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What changed in ChargePoint Holdings, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of ChargePoint Holdings, Inc.'s 2023 and 2024 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 2024 report.

+528 added−466 removedSource: 10-K (2024-04-01) vs 10-K (2023-04-03)

Top changes in ChargePoint Holdings, Inc.'s 2024 10-K

528 paragraphs added · 466 removed · 348 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

68 edited+39 added−24 removed71 unchanged
Biggest changeOthers in the EV charging landscape consist principally of (i) manufacturers of non-networked hardware charging systems, such as ABB Ltd. and Tritium DCFC Ltd, (ii) software providers that offer solutions to access and manage such non-networked hardware charging systems, (iii) CPOs that acquire access to sites and leverage third-party hardware and software to build out charging infrastructure to sell energy, such as EVgo, Inc. and Electrify America, and (iv) e-mobility service and software providers, or eMSPs, that focus on enabling EV drivers to access third-party charging systems.
Biggest changeCompetition While ChargePoint believes that its capital-light business model and comprehensive offering of hardware and software solutions provides a distinct competitive advantage, ChargePoint has competitors in different sectors of the market, including: (i) manufacturers of non-networked hardware charging systems, such as Tesla, Inc., ABB Ltd., Siemens AG, Alpitronics GmbH Srl, Kempower Oyj, and Alfen N.V., (ii) software providers that offer solutions to access and manage non-networked hardware charging systems, such as Driivz Ltd., EV Connect, Inc., and Monta ApS and (iii) CPOs or auto OEMs that acquire access to sites and leverage first or third-party hardware and software to build out charging infrastructure to sell energy, such as EVgo, Inc., Electrify America, Blink Charging Co. and Tesla, Inc.
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 its portfolio breadth and range of hardware and 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’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.
ChargePoint’s research and development teams are primarily located in the Company’s headquarters in Campbell, California, its facilities in Gurgaon and Bangalore, India, and its European locations in Radstadt, Austria, Amsterdam, Netherlands and Reading, the United Kingdom.
And most importantly, ChargePoint’s networked hardware is designed for high uptime, monitored and managed through our Cloud application, and supported via our customer support organization and a large network of service partners. These attributes and mobile and in-dash applications create a charging network that encourages hosts and drivers to expand with ChargePoint.
And most importantly, ChargePoint’s networked hardware is designed for high uptime, monitored and managed through its Cloud application, and supported via its customer support organization and a large network of service partners. These attributes and mobile and in-dash applications create a charging network that encourages hosts and drivers to expand with ChargePoint.
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.
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 or to employees during the day and open to the public at night.
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 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.
The CPRA also creates a new state agency vested with authority to implement and enforce the CCPA and the CPRA. This new agency, known as the California Privacy Protection Agency (“CPPA”) is authorized to implement regulations, and has drafted broad and new privacy requirements in this role.
The CPRA also created a new state agency vested with authority to implement and enforce the CCPA and the CPRA. This agency, known as the California Privacy Protection Agency (“CPPA”) is authorized to implement regulations, and has drafted broad and new privacy requirements in this role.
ChargePoint accesses the fleet market via its direct sales force and a curated set of channel partners. • Residential : ChargePoint offers residential EV charging solutions for drivers in single-family residences who want the convenience of fueling at home with the ability to optimize energy costs and full integration with the same mobile application they use for charging away from home.
ChargePoint accesses the fleet market via its direct sales force and channel partners. • Residential : ChargePoint offers residential EV charging solutions for drivers in single-family residences who want the convenience of fueling at home with the ability to optimize energy costs and full integration with the same mobile application they use for charging away from home.
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.
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 2047, excluding any additional term for patent term adjustments.
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.
ChargePoint accesses the commercial market via its direct sales force (inside and field teams) and channel partners. 7 Table of Content • Fleet : Fleet customers are public and private organizations that operate vehicle fleets in delivery/logistics, sales/service/motor pool shared transit and ride-sharing service operators.
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 offers both an upfront sale of the charging station hardware with separate subscriptions for 5 Table of Content 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 .
The CCPA requires covered companies to provide new disclosures to California consumers (as that word is broadly defined in the CCPA), and new ways for such consumers to opt-out of certain sales of personal information, and to allow for a new cause of action for data breaches.
The CCPA requires covered companies to provide new disclosures to California consumers (as that word is broadly defined in the CCPA), and new ways for such consumers to opt-out of 11 Table of Content certain sales of personal information, and to allow for a new cause of action for data breaches.
All ChargePoint commercial ports are integrated into one network available to drivers who can use the ChargePoint mobile application to find charging locations, check availability, start sessions, pay for charging, use their ChargePoint account to roam across networks, access preferential pricing and loyalty offers and track the estimated avoidance of CO2 emissions in comparison to the use of liquid fuel. • Parts and Labor Warranty Subscriptions and Customer Support Foster Loyalty .
All ChargePoint commercial ports are integrated into one network available to drivers who can use the ChargePoint mobile application to find charging locations, check availability, start sessions, set up reservations for a charging station, pay for charging, use their ChargePoint account to roam across networks, access preferential pricing and loyalty offers and track the estimated avoidance of CO2 emissions in comparison to the use of liquid fuel. • Parts and Labor Warranty Subscriptions and Customer Support Foster Loyalty .
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.
CERCLA also authorizes the Environmental 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.
In short, our customers want to choose the most cost-effective solutions for their vehicle charging applications, which can be AC or DC only or a blend, based on their specific needs.
In short, ChargePoint believes customers want to choose the most cost-effective solutions for their vehicle charging applications, which can be AC or DC only or a blend, based on their specific needs.
Energy management can be integrated with support for building load management and integration with utility load management programs. ▪ Driver management tools : enabling convenience features including specific user access via the ChargePoint connections system, the creation of driver groups to support a site host policy and the waitlist feature for drivers to reserve a place in line, among other features. ▪ Integration with route planning systems for fleets : enabling on-budget deadline scheduling in accordance with energy rate structures and on-site energy storage.
Energy management can be integrated with support for building load management and integration with utility load management programs. 6 Table of Content ▪ Driver management tools : enabling convenience features including specific user access via the ChargePoint connections system, the creation of driver groups to support a site host policy and waitlist or reservation features for drivers to reserve a place in line, among other features. ▪ Integration with route planning systems for fleets : enabling on-budget deadline scheduling in accordance with energy rate structures and on-site energy storage.
Both the CPF50 and ChargePoint Home Flex are UL® and ENERGY STAR® certified with standard SAE J1772 AC charging ports making them safe, reliable, and energy efficient. ◦ DC Solutions : ▪ ChargePoint’s family of Express and Express Plus fast charging DC solutions are configurable and extensible solutions intended to serve high-powered charging applications necessary for interstate corridor, fueling and convenience applications.
Both the CPF50 and ChargePoint Home Flex are UL® and ENERGY STAR® certified with standard SAE J1772 or SAE J3400 AC charging ports making them safe, reliable, and energy efficient. ◦ DC Solutions : ▪ ChargePoint’s family of Express and Express Plus fast charging DC solutions are configurable and extensible solutions intended to serve high-powered charging applications necessary for fleet, interstate corridor, fueling, convenience and other fast charge applications.
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.
For example, Virginia enacted the Virginia Consumer Data Protection Act (“CDPA”), which became effective on January 1, 2023, the Colorado Privacy Act (“CPA”) which became effective on July 1, 2023; the Utah Consumer Privacy Act (“UCPA”) which became effective December 1, 2023; and the Connecticut Data Privacy Act, which became effective on July 1, 2023.
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.
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,” deploys its capital to purchase, install and manage the charging stations, owns and operates the charging station and depends upon profits on the sale of electricity for its return on capital deployed.
