hire additional personnel and to invest in additional resources in order to provide an adequate level of support, generally at a higher cost than that associated with its channel partners, which may increase ChargePoint’s costs and expenses and adversely affect ChargePoint’s gross margins.
If ChargePoint’s channel partners do not provide support to the satisfaction of ChargePoint’s customers, ChargePoint may be 29 Table of Content required to hire additional personnel and to invest in additional resources in order to provide an adequate level of support, generally at a higher cost than that associated with its channel partners, which may increase ChargePoint’s costs and expenses and adversely affect ChargePoint’s gross margins.
If ChargePoint is unable to maintain these certifications or meet these standards, it could reduce demand for its solutions and adversely affect its business. 33 Table of Contents Failure to comply with anticorruption and anti-money laundering laws, including the FCPA and similar laws associated with activities outside of the United States, could subject ChargePoint to penalties and other adverse consequences.
If ChargePoint is unable to maintain these certifications or meet these standards, it could reduce demand for its solutions and adversely affect its business. Failure to comply with anticorruption and anti-money laundering laws, including the FCPA and similar laws associated with activities outside of the United States, could subject ChargePoint to penalties and other adverse consequences.
It is ChargePoint’s policy to enter into confidentiality and invention assignment agreements with its employees and contractors that have developed material intellectual property for ChargePoint, but these agreements may not be self-executing and may not otherwise adequately protect ChargePoint’s intellectual property, particularly with respect to conflicts of ownership relating to work product generated by employees and contractors.
It is ChargePoint’s policy to enter into confidentiality and invention assignment agreements with its employees and contractors that have developed material intellectual property for ChargePoint, but these agreements may not be self-executing and may not 26 Table of Content otherwise adequately protect ChargePoint’s intellectual property, particularly with respect to conflicts of ownership relating to work product generated by employees and contractors.
In order to maintain and improve the effectiveness of its internal control over financial reporting, ChargePoint has expended, and anticipates it will continue to expend, significant resources, including accounting-related costs and significant management oversight.
In order to maintain and improve the effectiveness of its internal control over financial reporting, ChargePoint has expended, and will continue to expend, significant resources, including accounting-related costs and significant management oversight.
Supply chain disruptions, manufacturing interruptions or delays, or the failure to accurately forecast customer demand, could adversely affect ChargePoint’s ability to meet customer demand, lead to higher costs, and adversely affect ChargePoint’s business and results of operations.
Supply chain disruptions, component shortages, manufacturing interruptions or delays, or the failure to accurately forecast customer demand, could adversely affect ChargePoint’s ability to meet customer demand, lead to higher costs, and adversely affect ChargePoint’s business and results of operations.
If fuel efficiency of non-electric vehicles continues to rise, whether as the result of regulations or otherwise, and affordability of vehicles using renewable transportation fuels improves, the demand for electric and high energy vehicles could diminish.
If fuel efficiency of non-electric vehicles continues to rise, whether as the result of regulations or otherwise, and affordability of vehicles using renewable transportation fuels improves, the demand for electric vehicles could diminish.
Any of these changes may impose additional obstacles to the purchase of EVs or the development of a more ubiquitous EV market. If any of the above cause or contribute to consumers or businesses to no longer purchase EVs or purchase them at a lower rate, it would materially and adversely affect ChargePoint’s business, operating results, financial condition and prospects.
Any of these changes may impose additional obstacles to the purchase of EVs or the development of a more ubiquitous EV market. If any of the above influence consumers or businesses to no longer purchase EVs or purchase them at a lower rate, it would materially and adversely affect ChargePoint’s business, operating results, financial condition and prospects.
Similarly, to the extent that such malfunctions are related to components obtained from third-party vendors, such vendors may not assume responsibility for such malfunctions. In addition, ChargePoint’s customers could be subjected to claims as a result of such incidents and may bring legal claims against ChargePoint to attempt to hold it liable.
Similarly, to the extent that such malfunctions are related to components obtained from third-party vendors, such vendors may not assume responsibility for such 27 Table of Content malfunctions. In addition, ChargePoint’s customers could be subjected to claims as a result of such incidents and may bring legal claims against ChargePoint to attempt to hold it liable.
In addition, ChargePoint did not design and maintain effective controls over certain information technology (“IT”) general controls for information systems that are relevant to the preparation of its consolidated financial statements.
ChargePoint did not design and maintain effective controls over certain information technology (“IT”) general controls for information systems that are relevant to the preparation of its consolidated financial statements.
These laws may require ChargePoint or others in ChargePoint’s value chain to obtain permits and comply with procedures that impose various restrictions and obligations that may have material effects on ChargePoint’s operations.
These laws may require ChargePoint or others in ChargePoint’s supply and operations chain to obtain permits and comply with procedures that impose various restrictions and obligations that may have material effects on ChargePoint’s operations.
ChargePoint performed an analysis to assess whether an “ownership change,” as defined by Section 382 of the Code, has occurred from its inception through January 31, 2021.
ChargePoint performed an analysis to assess whether an “ownership change,” as defined by Section 382 of the Code, has occurred from its inception through January 31, 2022.
If ChargePoint is unable to remediate these material weaknesses, or if ChargePoint identifies additional material weaknesses in the future or otherwise fails to maintain an effective internal control over financial reporting, this may result in material misstatements of ChargePoint’s consolidated financial statements or cause ChargePoint to fail to meet its periodic reporting obligations.
If ChargePoint is unable to remediate these material weaknesses, or if ChargePoint identifies additional material weaknesses in the future or otherwise fails to maintain an effective system of internal control over financial reporting, this may result in material misstatements contained within ChargePoint’s consolidated financial statements or cause ChargePoint to fail to meet its periodic reporting obligations.
If ChargePoint does not successfully implement, maintain or expand its information technology systems as planned, its operations may be disrupted, its ability to accurately and/or timely report its financial results could be impaired and deficiencies may 20 Table of Contents arise in its internal control over financial reporting, which may impact its ability to certify its financial results (see also “Risks Related to Legal Matters and Regulations-ChargePoint may face litigation and other risks as a result of the material weakness in its internal control over financial reporting and the restatement of its financial statements,” and “Financial, Tax and Accounting-Related Risks -ChargePoint has identified material weaknesses in its internal control over financial reporting.
If ChargePoint does not successfully implement, maintain or expand its information technology systems as planned, its operations may be disrupted, its ability to accurately and/or timely report its financial results could be impaired and deficiencies may arise in its internal control over financial reporting, which may impact its ability to certify its financial results (see also “Risks Related to Legal Matters and Regulations--ChargePoint may face litigation and other risks as a result of the material weaknesses in its internal control over financial reporting and the restatement of its financial statements,” and “Financial, Tax and Accounting-Related Risks--ChargePoint has identified, and has previously identified, material weaknesses in its internal control over financial reporting.
Despite ChargePoint’s efforts to obtain, maintain, enforce and protect intellectual property rights, there can be no assurance that these steps will be available in all cases or will 24 Table of Contents be adequate to prevent ChargePoint’s competitors or other third-parties from copying, reverse engineering, or otherwise obtaining and using its technology or products or seeking court declarations that they do not infringe, misappropriate or otherwise violate its intellectual property.
Despite ChargePoint’s efforts to obtain, maintain, enforce and protect intellectual property rights, there can be no assurance that these steps will be available in all cases or will be adequate to prevent ChargePoint’s competitors or other third-parties from copying, reverse engineering, or otherwise obtaining and using its technology or products or seeking court declarations that they do not infringe, misappropriate or otherwise violate its intellectual property.
Further, the implementation, maintenance, segregation and improvement of these systems require significant management time, support and cost, and there are inherent risks associated with developing, improving and expanding ChargePoint’s core systems as well as implementing new systems and updating current systems, including disruptions to the related areas of business operation.
The implementation, maintenance, segregation and improvement of these systems require significant management time, support and cost, and there are inherent risks associated with developing, improving and expanding ChargePoint’s core systems as well as implementing new systems and updating current systems, including disruptions to the related areas of business operations.
The EU and the United States agreed in 2016 to the EU-US Privacy Shield Framework, which provided one mechanism for lawful cross-border transfers of personal data between the EU and the United States.
The EU and the United States agreed in 2016 to the EU-US Privacy Shield Framework, which provided one mechanism for lawful cross-border transfers of personal data from the EU to the United States.
Further, on October 14, 2021, ChargePoint filed a resale registration statement on Form S-1 (No. 333-260247) that was declared effective by the SEC that relates to the offer and sale from time to time by the selling security holders named in that prospectus of up to 5,695,176 shares of ChargePoint’s Common Stock in connection with the consummation of ChargePoint’s acquisition of has•to•be gmbh.
Further, on October 14, 2021, ChargePoint filed a resale registration statement on Form S-1 (No. 333-260247) that was declared effective by the SEC that relates to the offer and sale from time to time by the selling security holders named in that prospectus of up to 5,695,176 shares of ChargePoint’s Common Stock in connection with the consummation of ChargePoint’s acquisition of HTB.
Although demand for EVs has grown in recent years, there is no guarantee of continuing future demand. If the market for EVs develops more slowly than expected, or if demand for EVs decreases, ChargePoint’s business, prospects, financial condition and operating results would be harmed.
Although demand for EVs has grown in recent years, there is no guarantee of continuing future demand. If the market for EVs develops more slowly than 23 Table of Content expected, or if demand for EVs decreases, ChargePoint’s business, prospects, financial condition and operating results would be harmed.
In connection with the preparation and audit of ChargePoint’s consolidated financial statements, material weaknesses were identified in its internal control over financial reporting as of January 31, 2022.
In connection with the preparation and audit of ChargePoint’s consolidated financial statements, material weaknesses were identified in its internal control over financial reporting as of January 31, 2023.