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.
Go to Market Strategy ChargePoint sells networked charging solutions in North America and Europe, and as of January 31, 2024, its customer base includes 74% of the 2023 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.
ChargePoint believes the quality of the ChargePoint experience generates driver satisfaction and therefore encourages customers to purchase additional networked chargers and Cloud Services, creating a virtuous cycle of growth from customers expanding their charging capacity.
ChargePoint believes the quality of the ChargePoint experience generates driver satisfaction and therefore encourages customers to purchase additional networked chargers and Cloud Services, creating a virtuous cycle of growth from customers expanding their charging capacity. • Network Operations Center Improves Driver Experience .
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.
ChargePoint supports all leading connector types and 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.
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.
Growth Strategies ChargePoint estimates it had approximately a 54% market share in publicly available networked AC charging in North America as of January 31, 2024. ChargePoint began European operations in late 2017 and currently operates in 18 European countries. It expects significant market opportunities for fleet solutions as fleet EVs begin to arrive in more meaningful volume.
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.
Historically, ChargePoint has not sold 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.
In addition, ChargePoint intends to expand its product offerings beyond its historical model of a site host or customer owning and operating charging as a capital expenditure.
In addition, ChargePoint intends to expand its product offerings beyond its historical model of a site host or customer owning and operating charging as a capital expenditure. • Invest in expanding ChargePoint’s customer base .
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.
The GDPR has increased ChargePoint’s responsibility and potential liability 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.
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.
As of January 31, 2024, ChargePoint has activated approximately 286,000 ports on its network, including approximately 24,000 direct current, or “DC,” “fast charging” ports, excluding single family home ports. ChargePoint’s roaming integrations enable EV drivers to access more than 631,000 additional third-party ports in North America and Europe through ChargePoint’s mobile and in-dash applications.
ChargePoint 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.
As primarily a non-asset owner, ChargePoint does not compete directly with CPOs. 8 Table of Content ChargePoint 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; • 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.
These factors in turn drive the selection of charging solutions, since ChargePoint estimates that DC ports are 10 times or more expensive than AC ports to purchase and install, and significantly more expensive to operate due to the higher charging rate.
These factors in turn drive the selection of charging solutions, since DC ports are significantly more expensive than AC ports to purchase, install and operate due to the higher charging rate.
For example, as an early entrant in the EV charging industry, ChargePoint has seen a correlation between new passenger EV sales in North America and its charging port growth in North America, which gives ChargePoint confidence in its growth prospects going forward as its verticals and geographic markets continue to go electric.
ChargePoint has historically seen a correlation between new passenger EV sales in North America and its charging port growth in North America, which gives ChargePoint confidence in its growth prospects going forward as its verticals and geographic markets continue to go electric.
Europe In Europe, ChargePoint primarily competes with smaller providers of EV charging solutions. The market in Europe is highly fragmented in terms of both providers and solutions, with many companies providing hardware only or software only, and few providing both.
Europe The market in Europe is highly fragmented in terms of both providers and solutions, with many companies providing hardware only or software only, and few providing both.
Cloud Services capabilities include the functionality below. ▪ Station and site host management : making charging accessible to the public or select users, simplifying management of multiple charging sites and their parking policies, enabling sub-hosts, delivery of analytics, utilization reporting, remote diagnosis and updates with the latest software features. ▪ Host pricing and payment remittance capabilities : enabling site hosts or station owners to set pricing, including support for pricing scenarios (e.g., by driver group, time of day, idle status, energy dispensed, by session).
These requirements include best-in-class data security, dedicated cloud hosting for federal customers, and rigorous standards for authorization, access, and continuous monitoring. • Cloud Services capabilities include the functionality below: ▪ Station and site host management : making charging accessible to the public or select users, simplifying management of multiple charging sites and their parking policies, enabling sub-hosts, delivery of analytics, utilization reporting, remote diagnosis and updates with the latest software features. ▪ Host pricing and payment remittance capabilities : enabling site hosts or station owners to set pricing, including support for pricing scenarios (e.g., by driver group, time of day, idle status, energy dispensed, by session).
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.
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.
That supply management team readies factories for new products, puts in place and monitors quality control points, plans ongoing production, issues purchase orders and coordinates deliveries to distribution hubs that ChargePoint manages in North America and Europe.
ChargePoint deploys a global supply chain management team that works proactively with piece part and final assembly supply partners. That supply management team readies factories for new products, puts in place and monitors quality control points, plans ongoing production, issues purchase orders and coordinates deliveries to distribution hubs that ChargePoint manages in North America and Europe.
The CP6000 family of charging stations feature dual SAE J1772 AC charging ports, is UL® and ENERGY STAR® certified as well as compliant with the ISO 15118 communication standard and can deliver up to 19.2kW per port. ▪ ChargePoint’s CT4000 family of charging stations is UL® and ENERGY STAR® certified.
The CP6000 family of charging stations are UL® and ENERGY STAR® certified as well as compliant with the ISO 15118 communication standard and can deliver up to 19.2kW per port.
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.
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.
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.
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. These products are available to commercial and fleet customers as software-only or a combination of software, hardware, and extended parts and labor warranty solutions.
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.
In addition, as of January 31, 2024, there were three pending Patent Cooperation Treaty applications. These patents relate to various EV charging station designs and/or EV charging functionality.
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.
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 pay these maintenance fees, its ability to protect its intellectual property or prevent others from infringing its proprietary rights may be impaired.
ChargePoint is in the process of seeking additional certifications on products in Germany and in the United States. Field testing to validate meter accuracy may also be carried out by various government entities responsible for ensuring the accuracy of transactions based on measured quantities, similar to the way gasoline pumps or grocery store scales are audited.
Field testing to validate meter accuracy may also be carried out by various government entities responsible for ensuring the accuracy of transactions based on measured quantities, similar to the way gasoline pumps or grocery store scales are audited. 10 Table of Content Privacy and Data Security Laws ChargePoint is currently subject, and may in the future be subject, to numerous privacy and data security laws.
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.
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, 13 Table of Content disability, sex, sexual orientation, or gender identity.
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.
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.
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.
Additionally, ChargePoint is governed by a California state privacy law called the California Consumer Privacy Act of 2018, (“CCPA”), as amended by the California Privacy Rights Act in 2020 (“CPRA”), which contains requirements similar to the GDPR for the handling of personal information of California residents.
Finally, ChargePoint believes its go-to-market strategy of ensuring site owners or CPOs have full control over branding, access, pricing and policies, enables them to provide their employees and customers a better charging experience. ChargePoint’s networked charging solutions can charge most types of EVs—from cars, trucks and delivery vehicles to buses and 18-wheelers—regardless of manufacturer.
Finally, ChargePoint believes its go-to-market strategy of ensuring site owners or CPOs have full control over branding, access, pricing and policies enables them to provide their employees and customers with a better charging experience.
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 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 also has a strong market position in AC chargers for use at home or multifamily settings and high-power DC chargers for fleet applications, urban fast charging, corridor or long-trip charging.
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.
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.
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.
ChargePoint believes EV charging will principally transition from an inconvenient, dedicated fueling 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.
ChargePoint believes its ports under management and roaming relationships support one of the largest and growing networks of EV charging infrastructures available. Charging ports are easily located via ChargePoint’s mobile and in-dash applications, and ChargePoint’s networked hardware is easy to use through those applications and to manage via its Cloud services provided to hosts.
Charging ports are easily located via ChargePoint’s mobile and in-dash applications, and ChargePoint’s networked hardware is easy to use through those applications and to manage via its Cloud Services provided to hosts.
ChargePoint has developed a comprehensive platform of AC and DC charging products, Cloud subscriptions, Assure warranty coverages and professional services designed to ensure it can cost effectively deliver the solutions that best meet the customer’s specific requirements. 5 Table of Content ChargePoint’s comprehensive portfolio is vital because its customers’ requirements vary by use case.
ChargePoint has developed a comprehensive platform of AC and DC charging products, Cloud subscriptions, Assure warranty coverages and professional services designed to ensure it can cost effectively deliver the solutions that best meet the customer’s specific requirements. From a network effect perspective, ChargePoint’s goals are ubiquity, accessibility, usability and reliability.
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 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. 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.
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.
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 • Accelerate Cloud Service solutions for all use cases .
ChargePoint also offers customer support around-the-clock and in multiple languages. ChargePoint accesses this residential aspect via marketing and direct and channel partners. Because ChargePoint rarely owns and operates charging infrastructure, it is able to allocate capital strategically towards ChargePoint’s initiatives in research and development, marketing and sales and public policy. • Research and Development .
Because ChargePoint rarely owns and operates charging infrastructure, it is able to allocate capital strategically towards ChargePoint’s initiatives in research and development, marketing and sales and public policy. • Research and Development .
Residential charging solutions include the capability to manage grid load in conjunction with utility programs and EV fueling rate programs. ChargePoint accesses single-family residential opportunities through direct marketing to the consumer using proprietary and third-party e-commerce platforms. For apartments and condominium settings, ChargePoint offers landlords and owner associations the ability to offer charging billed directly to the tenant.
Residential charging solutions include the capability to manage grid load in conjunction with utility programs and EV fueling rate programs. ChargePoint accesses single-family residential opportunities through direct marketing to the consumer using proprietary and third-party e-commerce platforms, as well as through partnerships with utilities, original equipment manufacturers (“OEMs”), car dealerships and insurance companies.
ChargePoint strives to become the employer of choice within its industry, facilitating the transition to electric mobility by placing its talent at the heart of its success.
Human Capital Resources As of January 31, 2024, ChargePoint had approximately 1,650 worldwide employees. ChargePoint’s talent is the foundation of its success. ChargePoint strives to become the employer of choice within its industry, facilitating the transition to electric mobility by placing its talent at the heart of its success.
Research and Development ChargePoint has invested significant time and expense into research and development for its networked charging platform technologies and for its Cloud software. ChargePoint’s ability to maintain its leadership position depends upon its ongoing research and development activities. ChargePoint’s research and development team is responsible for designing, developing, manufacturing, testing and sustaining its products.
ChargePoint has invested significant time and expenses into research and development for its networked charging platform technologies and for its Cloud software. ChargePoint’s ability to maintain and expand its leadership position in the EV charging market depends upon successfully maintaining and expanding its research and development activities.
ChargePoint’s Express and Express Plus fast charging DC solutions are compatible with global charging connector standards including CCS1, CCS2 and CHAdeMO connector types as well as ISO communication standards.
ChargePoint’s Express and Express Plus fast-charging DC solutions are compatible with global charging connector standards including CCS1, CCS2, SAE J3400 and CHAdeMO connector types and ISO communication standards. ChargePoint’s Express products can dispense up to 62.5kW per port and up to 500kW per port depending on configuration with Express Plus.
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.
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 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.
All CT4000 models offer one or two standard SAE J1772 AC charging ports with locking holsters, capable of delivering up to 7.2kW per port.
All CT4000 models offer one or two standard SAE J1772 AC charging ports with locking holsters, capable of delivering up to 7.2kW per port. ▪ ChargePoint’s AC solutions further includes the CPF50 family of charging station designed for use in fleet and multi-family applications and the ChargePoint Home Flex designed for fast, flexible home charging.
On-site and on-route charging are supported and fueling payment is facilitated by integration with leading fuel cards. ChargePoint believes that as EV penetration rises, so does the importance of Cloud Services to help manage charging complexity.
ChargePoint believes that as EV penetration rises, so does the importance of Cloud Services to help manage charging complexity.
This creates legal uncertainty with respect to federal law as well as the impact such laws will have on state statutes.
The United States federal government is also considering legislation governing privacy and security issues, including the possibility of private rights of action. This creates legal uncertainty with respect to federal law as well as the impact such laws will have on state statutes.
The CCPA includes a framework with potentially severe statutory damages and private rights of action.
The CCPA establishes a privacy framework for covered businesses, including an expansive definition of personal information and data privacy rights for California residents. The CCPA includes a framework with potentially severe statutory damages and private rights of action.
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.
Beginning in 2024, ChargePoint added a pantograph connector option for its family of Express Plus fast chargers designed specifically for bus fleet operations. • 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.
The majority of its hardware products are manufactured in Mexico. Components are sourced from a number of global suppliers, with concentrations in the United States and Asia. ChargePoint deploys a global supply chain management team that works proactively with piece part and final assembly supply partners.
Manufacturing, Logistics and Fulfillment ChargePoint has historically designed its products in-house and outsourced production to contract manufacturers based in the United States, Mexico, Asia and Europe. The majority of its hardware products are manufactured in Mexico. Components are sourced from a number of global suppliers, with concentrations in the United States and Asia.
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.
These state laws are similar to the CCPA and CPRA, but aspects of these state privacy statutes remain unclear, resulting in further legal uncertainty. Several states have also passed similar privacy laws that will become effective in 2024 or later, including Delaware, Indiana, Iowa, Montana, New Jersey, Oregon, Tennessee and Texas.
ChargePoint is also subject to the e-Privacy Directive and the EU member states’ additions to and implementation of that directive. The e-Privacy Directive’s provisions include requirements concerning the use of cookies and other tracking technologies and the use of personal information in marketing, including requirements for consents to marketing emails and opt-outs.
ChargePoint is also subject to the e-Privacy Directive and the EU member states’ additions to and implementation of the e-Privacy Directive.
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.
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. As of January 2024, ChargePoint received Federal Risk and Authorization Management Program (“FedRAMP”) authorization. All ChargePoint Cloud Services products are FedRAMP-authorized and meet all FedRAMP requirements.
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.
While ChargePoint’s primary business model does not include owning and operating networked charging stations, ChargePoint does face competition from EV charging providers that also operate as CPOs, such as Blink Charging Co. and Tesla, Inc.
With this standard connector, ChargePoint’s CT 4000 charging stations can charge almost any EV model in North America. ▪ ChargePoint’s AC solutions further includes the CPF50 family of charging station designed for use in fleet and multi-family applications and the ChargePoint Home Flex designed for fast, flexible home charging.
With standard connector options for SAE J1772 and, in 2024 SAE J3400, ChargePoint’s CP6000 charging stations can charge almost any EV model in North America. ▪ ChargePoint’s CT4000 family of charging stations is UL® and ENERGY STAR® certified.
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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”).
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ChargePoint’s networked charging solutions can charge most types of EVs—from cars, trucks and delivery vehicles to buses and 18-wheelers—regardless of manufacturer or connector type, most recently adding SAE J3400, formerly known as the North American Charging Standard or NACS, connector options to both commercial and home chargers.
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ChargePoint believes its distinct business model, breadth of offerings and increasing scale are also supported by significant positive trends in the industry.
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Passenger vehicles spend 95% of their time parked, and most fleet vehicles also have substantial “dwell time.” This driver behavior is the impetus behind ChargePoint’s deployment of AC chargers (for longer dwell-time sessions) in addition to DC fast charging ports (for shorter dwell-time sessions).
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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.
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Charging infrastructure should be broadly distributed, easily found, easy to use and should always work. ChargePoint believes its ports under management and roaming relationships support one of the largest and growing networks of EV charging infrastructures available.