For example, the Infrastructure Investment and Jobs Act signed into law on November 15, 2021 would provide additional funding for EVs and EV charging infrastructure through the creation of new programs and grants and the expansion of existing programs, including $7.5 billion for EV charging along highway corridors.
For example, the Infrastructure Investment and Jobs Act signed into law on November 15, 2021 provided additional funding for EVs and EV charging infrastructure through the creation of new programs and grants and the expansion of existing programs, including $7.5 billion for EV charging along highway corridors.
ChargePoint’s business may be adversely affected if it is unable to protect its technology and intellectual property from unauthorized use by third parties. ChargePoint’s success depends, at least in part, on ChargePoint’s ability to obtain, maintain, enforce and protect its core technology and intellectual property.
Risks Related to ChargePoint’s Technology, Intellectual Property and Infrastructure ChargePoint’s business may be adversely affected if it is unable to protect its technology and intellectual property from unauthorized use by third parties. ChargePoint’s success depends, at least in part, on ChargePoint’s ability to obtain, maintain, enforce and protect its core technology and intellectual property.
Failure to comply with such laws and regulations may result in substantial fines or other limitations that may adversely impact ChargePoint’s financial results or results of operation.
Failure to comply with such laws and regulations may result in substantial fines or other limitations that may adversely impact ChargePoint’s financial results or results of operations.
ChargePoint may also encounter end-customers who require that all of the 17 Table of Contents components of the products be certified as conflict free. If ChargePoint is not able to meet this requirement, such end-customers may choose to purchase products from a different company.
ChargePoint may also encounter end-customers who require that all of the components of the products be certified as conflict free. If ChargePoint is not able to meet this requirement, such end-customers may choose to purchase products from a different company.
As a result of these risks, ChargePoint’s current expansion efforts and any potential future international expansion efforts may not be successful. 19 Table of Contents Some members of ChargePoint’s management have limited experience in operating a public company. Some of ChargePoint’s executive officers have limited experience in the management of a publicly-traded company.
As a result of these risks, ChargePoint’s current expansion efforts and any potential future international expansion efforts may not be successful. Some members of ChargePoint’s management have limited experience in operating a public company. Some of ChargePoint’s executive officers have limited experience in the management of a publicly-traded company.
The estimates and forecasts relating to the size and expected growth of the target EV market, market demand and adoption, capacity to address this demand and pricing may also prove to be inaccurate. In particular, estimates regarding the current and projected EV market opportunity are difficult to predict.
The estimates and forecasts relating to the size and expected growth of the target EV market, market demand and adoption, capacity to address this 25 Table of Content demand and pricing may also prove to be inaccurate. In particular, estimates regarding the current and projected EV market opportunity are difficult to predict.
ChargePoint may need to defend against intellectual property infringement or misappropriation claims, which may be time-consuming and expensive. From time to time, the holders of intellectual property rights may assert their rights and urge ChargePoint to take licenses, and/or may bring suits alleging infringement, misappropriation or other violation of such rights.
ChargePoint may need to defend against intellectual property infringement or misappropriation claims, which may be time-consuming and expensive. From time to time, the holders of intellectual property rights may assert their rights and urge ChargePoint to enter into licenses, and/or may bring suits alleging infringement, misappropriation or other violation of such rights.
ChargePoint may face litigation and other risks as a result of the material weakness in its internal control over financial reporting and the restatement of its financial statements.
ChargePoint may face litigation and other risks as a result of the material weaknesses in its internal control over financial reporting and the restatement of its financial statements.
Future laws, regulations, standards and other obligations, and changes in the interpretation of existing laws, regulations, standards and other obligations could result in increased regulation, increased costs of compliance and penalties for non-compliance, and limitations on data collection, use, disclosure and transfer for ChargePoint and its customers.
Future laws, regulations, standards and other obligations, and changes in the 34 Table of Content interpretation of existing laws, regulations, standards and other obligations could result in increased regulation, increased costs of compliance and penalties for non-compliance, and limitations on data collection, use, disclosure and transfer for ChargePoint and its customers.
Although ChargePoint initiated a compliance program designed to ensure CCPA compliance after consulting with outside privacy counsel, ChargePoint may remain exposed to ongoing legal risks and compliance costs related to CCPA and the new California Privacy Rights Act (“CPRA”), which will become effective in most material respects starting on January 1, 2023.
Although ChargePoint initiated a compliance program designed to ensure CCPA compliance after consulting with outside privacy counsel, ChargePoint may remain exposed to ongoing legal risks and compliance costs related to CCPA and the new California Privacy Rights Act (“CPRA”), which became effective in most material respects on January 1, 2023.
In addition, the Second A&R Charter and A&R Bylaws provide that, unless ChargePoint consents in writing to another forum, the federal district courts of the United States shall, to the fullest extent of the law, be the exclusive forum for the resolution of any complaint asserting a cause of action under the Securities Act or the Exchange Act.
In addition, the Charter and A&R Bylaws provide that, unless ChargePoint consents in writing to another 40 Table of Content forum, the federal district courts of the United States shall, to the fullest extent of the law, be the exclusive forum for the resolution of any complaint asserting a cause of action under the Securities Act or the Exchange Act.
Further, any sustained downturn in demand for EVs would also harm ChargePoint’s business. 16 Table of Contents ChargePoint may also experience significant interruptions of its manufacturing operations, delays in its ability to deliver products, or increased costs as a result of: • the failure or inability to accurately forecast demand and obtain sufficient quantities of quality raw materials on a cost-effective basis; volatility in the availability and cost of materials or services, including rising prices due to inflation; • shipment delays due to transportation interruptions or capacity constraints, such as reduced availability of air or ground transport or port closures; • information technology or infrastructure failures, including those of a third party supplier or service provider; • difficulties or delays in obtaining required import or export approvals; • natural disasters or other events beyond ChargePoint’s control (such as earthquakes, utility interruptions, tsunamis, hurricanes, typhoons, floods, storms or extreme weather conditions, fires, regional economic downturns, regional or global health epidemics, including the ongoing COVID-19 pandemic); and • geopolitical turmoil, including the ongoing invasion of the Ukraine by Russia or increased trade restrictions between the United States, Russia, China and other countries, social unrest, political instability, terrorism, or other acts of war which may further adversely impact supply chains, shipping, transportation and logistics disruptions.
ChargePoint may also experience significant interruptions of its manufacturing operations, delays in its ability to deliver products, or increased costs as a result of: • the failure or inability to accurately forecast demand and obtain sufficient quantities of quality raw materials or replacement parts on a cost-effective basis; • volatility in the availability and cost of materials or services, including rising prices due to inflation; • shipment delays due to transportation interruptions or capacity constraints, such as reduced availability of air or ground transport or port closures; • information technology or infrastructure failures, including those of a third party supplier or service provider; • difficulties or delays in obtaining required import or export approvals; • natural disasters or other events beyond ChargePoint’s control (such as earthquakes, utility interruptions, tsunamis, hurricanes, typhoons, floods, storms or extreme weather conditions, fires, regional economic downturns, regional or global health epidemics, including the ongoing COVID-19 pandemic); and • geopolitical turmoil, including the ongoing invasion of Ukraine by Russia or increased trade restrictions between the United States, Russia, China and other countries, social unrest, political instability, terrorism, or other acts of war which may further adversely impact supply chains, shipping, transportation and logistics disruptions.
ChargePoint cannot guarantee that any new 23 Table of Contents products will be released in a timely manner, or at all, or achieve market acceptance. Delays in delivering new products that meet customer requirements could damage ChargePoint’s relationships with customers and lead them to seek alternative providers.
ChargePoint cannot guarantee that any new products will be released in a timely manner, or at all, or achieve market acceptance. Delays in delivering new products that meet customer requirements could damage ChargePoint’s relationships with customers and lead them to seek alternative providers.
As a result of such material weakness, such restatement, the change in accounting for ChargePoint’s previously outstanding publicly-traded warrants (the “Public Warrants”) and private placement warrants issued to NGP Switchback, LLC, the sponsor of Switchback (“ Private Placement Warrants”), and other matters raised or that may in the future be raised by the SEC, ChargePoint faces 34 Table of Contents potential for litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the restatement and material weaknesses in its internal control over financial reporting and the preparation of its financial statements.
As a result of this material weakness, the restatement, the change in accounting for ChargePoint’s previously outstanding publicly-traded warrants (the “Public Warrants”) and private placement warrants issued to NGP Switchback, LLC, the sponsor of Switchback (the “Private Placement Warrants”), and other matters raised or that may in the future be raised by the SEC, ChargePoint faces potential for litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the restatement and material weaknesses in its internal control over financial reporting and the preparation of its financial statements.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeChargePoint also maintains facilities in Amsterdam, the Netherlands; Gurgaon, India; Radstadt, Austria and Reading, United Kingdom; Scottsdale, Arizona and San Jose, California; as well as smaller sales offices in the United States and Europe. 37 Table of Contents
Biggest changeChargePoint also leases facilities in Amsterdam, the Netherlands; Gurgaon, India; Radstadt, Austria and Reading, United Kingdom; Scottsdale, Arizona and San Jose, California; as well as smaller sales offices in the United States and Europe.
Item 2. Properties. The corporate headquarters and principal operations is located in Campbell, California, and consists of approximately 72,000 square feet of office space under leases that expire in August 31, 2029.
Item 2. Properties. The corporate headquarters and principal operations is located in Campbell, California, and consists of approximately 72,000 square feet of office space under leases that expire on August 31, 2029.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings. Information with respect to this item may be found in Note 8, Commitments and Contingencies , in the accompanying notes to the consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K, under “Legal Proceedings” which is incorporated herein by reference. Item 4.
Biggest changeInformation with respect to this item may be found in Note 10, Commitments and Contingencies , in the accompanying notes to the consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K, under “Legal Proceedings” which is incorporated herein by reference. 41 Table of Content Item 4.
Mine Safety Disclosures. Not applicable. 38 Table of Contents PART II
Mine Safety Disclosures. Not applicable. 42 Table of Content PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeChargePoint issued the foregoing securities in transactions not involving an underwriter and not requiring registration under Section 5 of the Securities Act, in reliance on the exemption afforded by Section 4(a)(2) thereof. 39 Table of Contents Stock Performance The following shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or incorporated by reference into any of ChargePoint Holdings, Inc.'s other filings under the Exchange Act or the Securities Act of 1933, as amended, except to the extent ChargePoint specifically incorporates it by reference into such filing.
Biggest changeStock Performance The following shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or incorporated by reference into any of ChargePoint Holdings, Inc.'s other filings under the Exchange Act or the Securities Act of 1933, as amended, except to the extent ChargePoint specifically incorporates it by reference into such filing.
The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.
The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees. Sales of Unregistered Equity Securities and Use of Proceeds None.
Dividend Policy ChargePoint has never declared or paid dividend on its Common Stock and has no plans to do so in the foreseeable future. Number of Common Stockholders As of March 28, 2022, th ere were approximately 343 holders o f record of ChargePoint’s Common Stock.
Dividend Policy ChargePoint has never declared or paid dividend on its Common Stock and has no plans to do so in the foreseeable future. Number of Common Stockholders As of March 28, 2023, there were approximately 318 holders of record of ChargePoint’s Common Stock.
The graph tracks the performance of a $100 investment in ChargePoint's Common Stock and in each index (with the reinvestment of all dividends) from September 16, 2019 to January 31, 2022. The stock price performance included in this graph is not necessarily indicative of future price performance.
The graph tracks the performance of a $100 investment in ChargePoint's Common Stock and in each index (with the reinvestment of all dividends) from September 16, 2019 to January 31, 2023.
Company/Index September 16, 2019 January 31, 2020 January 31, 2021 January 31, 2022 ChargePoint Holdings, Inc. $ 100.00 $ 102.46 $ 389.96 $ 141.91 S&P Midcap 400 $ 100.00 $ 107.46 $ 127.30 $ 145.19 S&P Application Software $ 100.00 $ 117.05 $ 154.77 $ 174.16 S&P 500 Technology Hardware, Storage & Peripherals $ 100.00 $ 137.68 $ 230.27 $ 307.62 Item 6. [Reserved.] Not applicable.
The stock price performance included in this graph is not necessarily indicative of future price performance. 43 Table of Content Company/Index September 16, 2019 January 31, 2020 January 31, 2021 January 31, 2022 January 31, 2023 ChargePoint Holdings, Inc. $ 100.00 $ 102.46 $ 389.96 $ 141.91 $ 124.39 S&P Midcap 400 $ 100.00 $ 107.46 $ 127.30 $ 145.19 $ 148.59 S&P Application Software $ 100.00 $ 117.05 $ 154.77 $ 174.16 $ 137.81 S&P 500 Technology Hardware, Storage & Peripherals $ 100.00 $ 137.68 $ 230.27 $ 307.62 $ 269.95 Item 6. [Reserved.] Not applicable.
Removed
Securities Authorized for Issuance under Equity Compensation Plans Information relating to securities authorized for issuance under equity compensation plans will be presented in the definitive proxy statement filed in pursuant to Regulation 14A for the 2022 Annual Meeting of Stockholders to be held on or about July 12, 2022, which information is incorporated herein by reference.
Removed
Sales of Unregistered Equity Securities and Use of Proceeds On November 21, 2021, ChargePoint issued 15,596 shares of restricted Common Stock upon the cashless exercise of Legacy Warrants to purchase 20,179 shares at an exercise price of $6.03 per share. On November 24, 2021, ChargePoint issued 3,509 shares of restricted Common Stock upon the exercise of certain Legacy Warrants.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFor the Year Ended January 31, Change 2022 2021 2020 2022 vs 2021 2021 vs 2020 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) Cost of Subscriptions revenue $ 31,190 $ 20,385 $ 16,244 $ 10,805 53.0 % $ 4,141 25.5 % Percentage of total revenue 12.9 % 13.9 % 11.2 % Cost of subscriptions revenue increased during fiscal year ended January 31, 2022 compared to the same period in 2021 primarily due to an increase of customer support personnel cost resulting from headcount increases, including stock-based compensation.
Biggest changeFor the Year Ended January 31, Change 2023 2022 2021 2023 vs 2022 2022 vs 2021 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) Cost of Subscriptions revenue $ 51,416 $ 31,190 $ 20,385 $ 20,226 64.8 % $ 10,805 53.0 % Percentage of total revenue 11.0 % 12.9 % 13.9 % Cost of subscriptions revenue increased during fiscal year ended January 31, 2023 compared to fiscal year ended January 31, 2022 primarily due to increases in customer support headcount driven by ChargePoint expanding its Networked Charging Systems and resulting in an increase in salaries and personnel expenses, including stock-based compensation, as well as Assure maintenance costs. 48 Table of Content For the Year Ended January 31, Change 2023 2022 2021 2023 vs 2022 2022 vs 2021 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) Cost of Other Revenue $ 12,117 $ 8,970 $ 6,073 $ 3,147 35.1 % $ 2,897 47.7 % Percentage of total revenue 2.6 % 3.7 % 4.1 % Cost of other revenue increased for the fiscal year ended January 31, 2023 compared to fiscal year ended January 31, 2022 primarily related to increased other operating costs.
ChargePoint enters into contracts with customers that regularly include promises to transfer multiple products and services, such as charging systems, software subscriptions, extended maintenance, and professional services. For arrangements with multiple products and services, ChargePoint evaluates whether the individual products and services qualify as distinct performance obligations.
ChargePoint enters into contracts with customers that regularly include promises to transfer multiple products and services, such as Networked Charging Systems, software subscriptions, extended maintenance, and professional services. For arrangements with multiple products and services, ChargePoint evaluates whether the individual products and services qualify as distinct performance obligations.
While ChargePoint’s significant accounting policies are described in more detail in Note 2 to its consolidated financial statements included elsewhere in this Annual Report, it believes the following accounting policies and estimates to be most critical to the preparation of its consolidated financial statements.
While ChargePoint’s significant accounting policies are described in more detail in Note 2, Summary of Significant Accounting Policies , to its consolidated financial statements included elsewhere in this Annual Report, it believes the following accounting policies and estimates to be most critical to the preparation of its consolidated financial statements.
To date, ChargePoint has funded its business and the acquisitions of ViriCiti and HTB primarily with proceeds from the issuance of redeemable convertible preferred stock, proceeds from the Merger, proceeds from warrant and option exercises for cash and from customer payments.
To date, ChargePoint has funded its business and the acquisitions of ViriCiti and HTB primarily with proceeds from the issuance of redeemable convertible preferred stock, proceeds from the Merger, proceeds from warrant and option exercises for cash, convertible debt and from customer payments.
Liquidity and Capital Resources Sources of Liquidity ChargePoint has incurred net losses and negative cash flows from operations since its inception, which it anticipates will continue for the foreseeable future.
Liquidity and Capital Resources Sources of Liquidity Historical Sources of Liquidity ChargePoint has incurred net losses and negative cash flows from operations since its inception, which it anticipates will continue for the foreseeable future.
The preparation of these consolidated financial statements requires ChargePoint to make estimates and assumptions for the reported amounts of assets, liabilities, revenue, expenses and related disclosures.
GAAP. The preparation of these consolidated financial statements requires ChargePoint to make estimates and assumptions for the reported amounts of assets, liabilities, revenue, expenses and related disclosures.
Transaction Costs Expensed Transaction costs consist of legal, accounting, banking fees and other costs that were directly related to the consummation of the Merger.
Transaction costs consist of legal, accounting, banking fees and other costs that were directly related to the consummation of the Merger.
These ongoing supply chain challenges and heightened logistic costs decreased gross margins in the fiscal year ended January 31, 2022, and ChargePoint expects that gross margins will continue to be adversely affected by increased material costs and freight and logistic expenses in fiscal year ending January 31, 2023.
These ongoing supply chain challenges and heightened logistic costs decreased gross margins in the fiscal year ended January 31, 2023, and ChargePoint expects that gross margins will continue to be adversely affected by increased material costs and freight and logistic expenses in the fiscal year ending January 31, 2024.
Treasury notes with maturities corresponding to the expected term of the awards. • Expected dividend yield: The expected dividend rate is zero as ChargePoint currently has no history or expectation of declaring dividends on its Common Stock. • Expected term: The expected term represented the period these stock awards were expected to remain outstanding and is based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules, and expectations of future employee behavior.
Treasury notes with maturities corresponding to the expected term of the awards. • Expected dividend yield: The expected dividend rate is zero as ChargePoint currently has no history or expectation of declaring dividends on its Common Stock. • Expected term: The expected term represented the period the ESPP rights were expected to remain outstanding and is based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules, and expectations of future employee behavior.
CPaaS subscriptions are considered for accounting purposes to contain a lease for the customer’s use of ChargePoint’s owned and operated systems unless the location allows the customer to receive incremental economic benefit from regulatory credits earned on that EV charging system. Lessor revenue relates to operating leases and historically has not been material.
In some instances, CPaaS subscriptions are considered for accounting purposes to contain a lease for the customer’s use of ChargePoint’s owned and operated systems unless the location allows the customer to receive incremental economic benefit from regulatory credits earned on that EV charging system. Lessor revenue relates to operating leases and historically has not been material.