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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).
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Retailers can optimize charging station locations and pricing for foot traffic and loyalty. Employers and multi-family commercial real estate operators can make fueling an efficient benefit to attract talent or tenants.
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Additional factors propelling this shift to vehicle electrification include existing and proposed fossil fuel bans or restrictions, transit electrification mandates and utility and government incentive programs.
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On-site and on-route charging are supported and fueling payment is facilitated by integration with leading fuel cards. ▪ Cloud Service solutions for all use cases : enabling CPOs to choose ChargePoint’s Cloud Services while selecting their choice of third-party hardware or e-mobility services providers (“eMSPs”) to build and integrate their solutions with ChargePoint’s Cloud Services, provides an extensible solution to any CPO or eMSP.
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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.
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ChargePoint’s software platform enables charging station owners, CPOs and eMSPs to manage costs, optimize fleet operations, integrate loyalty programs and manage payments, all while empowering seamless integrations with customer workflows, fuel and fleet cards providers, payment processors, utilities, energy services and more.

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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 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.
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. • 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 has expanded 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 may experience a disruption of its business activities due to senior executive transitions. • ChargePoint’s future revenue growth will depend in significant part on its ability to increase sales of its products and services to fleet operators. • 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 “2028 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 has entered into a 2027 Revolving Credit Facility that imposes certain restrictions on its business and operations that may affect its ability to operate its business and make payments on its indebtedness. • 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. • 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. • 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. • 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. • 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 and purchasers of ChargePoint’s Common Stock could incur substantial losses. 15 Table of Content • ChargePoint’s future growth and success is highly 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 reduction, modification, or elimination of such benefits could cause reduced demand for EVs and EV charging stations, which would adversely affect ChargePoint’s financial results. • 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, and has previously identified, material weaknesses in its internal control over financial reporting.
The reduction, modification, or elimination of such benefits could cause reduced demand for EVs and EV charging stations, which would adversely affect ChargePoint’s financial results. • 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 previously identified material weaknesses in its internal control over financial reporting.
Further, the United States has imposed extraordinary tariffs and extensive export controls targeted primarily at the semiconductor industry in China. If China retaliates to such measures or there is a conflict between China and Taiwan, which is a leading producer of semiconductors, there could be further disruption to the semiconductor industry and global supply chains.
The United States has imposed extraordinary tariffs and extensive export controls targeted primarily at the semiconductor industry in China. If China retaliates to such measures or there is a conflict between China and Taiwan, which is a leading producer of semiconductors, there could be further disruption to the semiconductor industry and global supply chains.
ChargePoint may also incur additional costs or require additional resources to monitor, report and comply with such stakeholder expectations and standards and legislation, and to meet climate change targets and commitments if established.
ChargePoint may also incur additional costs or require additional resources to monitor, report and comply with such stakeholder expectations, standards and legislation, and to meet climate change targets and commitments if established.
Accordingly, the effect of significant downturns in sales and market acceptance of subscription services, and potential changes in pricing policies or rate of renewals, may not be fully apparent until future periods. Financial, Tax and Accounting-Related Risks ChargePoint has identified, and has previously identified, material weaknesses in its internal control over financial reporting.
Accordingly, the effect of significant downturns in sales and market acceptance of subscription services, and potential changes in pricing policies or rate of renewals, may not be fully apparent until future periods. Financial, Tax and Accounting-Related Risks ChargePoint has previously identified material weaknesses in its internal control over financial reporting.
Changes include, but are not limited to, a permanent reduction to the corporate income tax rate, limiting interest deductions, a reduction to the maximum deduction allowed for net operating losses generated in tax years after December 31, 2017, the elimination of carrybacks of net operating losses, adopting elements of a territorial tax system, assessing a repatriation tax or “toll-charge” on undistributed earnings and profits of U.S.-owned foreign corporations, and introducing certain anti-base erosion provisions, including a new minimum tax on global intangible low-taxed income and base erosion and anti-abuse tax.
Changes include, but are not limited to, a reduction to the corporate income tax rate, limiting interest deductions, a reduction to the maximum deduction allowed for net operating losses generated in tax years after December 31, 2017, the elimination of carrybacks of net operating losses, adopting elements of a territorial tax system, assessing a repatriation tax or “toll-charge” on undistributed earnings and profits of U.S.-owned foreign corporations, and introducing certain anti-base erosion provisions, including a new minimum tax on global intangible low-taxed income and base erosion and anti-abuse tax.
For example, the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting recently entered into force among the jurisdictions that have ratified it, although the United States has not yet entered into this convention. These recent changes could negatively impact ChargePoint’s taxation, especially as ChargePoint expands its relationships and operations internationally.
For example, the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting has entered into force among the jurisdictions that have ratified it, although the United States has not yet entered into this convention. These recent changes could negatively impact ChargePoint’s taxation, especially as ChargePoint expands its relationships and operations internationally.
If ChargePoint’s channel partners choose to place greater emphasis on products of their own or those offered by ChargePoint’s competitors or a result of an acquisition, competitive factors or for other reasons do not continue to market and sell ChargePoint’s solutions in an effective manner or at all, ChargePoint’s ability to grow its business and sell its solutions may be adversely affected.
If ChargePoint’s channel partners choose to place greater emphasis on products of their own or those offered by ChargePoint’s competitors or as a result of an acquisition, competitive factors or for other reasons do not continue to market and sell ChargePoint’s solutions in an effective manner or at all, ChargePoint’s ability to grow its business and sell its products may be adversely affected.
ChargePoint plans to continue to expand its direct sales force both domestically and internationally but it may not be able to recruit and hire a sufficient number of sales personnel, which may adversely affect its ability to expand its sales capabilities. New hires require significant training and time before they achieve full productivity, particularly in new sales territories.
ChargePoint plans to continue to expand its direct sales force both domestically and internationally but it may not be able to recruit, hire and retain a sufficient number of sales personnel, which may adversely affect its ability to expand its sales capabilities. New hires require significant training and time before they achieve full productivity, particularly in new sales territories.
The measures ChargePoint takes to protect its technology intellectual property from unauthorized use by others may not be effective for various reasons, including the following: • any patent applications ChargePoint submits may not result in the issuance of patents; • the scope of issued patents may not be broad enough to protect its inventions and proprietary rights; • any issued patents may be challenged by competitors and/or invalidated by courts or governmental authorities; • ChargePoint may not be the first inventor of the subject matter to which it has filed a particular patent application, and it may not be the first party to file such a patent application; • Patents have a finite term, and competitors and other third-parties may offer identical or similar products after the expiration of ChargePoint’s patents that cover such products; • the costs associated with enforcing patents, confidentiality and invention agreements or other intellectual property rights may make aggressive enforcement impracticable; • current and future competitors may circumvent patents or independently develop similar trade secrets or works of authorship, such as software; • know-how and other proprietary information ChargePoint purports to hold as a trade secret may not qualify as a trade secret under applicable laws; • ChargePoint’s employees, contractors or business partners may breach their confidentiality, non-disclosure, and non-use obligations; and • proprietary designs and technology embodied in ChargePoint’s products may be discoverable by third-parties through means that do not constitute violations of applicable laws.