When agreements involve multiple distinct performance obligations, ChargePoint accounts for individual performance obligations separately if they are distinct. ChargePoint applies significant judgment in identifying and accounting for each performance obligation, as a result of evaluating terms and conditions in contracts. The transaction price is allocated to the separate performance obligations on a relative standalone selling price (“SSP”) basis.
When agreements involve multiple distinct performance obligations, ChargePoint accounts for individual performance obligations separately. ChargePoint applies significant judgment in identifying and accounting for each performance obligation as a result of evaluating terms and conditions in contracts. The transaction price is allocated to the separate performance obligations on a relative standalone selling price (“SSP”) basis.
If a material percentage of its customers were to claim these regulatory credits, ChargePoint’s revenue from this source could decline significantly, which could have an adverse effect on its revenue and overall gross margin. Prior to fiscal year 2021, ChargePoint derived a slight majority of its other revenue from these regulatory credits.
If a material percentage of its customers were to claim these incentives, ChargePoint’s revenue from this source could decline significantly, which could have an adverse effect on its revenue and overall gross margin. Prior to fiscal year 2021, ChargePoint derived a slight majority of its other revenue from these incentives.
Factors impacting the adoption of EVs include but are not limited to: perceptions about EV features, quality, safety, performance and cost; perceptions about the limited range over which EVs may be driven on a single battery charge; volatility in the cost of oil and gasoline; availability of services for EVs; consumers’ perception about the convenience and cost of charging EVs; and increases in fuel efficiency.
Factors impacting the adoption of EVs include but are not limited to: perceptions about EV features, quality, safety, performance and cost; perceptions about the limited range over which EVs may be driven on a single battery charge; volatility in the cost of oil and gasoline; availability of services for EVs; consumers’ perception about the convenience and cost of charging EVs; and increases in fuel efficiency of internal combustion engine vehicles.
The conditions caused by the COVID-19 pandemic, such as more permanent work-from-home policies, are likely to continue affecting the rate of global infrastructure spending, and thus to continue to adversely impact ChargePoint’s commercial business and its overall gross margin as ChargePoint’s commercial business contributes higher margins than its residential and fleet businesses.
Also, more permanent work-from-home policies, initially caused by the COVID-19 pandemic, are likely to continue affecting the rate of global infrastructure spending, and thus to continue to adversely impact ChargePoint’s commercial business and its overall gross margin as ChargePoint’s commercial business contributes higher margins than its residential and fleet businesses.
Stock-based compensation is measured at 53 Table of Contents the grant date, based on the fair value of the award and is recognized as an expense, net of estimated forfeitures, on a straight-line basis over the requisite service period.
Stock-based compensation is measured at the grant date, based on the fair value of the award and is recognized as an expense, net of estimated forfeitures, on a straight-line basis over the requisite service period.
As part of ChargePoint’s Networked Charging Systems, subscriptions and other offerings, it provides an open platform that integrates with system hardware from ChargePoint and other manufacturers, connecting systems over an intelligent network that provides real-time information about charging sessions and full control, support and management of the Networked Charging Systems.
ChargePoint’s Networked Charging Systems, subscriptions and other offerings provide an open platform that integrates with system hardware from ChargePoint and other manufacturers, connecting systems over an intelligent network that provides real-time information about charging sessions and full control, support and management of the Networked Charging Systems.
Net Cash Provided By (Used In) Investing Activities During the year ended January 31, 2022, net cash used in investing activities was $221.7 million consisting of cash paid for acquisitions, net of cash acquired, of $205.3 million and purchases of property and equipment of $16.4 million.
During the year ended January 31, 2022, net cash provided by investing activities was $221.7 million, consisting of cash paid for acquisitions, net of cash acquired, of $205.3 million, partially offset by purchases of property and equipment of $16.4 million.
Cost of revenue for the sale of Networked Charging Systems also consists of salaries and related personnel expenses, including stock-based compensation, warranty provisions, depreciation of manufacturing related equipment and facilities, amortization of capitalized internal-use software, and allocated facilities and information technology expenses. As revenue is recognized, ChargePoint accounts for estimated warranty cost as a charge to cost of revenue.
Cost of revenue for the sale of Networked Charging Systems also consists of salaries and related personnel expenses, including stock-based compensation, warranty provisions, depreciation of manufacturing related equipment and facilities, and allocated facilities and information technology expenses. As revenue is recognized, ChargePoint accounts for estimated warranty cost as a charge to cost of revenue.
ChargePoint also continuously evaluates and may adjust its expenditures based on its launch plans for new products, as well as other factors including the pace and prioritization of current projects under development and the addition of new projects.
ChargePoint also continuously evaluates and may adjust its expenditures, such as new product introduction costs, based on its launch plans for new products, as well as other factors including the pace and prioritization of current projects under development and the addition of new projects.
ChargePoint’s future capital requirements will depend on many factors, including its revenue growth 50 Table of Contents rate, the timing and the amount of cash received from customers, the expansion of sales and marketing activities, the timing and extent of spending to support development efforts, expenses associated with its international expansion, the introduction of network enhancements and the continuing market adoption of its network.
ChargePoint’s future capital requirements will depend on many factors, including its revenue growth rate, the timing and the amount of cash received from customers, the expansion of sales and marketing activities, the timing and extent of spending to support development efforts, expenses associated with its international expansion, the introduction of network enhancements and the continuing market adoption of its Networked Charging Systems.
Research and development costs are expensed as incurred. ChargePoint expects its research and development expenses to increase on an absolute basis for the foreseeable future as ChargePoint continues to invest in research and development activities to achieve its technology and product roadmap.
ChargePoint expects its research and development expenses to increase on an absolute basis for the foreseeable future as ChargePoint continues to invest in research and development activities to achieve its technology and product roadmap.
However, at least in the short term, as ChargePoint continues to optimize for customer acquisition and prioritize assurance of supply of its products as part of the “land-and-expand” model, launches new Networked Charging Systems products, grows its presence in Europe where it has not yet achieved economies of scale, and expands its solutions for its fleet customers, it expects gross margin to experience pressure and variability from period to period.
However, at least in the short term, as the product mix continues to vary and as ChargePoint continues to optimize for customer acquisition and prioritize assurance of supply of its products as part of its “land and expand” model, launches new Networked Charging Systems products, grows its presence in Europe where it has not yet achieved economies of scale, and expands its solutions for its fleet customers, gross margin will vary from period to period.
For example, the infrastructure Investment and Jobs Act signed into law on November 15, 2021 would provide additional funding for EVs and EV charging infrastructure through the creation of new programs and grants and the expansion of existing programs, including $7.5 billion for EV charging along highway corridors.
For example, the Infrastructure Investment and Jobs Act signed into law on November 15, 2021 (the “Jobs Act”) provided additional funding for EVs and EV charging infrastructure through the creation of new programs and grants and the expansion of existing programs, including $7.5 billion for EV charging along highway corridors and communities.
Revenue from regulatory credits is recognized when the regulatory credits are transferred. Revenue from fees for owned and operated sites is recognized over time on a straight-line basis over the performance period of the service contract as ChargePoint has an ongoing obligation to deliver such services.
Revenue from fees for owned and operated sites is recognized over time on a straight-line basis over the performance period of the service contract as ChargePoint has an ongoing obligation to deliver such services. Revenue from professional services is recognized as the services are rendered.
ChargePoint offers a range of Networked Charging Systems products which vary widely in selling price and associated gross margin, as for example ChargePoint’s commercial business contributes higher margins than its residential and fleet businesses.
Gross Profit and Gross Margin Gross profit is revenue less cost of revenue and gross margin is gross profit as a percentage of revenue. ChargePoint offers a range of Networked Charging Systems products which vary widely in selling price and associated gross margin, as, for example, ChargePoint’s commercial business contributes higher margins than its residential and fleet businesses.
In addition, ChargePoint may accelerate its expenditures where it sees growth opportunities, which may impact gross margin until upfront costs and inefficiencies are absorbed and normalized operations are achieved.
In addition, ChargePoint may accelerate its expenditures where it sees growth opportunities, which may further impact 45 Table of Content gross margin until upfront costs and inefficiencies are absorbed and normalized operations are achieved.
General and Administrative Expenses General and administrative expenses consist primarily of salaries and related personnel expenses, including stock-based compensation, related to finance, legal and human resource functions, contractor and professional services fees, audit and compliance expenses, insurance costs, bad debt expenses, amortization of capitalized internal-use software and general corporate expenses, including allocated facilities and information technology expenses.
General and Administrative Expenses General and administrative expenses consist primarily of salaries and related personnel expenses, including stock-based compensation, related to finance, legal and human resource functions, contractor and professional services fees, audit and compliance expenses, insurance costs, and general corporate expenses, including allocated facilities and information technology expenses.
During the year ended January 31, 2021, net cash provided by investing activities was $35.5 million, consisting of maturities of investments of $47.0 million, partially offset by purchases of property and equipment of $11.5 million. 51 Table of Contents Net Cash Provided by Financing Activities During the year ended January 31, 2022, net cash provided by financing activities was $549.7 million, consisting of net proceeds from the Merger and PIPE financing of $511.6 million, proceeds from the exercise of warrants of $118.9 million and proceeds from exercises of vested and unvested stock options of $4.9 million and change in driver funds and amounts due to customers of $3.7 million, partially offset by repayment of borrowings of $36.1 million, payment of transaction costs related to the Merger of $32.5 million and payment of tax withholding obligations on settlement of earnout shares of $20.9 million.