The measures ChargePoint takes to protect its technology and intellectual property from unauthorized use by others may not be effective for various reasons, including the following: • any patent applications ChargePoint submits may not result in the issuance of patents; • the scope of issued patents may not be broad enough to protect its inventions and proprietary rights; • any issued patents may be challenged by competitors and/or invalidated by courts or governmental authorities; • ChargePoint may not be the first inventor of the subject matter to which it has filed a particular patent application, and it may not be the first party to file such a patent application; • Patents have a finite term, and competitors and other third-parties may offer identical or similar products after the expiration of ChargePoint’s patents that cover such products; • the costs associated with enforcing patents, confidentiality and invention agreements or other intellectual property rights may make aggressive enforcement impracticable; • current and future competitors may circumvent patents or independently develop similar trade secrets or works of authorship, such as software; 30 Table of Content • know-how and other proprietary information ChargePoint purports to hold as a trade secret may not qualify as a trade secret under applicable laws; • ChargePoint’s employees, contractors or business partners may breach their confidentiality, non-disclosure, and non-use obligations; and • proprietary designs and technology embodied in ChargePoint’s products may be discoverable by third-parties through means that do not constitute violations of applicable laws.
ChargePoint has incurred and could incur additional costs to rectify those or new issues, and the existence of these issues could adversely affect its reputation or investor perceptions. In addition, as a public company, ChargePoint maintains director and officer liability insurance, for which it must pay substantial premiums.
ChargePoint has incurred costs and could incur additional costs to rectify new issues, and the existence of these issues could adversely affect its reputation or investor perceptions. In addition, as a public company, ChargePoint maintains director and officer liability insurance, for which it must pay substantial premiums.
On or after January 1, 2027, holders of the 2027 Convertible Notes will have the right to convert all or a portion of their 2027 Convertible Notes at any time prior to close of business on the second scheduled trading day immediately preceding the maturity date.
On or after January 1, 2027, holders of the 2028 Convertible Notes will have the right to convert all or a portion of their 2028 Convertible Notes at any time prior to close of business on the second scheduled trading day immediately preceding the maturity date.
If ChargePoint fails to adapt to changing market conditions or continue to compete successfully with current charging providers or new competitors, its growth will be limited which would adversely affect its business and results of operations.
If ChargePoint fails to adapt to changing market conditions or continue to compete successfully with current charging providers or new competitors, its growth and revenue will be limited which would adversely affect its business and results of operations.
Any defects or errors in product or services offerings, or the perception of such defects or errors, or other performance problems could result in any of the following, each of which could adversely affect ChargePoint’s business and results of its operations: • expenditure of significant financial and product development resources, including recalls, in efforts to analyze, correct, eliminate or work around errors or defects; • loss of existing or potential customers or partners; • interruptions or delays in sales; • delayed or lost revenue; • delay or failure to attain market acceptance; • delay in the development or release of new functionality or improvements; • negative publicity and reputational harm; • sales credits or refunds; • exposure of confidential or proprietary information; • diversion of development and customer service resources; • breach of warranty claims; • legal claims under applicable laws, rules and regulations; and • an increase in collection cycles for accounts receivable or the expense and risk of litigation.
Any defects or errors in product or services offerings, or the perception of such defects or errors, or other performance problems could result in any of the following, each of which could adversely affect ChargePoint’s business and results of its operations: • expenditure of significant financial and product development resources, including recalls, in efforts to analyze, correct, eliminate or work around errors or defects; • loss of existing or potential customers or partners; • interruptions or delays in sales; • delayed or lost revenue; • delay or failure to attain market acceptance; • delay in the development or release of new functionality or improvements; • negative publicity and reputational harm; 32 Table of Content • sales credits or refunds; • exposure of confidential or proprietary information; • diversion of development and customer service resources; • breach of warranty claims; • legal claims under applicable laws, rules and regulations; and • an increase in collection cycles for accounts receivable or the expense and risk of litigation.
In addition, under Accounting Standards Update 2020-06, Debt--Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging--Contracts in Entity’s Own Equity (Subtopic 815-40), diluted earnings per share is generally calculated assuming that all the 2027 Convertible Notes were converted solely into shares of Common Stock at the beginning of the reporting period, unless the result would be anti-dilutive.
In addition, under Accounting Standards Update 2020-06, Debt--Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging--Contracts in Entity’s Own Equity (Subtopic 815-40), diluted earnings per share is generally calculated assuming that all the 2028 Convertible Notes were converted solely into shares of Common Stock at the beginning of the reporting period, unless the result would be anti-dilutive.
Prior to the close of business on the business day immediately preceding January 1, 2027, the 2027 Convertible Notes will be convertible subject to the satisfaction of certain conditions set forth in the indenture for such 2027 Convertible Notes.
Prior to the close of business on the business day immediately preceding January 1, 2027, the 2028 Convertible Notes will be convertible subject to the satisfaction of certain conditions set forth in the indenture for such 2028 Convertible Notes.
Thus, ChargePoint’s business could be adversely affected if one or more of its suppliers is impacted by any interruption at a particular location. As the demand for EV charging increases, ChargePoint’s suppliers and manufacturers may not be able to dedicate sufficient supply chain, production or sales channel capacity to keep up with the required pace of charging infrastructure expansion.
Thus, ChargePoint’s business could be adversely affected if one or more of its suppliers is impacted by any interruption at a particular location. If the demand for EV charging increases, ChargePoint’s suppliers and contract manufacturers may not be able to dedicate sufficient supply chain, production or sales channel capacity to keep up with the required pace of charging infrastructure expansion.
If ChargePoint is unable to generate sufficient cash flow to pay the principal and/or interest on its indebtedness, ChargePoint’s flexibility in how it pays interest on the 2027 Convertible Notes may be limited and it may be required to adopt one or more alternatives, such as selling assets, restructuring debt, or obtaining additional equity capital on terms that may be onerous or highly dilutive, to pay its outstanding indebtedness.
If ChargePoint is unable to generate sufficient cash flow to pay the principal and/or interest on its indebtedness, ChargePoint’s flexibility in how it pays interest on the 2028 Convertible Notes may be limited and it may be required to adopt one or more alternatives, such as selling assets, restructuring debt, or obtaining additional equity capital on terms that may be onerous or highly dilutive, to pay its outstanding indebtedness.
In the event of a fundamental change or a change in control transaction (each such term as defined in the indenture governing the 2027 Convertible Notes), holders of the 2027 Convertible Notes will have the right to require ChargePoint to repurchase all or a portion of their 2027 Convertible Notes at a price equal to 100% of the capitalized principal amount of 2027 Convertible Notes, in the case of a fundamental change, or 125% of the capitalized principal amount of 2027 Convertible Notes, in the case of a change in control transaction, in each case plus any accrued and unpaid interest to, but excluding, the repurchase date.
In the event of a fundamental change or a change in control transaction (each such term as defined in the indenture governing the 2028 Convertible Notes), holders of the 2028 Convertible Notes will have the right to require ChargePoint to repurchase all or a portion of their 2028 Convertible Notes at a price equal to 100% of the capitalized principal amount of 2028 Convertible Notes, in the case of a fundamental change, or 125% of the capitalized principal amount of 2028 Convertible Notes, in the case of a change in control transaction, in each case plus any accrued and unpaid interest to, but excluding, the repurchase date.
This feature of the 2027 Convertible Notes could have the effect of delaying or preventing a change of control of ChargePoint, whether or not it is desired by, or beneficial to, ChargePoint’s stockholders, and may result in the acquisition of ChargePoint on terms less favorable to its stockholders than it would otherwise be, or could require ChargePoint to pay a portion of the consideration available in such a transaction to holders of the 2027 Convertible Notes.
This feature of the 2028 Convertible Notes could have the effect of delaying or preventing a change of control of ChargePoint, whether or not it is desired by, or beneficial to, ChargePoint’s stockholders, and may result in the acquisition of ChargePoint on terms less favorable to its stockholders than it would otherwise be, or could require ChargePoint to pay a portion of the consideration available in such a transaction to holders of the 2028 Convertible Notes.
In addition, the Inflation Reduction Act of 2022 signed into law on August 16, 2022 includes numerous incentives and tax credits aimed at reducing the effects of climate change, such as the extension of EV charging infrastructure tax credits under Section 30C and tax credits for EVs under Section 30D of the Internal Revenue Code of 1986, as amended (the “Code”) through 2032.
In addition, the Inflation Reduction Act of 2022 (the “IRA”) signed into law on August 16, 2022 includes numerous incentives and tax credits aimed at reducing the effects of climate change, such as the extension and increase of the EV charging infrastructure tax credits under Section 30C and tax credits for EVs under Section 30D of the Internal Revenue Code of 1986, as amended (the “Code”) through 2032.
In addition, building codes, accessibility requirements or regulations may hinder EV charger installation because they end up costing the developer or installer more in order to meet the code requirements. Meaningful delays or cost overruns may impact ChargePoint’s recognition of revenue in certain cases and/or impact customer relationships, either of which could impact ChargePoint’s business and profitability.
In addition, building codes, accessibility requirements or regulations may hinder EV charger installation because they end up costing the developer or installer more in order to meet the code requirements. Meaningful construction or permitting delays or cost overruns may impact ChargePoint’s recognition of revenue in certain cases and/or impact customer relationships, either of which could impact ChargePoint’s business and profitability.
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.
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; • challenges posed by an environment of diverse cultures, 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.
The application of this “if-converted” method may reduce ChargePoint’s reported diluted earnings per share. Furthermore, if any of the conditions to the convertibility of the 2027 Convertible Notes is satisfied, then ChargePoint may be required under applicable accounting standards to reclassify the liability carrying value of the 2027 Convertible Notes as a current, rather than a long-term, liability.
The application of this “if-converted” method may reduce ChargePoint’s reported diluted earnings per share. Furthermore, if any of the conditions to the convertibility of the 2028 Convertible Notes is satisfied, then ChargePoint may be required under applicable accounting standards to reclassify the liability carrying value of the 2028 Convertible Notes as a current, rather than a long-term, liability.
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.
In addition, the Charter and A&R Bylaws provide that, unless ChargePoint consents in writing to another 45 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.
Any such action could result in significant costs and diversion of ChargePoint’s resources and management’s attention, and there can be no assurance that ChargePoint will be successful in any such action. Furthermore, many of ChargePoint’s current and potential competitors have the ability to dedicate substantially greater resources to enforce their intellectual property rights than ChargePoint does.
Any such action could result in significant costs and diversion of ChargePoint’s resources and management’s attention, and there can be no assurance that ChargePoint will be successful in any such action. Furthermore, ChargePoint’s current and potential competitors may have the ability to dedicate substantially greater resources to enforce their intellectual property rights than ChargePoint does.
However, ChargePoint may not have enough available cash, or be able to obtain sufficient financing, at the time it is required to pay cash with respect to the 2027 Convertible Notes being converted. The conditional conversion feature of the 2027 Convertible Notes, when triggered, may adversely affect ChargePoint’s financial condition and operating results.
However, ChargePoint may not have enough available cash, or be able to obtain sufficient financing, at the time it is required to pay cash with respect to the 2028 Convertible Notes being converted. The conditional conversion feature of the 2028 Convertible Notes, when triggered, may adversely affect ChargePoint’s financial condition and operating results.
Risks Related to Ownership of ChargePoint’s Securities 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 conversions of 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.
Risks Related to Ownership of ChargePoint’s Securities 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 conversions of the 2028 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.
Sales of substantial amounts of ChargePoint Common Stock (including any shares issued upon the conversion of the 2027 Convertible Notes or pursuant to the ATM Facility, the Shelf Registration Statement, or in connection with an acquisition), or the perception that such sales could occur, may adversely affect prevailing market prices of ChargePoint Common Stock.
Sales of substantial amounts of ChargePoint Common Stock (including any shares issued upon the conversion of the 2028 Convertible Notes or pursuant to the ATM Facility, the Shelf Registration Statement, or in connection with an acquisition), or the perception that such sales could occur, may adversely affect prevailing market prices of ChargePoint Common Stock.
This reclassification could be required even if no noteholders convert their 2027 Convertible Notes and could materially reduce ChargePoint’s reported working capital. The coverage of ChargePoint’s business or its securities by securities or industry analysts or the absence thereof could adversely affect the trading price and volume of ChargePoint’s Common Stock and other securities.
This reclassification could be required even if no noteholders convert their 2028 Convertible Notes and could materially reduce ChargePoint’s reported working capital. The coverage of ChargePoint’s business or its securities by securities or industry analysts or the absence thereof could adversely affect the trading price and volume of ChargePoint’s Common Stock and other securities.
Sales 16 Table of Content and marketing expenses represent a significant percentage of ChargePoint’s total revenue, and its operating results will suffer if sales and marketing expenditures do not contribute significantly to increasing revenue. ChargePoint is substantially dependent on its channel partners and direct sales force to obtain new customers.
Sales 19 Table of Content and marketing expenses represent a significant percentage of ChargePoint’s total revenue, and its operating results will suffer if sales and marketing expenditures do not contribute significantly to increasing revenue. ChargePoint is substantially dependent on its channel partners and direct sales force to obtain new customers.
Finally, new or changing state or federal regulations may result in delays related to the development of new products or modifications to existing products in order to come into compliance and any such delays may result in customer’s selecting alternative providers or result in delays related to ChargePoint’s ability to install, sell or distribute its charging station technology.
Finally, new or changing state or federal regulations or industry standards may result in delays related to the development of new products or modifications to existing products in order to come into compliance and any such delays may result in customer’s selecting alternative providers or result in delays related to ChargePoint’s ability to install, sell or distribute its charging station technology.
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.
Accordingly, ChargePoint may be subject to or affected by a number of federal, state, local and international laws and regulations, as 38 Table of Content 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.
ChargePoint may not have sufficient cash flow from its business to pay its outstanding debt, and ChargePoint may not have the ability to raise the funds necessary to settle conversions of the 2027 Convertible Notes in cash or to repurchase the 2027 Convertible Notes upon a fundamental change, which could adversely affect its business and results of operations.
ChargePoint may not have sufficient cash flow from its business to pay its outstanding debt, and ChargePoint may not have the ability to raise the funds necessary to settle conversions of the 2028 Convertible Notes in cash or to repurchase the 2028 Convertible Notes upon a fundamental change, which could adversely affect its business and results of operations.
In addition, changes in the ownership of its Common Stock during its fiscal year ended January 31, 2023 and future changes in ChargePoint’s stock ownership, which are outside of ChargePoint’s control, may trigger further ownership changes. Similar provisions of state tax law may also apply to limit ChargePoint’s use of accumulated state tax attributes.
In addition, changes in the ownership of its Common Stock during its fiscal year ended January 31, 2024 and future changes in ChargePoint’s stock ownership, which are outside of ChargePoint’s control, may trigger further ownership changes. Similar provisions of state tax law may also apply to limit ChargePoint’s use of accumulated state tax attributes.
The 2027 Convertible Notes may decrease ChargePoint’s business flexibility and access to capital, require a significant amount of cash to service, dilute the ownership interest of existing stockholders and otherwise depress the price of its Common Stock, and delay or hinder an otherwise beneficial takeover of the Company.
The 2028 Convertible Notes may decrease ChargePoint’s business flexibility and access to capital, require a significant amount of cash to service, dilute the ownership interest of existing stockholders and otherwise depress the price of its Common Stock, and delay or hinder an otherwise beneficial takeover of the Company.
In addition, upon conversion of the 2027 Convertible Notes, unless ChargePoint elects to deliver solely shares of its Common Stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), ChargePoint will be required to make cash payments in respect of the 2027 Convertible Notes being converted.