During the year ended January 31, 2022, net cash provided by financing activities was $549.7 million, consisting of net proceeds from the Merger and PIPE financing of $511.6 million, proceeds from the exercise of warrants of $118.9 million and proceeds from exercises of vested and unvested stock options of $4.9 million and change in driver funds and amounts due to customers of $3.7 million, partially offset by repayment of borrowings of $36.1 million, payment of transaction costs related to the Merger of $32.5 million and payment of tax withholding obligations on settlement of Earnout Shares of $20.9 million.
Impact of New Product Releases and Investments in Growth As ChargePoint introduces new products, such as the release of its Level 3 DC fast charger in fiscal year 2020, its gross margins may be initially negatively impacted by launch costs and lower volumes until it achieves targeted cost reductions.
Impact of New Product Releases and Investments in Growth As ChargePoint introduces new products, such as the release of its Express Plus DC fast charger in fiscal year 2022 and CP6000 Level 2 AC charger in fiscal year 2023, its gross margins may be initially negatively impacted by launch costs and lower volumes until it achieves targeted cost reductions.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis provides information which ChargePoint’s management believes is relevant to an assessment and understanding of ChargePoint’s consolidated results of operations and financial condition.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis provides information which ChargePoint’s management believes is relevant to an assessment and understanding of ChargePoint’s consolidated results of operations and financial condition. ChargePoint’s fiscal year ends on January 31.
The spread of COVID-19 has disrupted ChargePoint’s supply chain and heightened its freight and logistic costs, and has similarly disrupted manufacturing, delivery and overall supply chain of vehicle manufacturers and suppliers, which has led to fluctuations in EV sales in markets around the world.
The disruption to ChargePoint’s supply chain has heightened its material, freight and logistic costs, and has similarly disrupted manufacturing, delivery and overall supply chain of vehicle manufacturers and suppliers, which has contributed to fluctuations in EV sales in markets around the world.
Changes in fair value of redeemable convertible preferred stock warrant liability are recognized in the consolidated statements of operations. ChargePoint adjusts the liability for changes in fair value until the earlier of the exercise or expiration of the warrants and conversion of redeemable convertible preferred stock into Common Stock.
ChargePoint adjusts the liability for changes in fair value until the earlier of the exercise or expiration of the warrants and conversion of redeemable convertible preferred stock into Common Stock.
Research and Development Expenses Research and development expenses consist primarily of salaries and related personnel expenses, including stock-based compensation, for personnel related to the development of improvements and expanded features for ChargePoint’s services, as well as quality assurance, testing, product management, amortization of capitalized internal-use software, and allocated facilities and information technology expenses.
Research and Development Expenses Research and development expenses consist primarily of salaries and related personnel expenses, including stock-based compensation, for personnel related to the development of improvements and expanded features for ChargePoint’s services, as well as quality assurance, testing, product management, and allocated facilities and information technology expenses. Research and development costs are expensed as incurred.
Further, geopolitical factors, such as the invasion of the Ukraine by Russia may negatively impact the global automotive supply chain and reduce the manufacturing of automobiles, including EVs.
Further, geopolitical factors, such as the invasion of Ukraine by Russia, conflicts between the United States and China or between China and Taiwan may negatively impact the global automotive supply chain and reduce the manufacturing of automobiles, including EVs.
Sales and Marketing Expenses Sales and marketing expenses consist primarily of salaries and related personnel expenses, including stock-based compensation, sales commissions, professional services fees, travel, marketing and promotional expenses amortization of capitalized internal-use software and allocated facilities and information technology expenses.
Sales and Marketing Expenses Sales and marketing expenses consist primarily of salaries and related personnel expenses, including stock-based compensation, sales commissions, professional services fees, travel, marketing and promotional expenses, bad debt expenses, and allocated facilities and information technology expenses.
For example, ongoing supply chain challenges and heightened logistic costs related to disruptions caused by COVID-19 and component shortages decreased gross margins in the fiscal year ended January 31, 2022, and ChargePoint expects gross margins will continue to be adversely affected by increased material costs and freight and logistic expenses in fiscal year ending January 31, 2023.
For example, ongoing supply chain challenges, heightened logistic costs, component shortages and product transition charges decreased ChargePoint’s gross margins in the fiscal year ended January 31, 2023, and ChargePoint expects gross margins will continue to be adversely affected by increased material costs and freight and logistic expenses in the fiscal year ending January 31, 2024.
ChargePoint expects its general and administrative expenses to increase in absolute dollars as it continues to grow its business and to operate as a public company, including expenses necessary to comply with the rules and regulations applicable to companies listed on a national securities exchange and related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, as well as higher expenses for director and officer insurance, investor relations and legal, accounting and other professional services.
ChargePoint expects its general and administrative expenses to increase in absolute dollars as it continues to grow its business and to operate as a public company, including expenses related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, as well as higher expenses for investor relations and legal, accounting and other professional services.
As of January 31, 2022 and 2021, ChargePoint had cash, cash equivalents and restricted cash of $315.6 million and $145.9 million, respectively. ChargePoint believes that its cash on hand and cash generated from sales to customers will satisfy its working capital and capital requirements for at least the next twelve months.
As of January 31, 2023 and 2022, ChargePoint had cash, cash equivalents and restricted cash and short-term investments of $399.5 million and $315.6 million, respectively. ChargePoint believes that its cash and short-term investments, and cash generated from sales to customers will satisfy its working capital and capital requirements for at least the next twelve months.
For the Year Ended January 31, Change 2022 2021 2020 2022 vs 2021 2021 vs 2020 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) General and administrative expenses $ 81,380 $ 25,922 $ 23,945 $ 55,458 213.9 % $ 1,977 8.3 % Percentage of total revenue 33.8 % 17.7 % 16.6 % General and administrative expenses increased during the fiscal year ended January 31, 2022 compared to the same period in 2021 primarily attributable to a $27.4 million increase in stock-based compensation expense resulting from RSU grants and stock option grants, a $7.6 million increase in salary expense due to headcount growth, a $11.1 million increase in professional services fees related to acquisitions and expenses associated with an underwritten secondary offering of shares held by certain selling stockholders in July 2021, a $2.1 million increase in ViriCiti Earnout liability and a $9.0 million increase in consulting expenses.
For the Year Ended January 31, Change 2023 2022 2021 2023 vs 2022 2022 vs 2021 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) General and administrative expenses $ 90,366 $ 81,380 $ 25,922 $ 8,986 11.0 % $ 55,458 213.9 % Percentage of total revenue 19.3 % 33.8 % 17.7 % General and administrative expenses increased during the fiscal year ended January 31, 2023 compared to fiscal year ended January 31, 2022 primarily attributable to a $9.9 million increase in salary and benefit expenses due to headcount growth, a $4.7 million increase in stock-based compensation expense resulting mainly from RSU grants, a $3.2 million increase in consulting expenses, partially offset by a $6.8 million decrease in professional services fees related to acquisitions and expenses associated with an underwritten secondary offering of shares held by certain selling stockholders and other expense decreases.
For the Year Ended January 31, Change 2022 2021 2020 2022 vs 2021 2021 vs 2020 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) Networked Charging Systems $ 173,850 $ 91,893 $ 101,012 $ 81,957 89.2 % $ (9,119) (9.0) % Percentage of total revenue 72.1 % 62.7 % 69.9 % Networked Charging Systems revenue increased for fiscal year ended January 31, 2022 compared to fiscal year 2021 primarily due to a continued increase in demand from customers resulting in higher volumes of systems delivered across ChargePoint’s major product families.
For the Year Ended January 31, Change 2023 2022 2021 2023 vs 2022 2022 vs 2021 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) Networked Charging Systems $ 363,622 $ 173,850 $ 91,893 $ 189,772 109.2 % $ 81,957 89.2 % Percentage of total revenue 77.7 % 72.1 % 62.7 % Networked Charging Systems revenue increased for fiscal year ended January 31, 2023 compared to fiscal year ended January 31, 2022 primarily due to a continued increase in demand from customers in ChargePoint’s three verticals, resulting in higher volume of Networked Charging Systems delivered across ChargePoint’s major product families.
Other Income (Expense), Net Other income (expense), net consists primarily of foreign currency transaction gains and losses. 49 Table of Contents Year Ended January 31, Year-over-Year Change 2022 2021 2020 2022 to 2021 2021 to 2020 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) Other income (expense), net $ (2,775) $ 229 $ (565) $ (3,004) (1311.8) % $ 794 (140.5) % Percentage of total revenue (1.2) % 0.2 % (0.4) % Other income (expense), net changed from $0.2 million during the year ended January 31, 2021 to $(2.8) million during the year ended January 31, 2022 due to unfavorable changes in foreign exchange rates.
Other Income (Expense), Net Other income (expense), net consists primarily of foreign currency transaction gains and losses. 51 Table of Content Year Ended January 31, Year-over-Year Change 2023 2022 2021 2023 to 2022 2022 to 2021 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) Other income (expense), net $ (1,569) $ (2,775) $ 229 $ 1,206 (43.5) % $ (3,004) (1311.8) % Percentage of total revenue (0.3) % (1.2) % 0.2 % Other income (expense), net changed from $(2.8) million during the fiscal year ended January 31, 2022 to $(1.6) million during the fiscal year ended January 31, 2023 due to favorable changes in foreign exchange rates.
However, revenue from this source as a percentage of total revenue has declined recently and may continue to decline over time. Further, the availability of such credits depends on continued governmental support for these programs.
However, revenue from this source as a percentage of total revenue has declined since fiscal 2021 and may continue to decline as a percentage of total revenue going forward. Further, the availability of such incentives depends on continued governmental support for these programs.
For the Year Ended January 31, Change 2022 2021 2020 2022 vs 2021 2021 vs 2020 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) Cost of Networked Charging Systems revenue $ 147,313 $ 87,083 $ 105,940 $ 60,230 69.2 % $ (18,857) (17.8) % Percentage of total revenue 61.1 % 59.4 % 73.3 % Cost of Networked Charging Systems revenue increased during the fiscal year ended January 31, 2022 compared to the same period in 2021 primarily due to an increase in the number of Networked Charging Systems delivered.