In addition, upon conversion of the 2028 Convertible Notes, unless ChargePoint elects to deliver solely shares of its Common Stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), ChargePoint will be required to make cash payments in respect of the 2028 Convertible Notes being converted.
Warrants are exercisable for ChargePoint’s Common Stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to ChargePoint’s stockholders. As of January 31, 2023, the warrants to purchase Legacy ChargePoint common stock (the “Legacy Warrants”) were exercisable for 34,499,436 shares of Common Stock.
Warrants are exercisable for ChargePoint’s Common Stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to ChargePoint’s stockholders. As of January 31, 2024, the warrants to purchase Legacy ChargePoint common stock (the “Legacy Warrants”) were exercisable for 34,499,436 shares of Common Stock.
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.
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.
In addition, the indenture includes customary terms and covenants, including certain events of default after which the holders may accelerate the maturity of the 2027 Convertible Notes and declare 100% of the principal of, and accrued and unpaid interest, if any, on, the 2027 Convertible Notes to become due and payable immediately.
In addition, the indenture includes customary terms and covenants, including certain events of default after which the holders may accelerate the maturity of the 2028 Convertible Notes and declare 100% of the principal of, and accrued and unpaid interest, if any, on, the 2028 Convertible Notes to become due and payable immediately.
ChargePoint expects that, under applicable accounting principles, the initial liability carrying amount of the 2027 Convertible Notes will be the fair value of a similar debt instrument that does not have a conversion feature, valued using its cost of capital for straight, unconvertible debt.
ChargePoint expects that, under applicable accounting principles, the initial liability carrying amount of the Original Convertible Notes will be the fair value of a similar debt instrument that does not have a conversion feature, valued using its cost of capital for straight, unconvertible debt.
As a result of this amortization, the interest expense to be recognized for the 2027 Convertible Notes for accounting purposes will be greater than the cash interest payments ChargePoint may pay on the 2027 Convertible Notes, were it to elect to pay interest in cash, which results in lower reported net income.
As a result of this amortization, the interest expense to be recognized for the 2028 Convertible Notes for accounting purposes will be greater than the cash interest payments ChargePoint may pay on the 2028 Convertible Notes, were it to elect to pay interest in cash, which results in lower reported net income.
In addition, the conversion of some or all of the 2027 Convertible Notes will dilute the ownership interests of existing stockholders to the extent ChargePoint delivers shares of Common Stock upon such conversion. Any sales in the public market of ChargePoint Common Stock issuable upon such conversion could adversely affect prevailing market prices of ChargePoint Common Stock.
In addition, the conversion of some or all of the 2028 Convertible Notes will dilute the ownership interests of existing stockholders to the extent ChargePoint delivers shares of Common Stock upon such conversion. Any sales in the public market of ChargePoint Common Stock issuable upon such conversion could adversely affect prevailing market prices of ChargePoint Common Stock.
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.
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 for similar litigation or other claims.
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, while ChargePoint has not yet experienced a direct impact to its supply chain due to the conflict between Russia and Ukraine or conflicts in the Middle East, 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.
Because ChargePoint does not have a long history of operating at its present scale and it has significant expansion plans, ChargePoint’s effective tax rate may fluctuate in the future. Future effective tax rates could be affected by operating losses in 32 Table of Content jurisdictions where no tax benefit can be recorded under U.S. generally accepted accounting principles (“U.S.
Because ChargePoint does not have a long history of operating at its present scale and it has significant expansion plans, ChargePoint’s effective tax rate may fluctuate in the future. Future effective tax rates could be affected by operating losses in jurisdictions where no tax benefit can be recorded under U.S. generally accepted accounting principles (“U.S.
The accounting method for reflecting the 2027 Convertible Notes on ChargePoint’s balance sheet, accruing interest expense for the 2027 Convertible Notes, and reflecting the underlying shares of its Common Stock in ChargePoint’s reported diluted earnings per share may adversely affect its reported earnings and financial condition.
The accounting method for reflecting the 2028 Convertible Notes on ChargePoint’s balance sheet, accruing interest expense for the 2028 Convertible Notes, and reflecting the underlying shares of its Common Stock in ChargePoint’s reported diluted earnings per share may adversely affect its reported earnings and financial condition.
ChargePoint has reflected the difference between the net proceeds from the sale of the 2027 Convertible Notes and the initial carrying amount as a debt discount for accounting purposes, which is amortized into interest expense over the term of the 2027 Convertible Notes.
ChargePoint has reflected the difference between the net proceeds from the sale of the Original Convertible Notes and the initial carrying amount as a debt discount for accounting purposes, which is amortized into interest expense over the term of the Original Convertible Notes.
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’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.
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.
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.
The indenture for the 2027 Convertible Notes includes a restrictive covenant that, subject to specified exceptions, limits the ability of ChargePoint and its subsidiaries to incur secured debt in excess of $750.0 million.
The indenture for the 2028 Convertible Notes includes a restrictive covenant that, subject to specified exceptions, limits the ability of ChargePoint and its subsidiaries to incur secured debt in excess of $750.0 million.
In addition, any such conversion of the 2027 Convertible Notes will dilute the ownership interest of existing stockholders, including holders who had previously converted their 2027 Convertible Notes, or may otherwise depress ChargePoint’s stock price.
In addition, any such conversion of the 2028 Convertible Notes will dilute the ownership interest of existing stockholders, including holders who had previously converted their 2028 Convertible Notes, or may otherwise depress ChargePoint’s stock price.
ChargePoint or the suppliers it 17 Table of Content procures components from may be unable to manufacture products at prices ChargePoint’s customers would accept, or at all. Any inability to pass on future increased costs to customers would put downward pressure on ChargePoint’s gross margins and adversely affect ChargePoint’s business, results of operations and financial condition.
ChargePoint or the suppliers it procures components from may be unable to manufacture products at prices ChargePoint’s customers would accept, or at all. Any inability to pass on future increased costs to customers would put downward pressure on ChargePoint’s gross margins and adversely affect ChargePoint’s business, results of operations and financial condition.
Anti-Bribery Act of 2020 (the “Anti-Bribery Act”); • conforming products to various international regulatory and safety requirements as well as charging and other electric infrastructures; • difficulty in establishing, staffing and managing foreign operations; • difficulties in collecting payments in foreign currencies and associated foreign currency exposure; • restrictions on repatriation of earnings; • compliance with potentially conflicting and changing laws of taxing jurisdictions and compliance with applicable U.S. tax laws as they relate to international operations, the complexity and adverse consequences of such tax laws, and potentially adverse tax consequences due to changes in such tax laws; and • regional economic and political conditions, including the outbreak of war or other hostilities.
Anti-Bribery Act of 2020 (the “Anti-Bribery Act”); • conforming products to various international regulatory and safety requirements as well as charging and other electric infrastructures; • difficulty in establishing, staffing and managing foreign operations, including the formation or organization of any works council; • difficulties in collecting payments in foreign currencies and associated foreign currency exposure; • restrictions on repatriation of earnings; • compliance with potentially conflicting and changing laws of taxing jurisdictions and compliance with applicable U.S. tax laws as they relate to international operations, the complexity and adverse consequences of such tax laws, and potentially adverse tax consequences due to changes in such tax laws; and • regional economic and political conditions, including the outbreak of war or other hostilities.
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.
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.
As a result of the ownership changes, approximately $17.1 million of Federal net operating loss carryforwards, $17.9 million of California net operating loss carryforwards, and $4.7 million of federal tax 33 Table of Content credits were determined to have expired unutilized for income tax purposes. ChargePoint’s net operating losses or credits may also be impaired under state law.