For the Year Ended January 31, Change 2023 2022 2021 2023 vs 2022 2022 vs 2021 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) Cost of Networked Charging Systems revenue $ 318,628 $ 147,313 $ 87,083 $ 171,315 116.3 % $ 60,230 69.2 % Percentage of total revenue 68.1 % 61.1 % 59.4 % Cost of Networked Charging Systems revenue increased during the fiscal year ended January 31, 2023 compared to fiscal year ended January 31, 2022 primarily due to an increase in the number of Networked Charging Systems delivered.
Change in Fair Value of Contingent Earnout Liability Contingent earnout liability was accounted for as a liability as of the date of the Merger and remeasured to fair value until the Earnout Triggering Events were met for the first two tranches in March 2021 and the corresponding Earnout Shares were issued.
Contingent earnout liability was accounted for as a liability as of the date of the Merger (as described in Note 12, Stock Warrants and Earnout, to ChargePoint’s notes to the consolidated financial statements) and remeasured to fair value until the Earnout Triggering Events (as described in Note 12, Stock Warrants and Earnout, to ChargePoint’s notes to the consolidated financial statements) were met for the first two tranches in March 2021 and the corresponding Earnout Shares (as described in Note 12, Stock Warrants and Earnout, to ChargePoint’s notes to the consolidated financial statements) were issued.
Any equity securities issued may also provide for rights, preferences or privileges senior to those of holders of Common Stock. If ChargePoint raises funds by issuing debt securities, these debt securities would have rights, preferences and privileges senior to those of holders of Common Stockholders. The terms of debt securities or borrowings could impose significant restrictions on ChargePoint’s operations.
Any equity securities issued may also provide for rights, preferences or privileges senior to those of holders of Common Stock. If ChargePoint raises funds by issuing debt securities, these debt securities would have rights, preferences and privileges senior to those of holders of Common Stock.
For the Year Ended January 31, Change 2022 2021 2020 2022 vs 2021 2021 vs 2020 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) Gross Profit $ 53,533 $ 32,949 $ 18,042 $ 20,584 62.5 % $ 14,907 82.6 % Gross Margin 22.2 % 22.5 % 12.5 % Gross profit increased for the fiscal year ended January 31, 2022 compared to the same period in 2021 primarily due to an increase in Networked Charging Systems sales that resulted from an increase in the number of Networked Charging Systems delivered.
For the Year Ended January 31, Change 2023 2022 2021 2023 vs 2022 2022 vs 2021 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) Gross Profit $ 85,933 $ 53,533 $ 32,949 $ 32,400 60.5 % $ 20,584 62.5 % Gross Margin 18.4 % 22.2 % 22.5 % Gross profit increased for the fiscal year ended January 31, 2023 compared to fiscal year ended January 31, 2022 primarily due to an increase in Networked Charging Systems sales that resulted from an increase in the number of Networked Charging Systems delivered and an increase in subscriptions revenue.
Collectability of revenue is reasonably assured based on historical evidence of collectability of fees ChargePoint charges its customers. The transaction price in the contract is allocated to each distinct performance obligation in an amount that represents the relative amount of consideration expected to be received in exchange for satisfying each performance obligation. Revenue is recognized when performance obligations are satisfied.
The transaction price in the contract is allocated to each distinct performance obligation in an amount that represents the relative amount of consideration expected to be received in exchange for satisfying each performance obligation. Revenue is recognized when performance obligations are satisfied.
For the Year Ended January 31, Change 2022 2021 2020 2022 vs 2021 2021 vs 2020 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) Sales and marketing expenses $ 92,550 $ 53,002 $ 56,997 $ 39,548 74.6 % $ (3,995) (7.0) % Percentage of total revenue 38.4 % 36.2 % 39.4 % Sales and marketing expenses increased during the fiscal year ended January 31, 2022 compared to the same period in 2021 primarily attributable to a $18.1 million increase in salary, bonus and commissions due to headcount growth, a $7.7 million increase in stock-based compensation expense resulting mainly from RSU grants, a $3.2 million increase in amortization expense mainly due to 47 Table of Contents acquired customer relationship intangible assets from business combinations, a $2.8 million increase in marketing expense, and a $2.0 million increase in consulting expense.
For the Year Ended January 31, Change 2023 2022 2021 2023 vs 2022 2022 vs 2021 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) Sales and marketing expenses $ 142,392 $ 92,550 $ 53,002 $ 49,842 53.9 % $ 39,548 74.6 % Percentage of total revenue 30.4 % 38.4 % 36.2 % Sales and marketing expenses increased during the fiscal year ended January 31, 2023 compared to fiscal year ended January 31, 2022 primarily attributable to a $20.4 million increase in compensation related expenses due to headcount growth, a $8.2 million increase in stock-based compensation expense resulting mainly from RSU grants, a $5.5 million increase in amortization expense mainly due to acquired customer relationship intangible assets from business combinations, a $3.5 million increase in travel expenses, and a $3.5 million increase in consulting and marketing expense.
During the year ended January 31, 2021, net cash used in operating activities was $91.8 million, consisting primarily of a net loss of $197.0 million, partially offset by a decrease in net operating assets of $10.2 million and non-cash charges of $95.0 million.
During the year ended January 31, 2022, net cash used in operating activities was $157.2 million, consisting primarily of a net loss of $132.2 million, partially offset by a decrease in net operating assets of $17.1 million and non-cash charges of $42.0 million.
ChargePoint makes estimates, assumptions and judgments to determine its provision for its income taxes, deferred tax assets and liabilities, and any valuation allowance recorded against deferred tax assets. ChargePoint assesses the likelihood that its deferred tax assets will be recovered from future taxable income, and to the extent it believes that recovery is not likely, it establishes a valuation allowance.
ChargePoint assesses the likelihood that its deferred tax assets will be recovered from future taxable income, and to the extent it believes that recovery is not likely, it establishes a valuation allowance.
Transaction costs related to the issuance of shares were recognized in stockholders’ equity (deficit) while costs associated with the warrant liabilities and non-capitalized amounts were expensed in the consolidated statements of operations upon the completion of the Merger on February 26, 2021.
Transaction costs related to the issuance of shares were recognized in stockholders’ equity (deficit) while costs of $7.0 million associated with the warrant liabilities and non-capitalized amounts were expensed during the fiscal year ended January 31, 2022 upon the completion of the Merger on February 26, 2021.
The estimated warranty cost is based on historical and predicted product failure rates and repair expenses. 45 Table of Contents Subscriptions Cost of Subscriptions revenue includes salaries and related personnel expenses, including stock-based compensation and third-party support costs to manage the systems and helpdesk services for drivers and site hosts, network and wireless connectivity costs for subscription services, field costs for Assure, depreciation of owned and operated systems used in CPaaS arrangements, amortization of capitalized internal-use software development costs, allocated facilities and information technology expenses.
Subscriptions Cost of Subscriptions revenue includes salaries and related personnel expenses, including stock-based compensation and third-party support costs to manage the systems and helpdesk services for drivers and site hosts, network and wireless connectivity costs for subscription services, field costs for Assure, depreciation of owned and operated systems used in CPaaS arrangements, allocated facilities and information technology expenses.
Contractual Obligations and Commitments ChargePoint’s material cash requirements include the following contractual obligations and commitments as of January 31, 2022. For more information regarding ChargePoint’s other contractual obligations, refer to Note 8 to its consolidated financial statements included elsewhere in this Annual Report. Operating Lease Obligations ChargePoint has operating lease obligations for office spaces and data centers.
Contractual Obligations and Commitments ChargePoint’s material cash requirements include the following contractual obligations and commitments as of January 31, 2023. For more information regarding ChargePoint’s other contractual obligations, refer to Note 10, Commitments and Contingencies , to its notes to the consolidated financial statements included elsewhere in this Annual Report.
Cash Flows For the Fiscal Years Ended January 31, 2022, 2021 and 2020 The following table sets forth a summary of ChargePoint’s cash flows for the periods indicated: Year Ended January 31, 2022 2021 2020 (in thousands) Net cash (used in) provided by: Operating activities $ (157,178) $ (91,846) $ (87,936) Investing activities (221,740) 35,530 (61,899) Financing activities 549,687 128,913 17,158 Effects of exchange rates on cash, cash equivalents, and restricted cash (1,025) 141 132 Net increase (decrease) in cash, cash equivalents and restricted cash $ 169,744 $ 72,738 $ (132,545) Net Cash Used in Operating Activities During the year ended January 31, 2022, net cash used in operating activities was $157.2 million, consisting primarily of a net loss of $132.2 million and non-cash charges of $42.0 million, partially offset by a change in operating assets and liabilities of $17.1 million.
Cash Flows For the Fiscal Years Ended January 31, 2023, 2022 and 2021 The following table sets forth a summary of ChargePoint’s cash flows for the periods indicated: Year Ended January 31, 2023 2022 2021 (in thousands) Net cash (used in) provided by: Operating activities $ (267,049) $ (157,178) $ (91,846) Investing activities (126,154) (221,740) 35,530 Financing activities 372,859 549,687 128,913 Effects of exchange rates on cash, cash equivalents, and restricted cash (729) (1,025) 141 Net increase (decrease) in cash, cash equivalents and restricted cash $ (21,073) $ 169,744 $ 72,738 53 Table of Content Net Cash Used in Operating Activities During the year ended January 31, 2023, net cash used in operating activities was $267.0 million, consisting primarily of a net loss of $345.1 million and change in operating assets and liabilities of $64.3 million, offset by an add back of non-cash charges of $142.4 million.
ChargePoint determines SSP using observable pricing when available, which takes into consideration market conditions and customer specific factors while maximizing observable inputs. When observable pricing is not available, ChargePoint first allocates to the performance obligations with established SSPs and then applies the residual approach to allocate the remaining transaction price.
ChargePoint determines SSP using observable pricing when available, which takes into consideration market conditions and customer specific factors while maximizing observable inputs. When observable pricing is not available, ChargePoint applies the residual approach to estimate the SSP.
Discussions of fiscal year 2020 items 40 Table of Contents and year-over-year comparisons between fiscal year 2021 and fiscal year 2020 are not included in this Form 10-K, and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company’s Form S-1 Registration Statement filed on October 14, 2021.
Discussions of fiscal year 2021 items and year-over-year comparisons between fiscal year 2022 and fiscal year 2021 are not included in this Form 10-K, and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company’s Annual Report on Form 10-K filed on April 4, 2022.
Accordingly, ChargePoint’s gross profit and gross margin have varied and are expected to continue to vary from period to period due to revenue levels; geographic, vertical and product mix; new product introductions, and its efforts to optimize its operations and supply chain.
Accordingly, ChargePoint’s gross profit and gross margin have varied and are expected to continue to vary from period to period due to revenue levels; geographic, vertical and product mix; new product transition costs; and its efforts to optimize its operations and supply chain and purchase price variances it may need to pay due to component shortages or supply chain disruptions.
A significant portion of ChargePoint’s Networked Charging Systems revenue is presently derived from the sale of Level 2 AC products. ChargePoint generally recognizes revenue from sales of Networked Charging Systems upon shipment to the customer, at which point ChargePoint’s performance obligation is satisfied.
A significant portion of ChargePoint’s Networked Charging Systems revenue is presently derived from the sale of AC products. ChargePoint generally recognizes revenue from sales of Networked Charging Systems upon shipment to the customer, at which point ChargePoint’s performance obligation is satisfied. Subscriptions Subscriptions revenue consists of services related to Cloud, as well as extended maintenance service plans under Assure.
For the Year Ended January 31, Change 2022 2021 2020 2022 vs 2021 2021 vs 2020 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) Research and Development Expenses $ 145,043 $ 75,017 $ 69,464 $ 70,026 93.3 % $ 5,553 8.0 % Percentage of total revenue 60.2 % 51.2 % 48.1 % Research and development expenses increased during the fiscal year ended January 31, 2022 compared to the same period in 2021 and was primarily attributable to a $23.7 million increase in stock-based compensation expense from restricted stock unit (“RSU”) grants, a $22.7 million increase in salary and bonus expenses due to headcount growth, a $11.8 million increase in engineering materials and services costs, a $3.3 million increase in consulting services, as well as a $4.1 million increase in allocated costs.
For the Year Ended January 31, Change 2023 2022 2021 2023 vs 2022 2022 vs 2021 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) Research and Development Expenses $ 194,957 $ 145,043 $ 75,017 $ 49,914 34.4 % $ 70,026 93.3 % Percentage of total revenue 41.6 % 60.2 % 51.2 % 49 Table of Content Research and development expenses increased during the fiscal year ended January 31, 2023 compared to fiscal year ended January 31, 2022 and was primarily attributable to a $24.9 million increase in compensation related expenses due to headcount growth, a $12.5 million increase in stock-based compensation expense from restricted stock unit (“RSU”) grants, a $4.0 million increase in engineering materials and services costs, as well as a $5.5 million increase in depreciation and other expenses.
Key Factors Affecting Operating Results ChargePoint believes its performance and future success depend on several factors that present significant opportunities for it but also pose risks and challenges, including those discussed below: Growth in EV Adoption ChargePoint’s revenue growth is directly tied to the number of passenger and commercial EVs sold, which it believes drives the demand for charging infrastructure.
ChargePoint has funded its operations primarily from customer payments, the issuance of redeemable convertible preferred stock and convertible notes, exercise proceeds from options and warrants, borrowings under loan facilities and proceeds from the Reverse Recapitalization. 44 Table of Content Key Factors Affecting Operating Results ChargePoint believes its performance and future success depend on several factors that present significant opportunities for it but also pose risks and challenges, including those discussed below: Growth in EV Adoption ChargePoint’s revenue growth is directly tied to the number of passenger and commercial EVs sold, which it believes drives the demand for charging infrastructure.
From inception to January 31, 2022, ChargePoint has raised aggregate net cash proceeds of $615.7 million from the sale of shares of redeemable convertible preferred stock and $479.2 million from the Merger and the concurrent purchase by certain investors of shares of Common Stock pursuant to separate subscription agreements (the “PIPE financing”).
From inception to January 31, 2023, ChargePoint has raised aggregate net cash proceeds of $615.7 million from the sale of shares of redeemable convertible preferred stock and $479.2 million from the Merger and the concurrent purchase by certain investors of shares of Common Stock pursuant to separate subscription agreements (the “PIPE financing”). 2027 Convertible Notes In April 2022, ChargePoint completed a private placement of $300.0 million aggregate principal amount of 2027 Convertible Notes, which will mature on April 1, 2027 (the “2027 Convertible Notes”).
Many of these competitors have limited funding, which could cause poor customer experiences and have a negative impact on overall EV adoption in Europe. ChargePoint’s growth in Europe requires differentiating itself as compared to these existing competitors. If ChargePoint is unable to continue penetrating the market in Europe, its financial condition and results of operations would be negatively impacted.
Many of these competitors have limited funding, which could cause poor customer experiences and have a negative impact on overall EV adoption in Europe. ChargePoint’s growth in Europe requires differentiating itself as compared to these existing competitors.
Overview ChargePoint designs, develops and markets networked EV charging system infrastructure (“Networked Charging Systems”) and cloud-based services which enable consumers the ability to locate, reserve, authenticate and transact EV charging sessions (“Cloud” or “Cloud Services”).
Overview ChargePoint designs, develops and markets networked EV charging system infrastructure (“Networked Charging Systems”) connected through cloud-based services (“Cloud” or “Cloud Services”) which (i) enable charging systems owners, or hosts, to manage their Networked Charging Systems, and (ii) enable drivers to locate, reserve and authenticate Networked Charging Systems and to transact EV charging sessions on those systems.
This evaluation requires ChargePoint to assess the nature of each of its Networked Charging Systems, subscriptions and other offerings and how they are provided in the context of the contract, including whether they are significantly integrated which may require judgment based on the facts and circumstances of the contract. 52 Table of Contents The transaction price for each contract is determined based on the amount ChargePoint expects to be entitled to receive in exchange for transferring the promised products or services to the customer.
This evaluation requires ChargePoint to assess the nature of each of its Networked Charging Systems, subscriptions and other offerings and how they are provided in the context of the contract, including whether they are significantly integrated which may require judgment based on the facts and circumstances of the contract.
Subscriptions Subscriptions revenue consists of services related to Cloud, as well as extended maintenance service plans under Assure. Subscriptions revenue also consists of CPaaS revenue which combines the customer’s use of ChargePoint’s owned and operated systems with Cloud and Assure programs into a single subscription.
Subscriptions revenue also consists of CPaaS revenue which combines the customer’s use of ChargePoint’s owned and operated systems with Cloud and Assure programs into a single, typically multi-year subscription.
During the remeasurement period, which extends no later than one year from the acquisition date, ChargePoint may record certain adjustments to the carrying value of the assets acquired and liabilities assumed with a corresponding offset to goodwill. Stock-based Compensation Determining the grant date fair value of options using the Black-Scholes option-pricing model requires management to make certain assumptions and judgments.
During the remeasurement period, which extends no later than one year from the acquisition date, ChargePoint may record certain adjustments to the carrying value of the assets acquired and liabilities assumed with a corresponding offset to goodwill.
Year Ended January 31, Year-over-Year Change 2022 2021 2020 2022 to 2021 2021 to 2020 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) Provision (benefit) for income taxes $ (2,930) $ 198 $ 224 $ (3,128) (1579.8) % $ (26) (11.6) % Percentage of loss before provision (benefit) for income taxes 2.2 % (0.1) % (0.2) % The benefit for income taxes increased during the fiscal year ended January 31, 2022 as compared to the same period in 2021 due to valuation allowance release and losses from the acquisitions in the current year.
Year Ended January 31, Year-over-Year Change 2023 2022 2021 2023 to 2022 2022 to 2021 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) Provision (benefit) for income taxes $ (2,167) $ (2,930) $ 198 $ 763 (26.0) % $ (3,128) (1579.8) % Percentage of loss before provision (benefit) for income taxes 0.6 % 2.2 % (0.1) % The benefit for income taxes decreased during the fiscal year ended January 31, 2023 as compared to fiscal year ended January 31, 2022 primarily due to changes to deferred tax liability.
This section of this Form 10-K discusses fiscal year 2022 and 2021 items and year-to-year comparisons between fiscal year 2022 and 2021.
References to fiscal years 2023, 2022, and 2021, relate to the fiscal years ended January 31, 2023, January 31, 2022, and January 31, 2021, respectively. This section of this Form 10-K discusses fiscal year 2023 and 2022 items and year-to-year comparisons between fiscal year 2023 and 2022.
Inventory Inventory is stated at the lower of cost or net realizable value. Cost is computed using standard cost, which approximates actual cost, on a first-in, first-out basis.
After establishing the SSP, ChargePoint then allocates the transaction price using the relative selling price method. 55 Table of Content Inventory Inventory is stated at the lower of cost or net realizable value. Cost is computed using standard cost, which approximates actual cost, on a first-in, first-out basis.
In addition, ChargePoint expects 46 Table of Contents gross margins will continue to be adversely affected by increased material costs, freight and logistic expenses as a result of ongoing worldwide supply chain disruptions and related measures.
In addition, ChargePoint expects gross margins will continue to be adversely affected by increased material costs, particularly due to the shortage of certain semiconductors, as a result of the ongoing worldwide supply chain disruptions.
Subscriptions revenue is generally recognized over time on a straight-line basis as ChargePoint has an ongoing obligation to deliver such services to the customer. 44 Table of Contents Other Other revenue consists of fees received for transferring regulatory credits earned for participating in low carbon fuel programs in approved states, charging related fees received from drivers using charging sites owned and operated by ChargePoint, net transaction fees earned for processing payments collected on driver charging sessions at charging sites owned by its customers, and other professional services.
Other Other revenue consists of charging related fees received from drivers using charging sites owned and operated by ChargePoint, net transaction fees earned for processing payments collected on driver charging sessions at charging sites owned by its customers, fees received for transferring regulatory incentives earned for participating in low carbon fuel programs in some states, and other professional services.
Deferred tax assets and liabilities reflect the estimated future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those 56 Table of Content temporary differences are expected to be recovered or settled. Deferred tax expense or benefit is the result of changes in the deferred tax asset and liability.
Long-Term Liquidity Requirements Until ChargePoint can generate sufficient revenue to cover its cost of sales, operating expenses, working capital and capital expenditures, it expects to primarily fund cash needs through a combination of equity and debt financing. If ChargePoint raises funds by issuing equity securities or debt securities convertible into equity securities, dilution to stockholders may result.
Long-Term Liquidity Requirements ChargePoint has incurred net losses and negative cash flows from operations since inception. Until ChargePoint can generate sufficient revenue to cover its cost of sales, operating expenses, working capital and capital expenditures, it expects to primarily fund cash needs through a combination of equity and debt financing.
In addition, macroeconomic factors, including governmental mandates and incentives, could impact demand for EVs, particularly since they can be more expensive than traditional gasoline-powered vehicles and the automotive industry globally has been experiencing a recent decline in sales.
In addition, macroeconomic factors, including governmental mandates and incentives and the impact of rising interest rates, inflation and a potential economic recession, could impact demand for EVs, particularly since they can be more expensive to purchase than traditional gasoline-powered vehicles.
In the future, ChargePoint may enter into arrangements to acquire or invest in complementary businesses, products and technologies. ChargePoint may be required to seek additional equity or debt financing. If ChargePoint requires additional financing, it may not be able to raise such financing on acceptable terms or at all.
In the future, ChargePoint may enter into arrangements to acquire or invest in complementary businesses, products and technologies. ChargePoint may be required to seek additional equity or debt financing beyond the amounts available to it pursuant to the ATM Facility.
Recent Developments Closing of Merger On February 26, 2021 (the “Closing Date”), Switchback Energy Acquisition Corporation (“Switchback”), consummated the previously announced transactions pursuant to which Lightning Merger Sub Inc., a wholly owned subsidiary of Switchback incorporated in the State of Delaware (“Merger Sub”), merged with ChargePoint, Inc., a Delaware corporation (“Legacy ChargePoint”); Legacy ChargePoint survived as a wholly-owned subsidiary of Switchback (the “Merger” and, collectively with the other transactions described in the Merger Agreement, dated as of September 23, 2020, by and among Switchback, Merger Sub and Legacy ChargePoint, the “Merger Agreement”, and such transactions the “Reverse Recapitalization”).
(“Legacy ChargePoint”) pursuant to a Merger Agreement and Plan of Merger dated as of September 23, 2020, by and among the Company, Lightning Merger Sub, and Switchback (“Merger Agreement”). Legacy ChargePoint survived as a wholly-owned subsidiary of Switchback (“Merger” and, collectively with the other transactions described in the Merger Agreement, the “Reverse Recapitalization”).
For the Year Ended January 31, Change 2022 2021 2020 2022 vs 2021 2021 vs 2020 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) Interest expense $ (1,502) $ (3,253) $ (3,544) $ 1,751 (53.8) % $ 291 (8.2) % Percentage of total revenue (0.6) % (2.2) % (2.5) % Interest expense decreased during the fiscal year ended January 31, 2022 compared to the same period in 2021 primarily due to repayment of ChargePoint’s 2018 term loan facility (the “2018 Loan”) in March 2021.
For the Year Ended January 31, Change 2023 2022 2021 2023 vs 2022 2022 vs 2021 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) Interest expense $ (9,434) $ (1,502) $ (3,253) $ (7,932) 528.1 % $ 1,751 (53.8) % Percentage of total revenue (2.0) % (0.6) % (2.2) % Interest expense increased during the fiscal year ended January 31, 2023 compared to fiscal year ended January 31, 2022 primarily due to interest expense on the 2027 Convertible Notes.
This network provides multiple web-based portals for charging system owners, fleet managers, drivers and utilities. ChargePoint generates revenue primarily through the sale of Networked Charging Systems, a Cloud Services subscription and an extended parts and labor warranty subscription (“Assure”), each of which is typically paid for upfront. Assure also includes proactive monitoring, fast response times, expert advice and robust reporting.
This network provides multiple web-based portals for charging system owners, fleet managers, drivers and utilities. ChargePoint generates revenue primarily through the sale of Networked Charging Systems, Cloud Services and extended parts and labor warranties (“Assure”).
If the market for EVs does not develop as expected or if there is any slow-down or delay in overall EV adoption or manufacturing rates, ChargePoint’s financial condition and results of operations would be negatively impacted and such impact may be material.
If the market for EVs does not develop as expected or if there is any slow-down or delay in overall EV adoption or manufacturing rates, ChargePoint’s financial condition and results of operations could be materially and adversely impacted. Competition ChargePoint is currently a market leader in North America in commercial Level 2 Alternating Current (“AC”) charging.
If these programs are modified, reduced or eliminated, ChargePoint’s ability to generate this revenue in the future would be adversely impacted. 43 Table of Contents Supply chain disruptions and COVID-19 In March 2020, the World Health Organization characterized COVID-19 as a pandemic.
If these programs are modified, reduced or eliminated, ChargePoint’s ability to generate this revenue in the future would be adversely impacted. Supply Chain Disruptions and Other Factors Global supply chain disruptions, initially caused by the COVID-19 pandemic, continue to affect ChargePoint’s business.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeForeign Currency Risk ChargePoint has foreign currency risks related to its revenue and operating expenses denominated in currencies other than the U.S. dollar, primarily the euro, causing both its revenue and its operating results to be impacted by fluctuations in the exchange rates. 56 Table of Contents Gains or losses from the revaluation of certain cash balances, accounts receivable balances and intercompany balances that are denominated in these currencies impact ChargePoint’s net loss.
Biggest changeForeign Currency Risk ChargePoint has foreign currency risks related to its revenue and operating expenses denominated in currencies other than the U.S. dollar, primarily the euro, causing both its revenue and its operating results to be impacted by fluctuations in the exchange rates.
ChargePoint’s investment policy is focused on the preservation of capital and supporting its liquidity needs. Under the policy, ChargePoint invests in highly rated securities, issued by the U.S. government or liquid money market funds. ChargePoint does not invest in financial instruments for trading or speculative purposes, nor does it use leveraged financial instruments.
ChargePoint’s investment policy is focused on the preservation of capital and supporting its liquidity needs. Under the policy, ChargePoint invests in highly rated securities, issued by the U.S. government, and short durations or liquid money market funds. ChargePoint does not invest in financial instruments for trading or speculative purposes, nor does it use leveraged financial instruments.
At this time, ChargePoint does not enter into financial instruments to hedge its foreign currency exchange risk, but it may in the future. 57 Table of Contents
At this time, ChargePoint does not enter into financial instruments to hedge its foreign currency exchange risk, but it may in the future. 57 Table of Content
ChargePoint utilizes external investment managers who adhere to the guidelines of its investment policy. A hypothetical 10% change in interest rates would not have a material impact on the value of ChargePoint’s cash and cash equivalents.
ChargePoint utilizes external investment managers who adhere to the guidelines of its investment policy. A hypothetical 10% change in interest rates would not have a material impact on the value of ChargePoint’s cash, cash equivalents and short-term investments.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk ChargePoint is exposed to market risk for changes in interest rates. ChargePoint had cash, cash equivalents and restricted cash totaling $315.6 million as of January 31, 2022. Cash equivalents were invested primarily in money market funds.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk ChargePoint is exposed to market risk for changes in interest rates. ChargePoint had cash, cash equivalents and restricted cash totaling $294.6 million and short-term investments of $105.0 million as of January 31, 2023. Cash equivalents were invested primarily in money market funds.
A hypothetical decrease in all foreign currencies against the U.S. dollar of 10% would not result in a material foreign currency loss on foreign-denominated balances, as of January 31, 2022. As ChargePoint’s foreign operations expand, its results may be more materially impacted by fluctuations in the exchange rates of the currencies in which it does business.
A hypothetical decrease in all foreign currencies against the U.S. dollar of 10% would not result in a material foreign currency loss on foreign-denominated balances, as of January 31, 2023. There was no material change in ChargePoint’s foreign currency risk during fiscal year ended January 31, 2023 compared to fiscal year ended January 31, 2022.
Added
There was no material change in ChargePoint’s interest rate risk during fiscal year ended January 31, 2023 compared to fiscal year ended January 31, 2022.
Added
As ChargePoint’s foreign operations expand, its results may be more materially impacted by fluctuations in the exchange rates of the currencies in which it does business. Gains or losses from the revaluation of certain cash balances, accounts receivable balances and intercompany balances that are denominated in these currencies can impact ChargePoint’s net loss.

Other CHPT 10-K year-over-year comparisons