As a result of the ownership changes, approximately $17.1 million of Federal net operating loss carryforwards, $17.9 million of California net operating loss carryforwards, and $4.7 million of federal tax credits were determined to have expired unutilized for income tax purposes. ChargePoint’s net operating losses or credits may also be impaired under state law.
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.
These laws may require ChargePoint or others in ChargePoint’s supply and operations chains to obtain permits and comply with procedures that impose various restrictions and obligations that may have material effects on ChargePoint’s operations.
The Tax Act included a reduction to the maximum deduction allowed for net operating losses generated in tax years after December 31, 2017 and the elimination of carrybacks of net operating losses. It is possible that ChargePoint will not generate taxable income in time to utilize these net operating loss carryforwards.
The Tax Act included a reduction to the maximum 37 Table of Content deduction allowed for net operating losses generated in tax years after December 31, 2017 and the elimination of carrybacks of net operating losses. It is possible that ChargePoint will not generate taxable income in time to utilize these net operating loss carryforwards.
For instance, such epidemics may cause local, regional or national governments to implement measures to contain pandemic risks, such as travel restrictions, quarantines, shelter in place order or business shutdowns.
For instance, such epidemics may cause local, regional or national governments to implement measures to contain pandemic risks, such as travel restrictions, quarantines, shelter in place orders or business shutdowns.
Cyber security organizations in many countries have published warnings of increased cybersecurity threats to U.S. businesses, and external events, like the conflict between Russia and Ukraine, may increase the likelihood of cybersecurity attacks, particularly directed at energy, fueling or infrastructure service providers.
Cyber security organizations in many countries have published warnings of increased cybersecurity threats to U.S. businesses, and external events, like the conflict between Russia and Ukraine or conflicts in the Middle East, may increase the likelihood of cybersecurity attacks, particularly directed at energy, fueling or infrastructure service providers.
ChargePoint may be subject to claims that charging stations have malfunctioned and persons were injured or purported to be injured. Any insurance that ChargePoint carries may not be sufficient or it may not apply to all situations.
ChargePoint may be subject to claims that charging stations have malfunctioned and persons or property were injured and harmed or purported to be injured and harmed. Any insurance that ChargePoint carries may not be sufficient or it may not apply to all situations.
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.
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 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 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.
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, 2024.
The accounting method for convertible debt securities that may be settled in cash, such as the 2027 Convertible Notes, could have a material effect on ChargePoint’s reported financial results.
The accounting method for convertible debt securities that may be settled in cash, such as the 2028 Convertible Notes, could have a material effect on ChargePoint’s reported financial results.
ChargePoint’s acquisitions or investments may not ultimately strengthen its competitive position or achieve its goals and business strategy; ChargePoint may be subject to claims or liabilities assumed from an acquired company, product or technology; acquisitions or investments ChargePoint completes could be viewed negatively by its customers, investors and securities analysts; and ChargePoint may incur costs and expenses necessary to address an acquired company’s failure to comply with laws and governmental rules and regulations.
ChargePoint’s acquisitions or investments may not ultimately strengthen its competitive position or achieve its goals and business strategy; ChargePoint may be subject to claims or liabilities assumed from an acquired company, product or technology; acquisitions or 26 Table of Content investments ChargePoint completes could be viewed negatively by its customers, investors and securities analysts; and ChargePoint may incur costs and expenses necessary to address an acquired company’s failure to comply with laws and governmental rules and regulations.
The management team may not successfully or effectively continue the management of a public company that is subject to significant regulatory oversight and reporting obligations under federal securities laws, particularly in light of the Securities and Exchange Commission’s (“SEC”) increasing focus on former shell companies.
The management team may not be successfully or effectively conduct the management of a public company that is subject to significant regulatory oversight and reporting obligations under federal securities laws, particularly in light of the Securities and Exchange Commission’s (“SEC”) increasing focus on former shell companies.
Once any such conditional conversion feature of the 2027 Convertible Notes is triggered, holders of the 2027 Convertible Notes will be entitled to convert their 2027 Convertible Notes at any time during the specified periods at their option.
Once any such conditional conversion feature of the 2028 Convertible Notes is triggered, holders of the 2028 Convertible Notes will be entitled to convert their 2028 Convertible Notes at any time during the specified periods at their option.
ChargePoint’s failure to establish such sustainability targets or targets that are perceived to be appropriate, as well as to achieve progress on those targets on a timely basis, or at all, could adversely affect the reputation of its brand and sales of and demand for its products.
ChargePoint’s failure to establish such sustainability targets or targets 27 Table of Content that are perceived to be appropriate, as well as to achieve progress on those targets on a timely basis, or at all, could adversely affect the reputation of its brand and sales of and demand for its products.
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.
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; • significant commercial disputes, litigation or threats of litigation with key commercial partners, investors or stockholders; • 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, conflicts in the Middle East and increased trade restrictions by governmental and private entities.
The lower reported income (or higher net loss) resulting from this accounting treatment could depress the trading price of ChargePoint’s Common Stock and the 2027 Convertible Notes.
The lower reported income (or higher net loss) resulting from this accounting treatment could depress the trading price of ChargePoint’s Common Stock and the 2028 Convertible Notes.
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.
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.
If ChargePoint is unable to identify sufficient partners and contractors to satisfy its customers’ installation needs, specifically electricians and construction partners 18 Table of Content with sufficient skill and expertise installing charging stations, it may delay deployment projects or cause its customers to delay making an investment or commitment to purchase charging stations, which may adversely affect ChargePoint’s business.
If ChargePoint is unable to identify sufficient partners and contractors to satisfy its customers’ installation needs, specifically electricians and construction partners with sufficient skill and expertise installing charging stations, it may delay deployment projects or cause its customers to delay making an investment or commitment to purchase charging stations, which may adversely affect ChargePoint’s business.
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).
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).
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 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.
ChargePoint may not have adequate personnel with the appropriate level 20 Table of Content of knowledge, experience and training in the accounting policies, practices or internal control over financial reporting required of public companies.
ChargePoint may not have adequate personnel with the appropriate level of knowledge, experience and training in the accounting policies, practices or internal control over financial reporting required of public companies.
If one or more holders elect to convert their 2027 Convertible Notes, unless ChargePoint elects to satisfy its conversion obligation by delivering solely shares of its Common Stock (other 39 Table of Content than paying cash in lieu of delivering any fractional share), ChargePoint would be required to settle a portion or all of its conversion obligation in cash, which could adversely affect its liquidity.
If one or more holders elect to convert their 2028 Convertible Notes, unless ChargePoint elects to satisfy its conversion obligation by delivering solely shares of its Common Stock (other than paying cash in lieu of delivering any fractional share), ChargePoint would be required to settle a portion or all of its conversion obligation in cash, which could adversely affect its liquidity.
Risks Related to the EV Market 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. ChargePoint’s future growth is highly dependent upon the adoption of EVs by businesses and consumers.
Risks Related to the EV Market ChargePoint’s future growth and success is highly dependent upon the continuing rapid adoption of EVs for passenger and fleet applications. ChargePoint’s future growth is highly dependent upon the adoption of EVs by businesses and consumers.
The market for EVs could be affected by numerous factors, such as: • 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; • competition, including from other types of alternative fuel vehicles, plug-in hybrid electric vehicles and high fuel-economy internal combustion engine vehicles; • volatility in the cost of oil and gasoline, including as a result of trade restrictions; • concerns regarding the reliability and stability of the electrical grid; • the change in an EV battery’s ability to hold a charge over time; • the availability and reliability of a national electric vehicle charging network or infrastructure; • availability of maintenance and repair services for EVs; • consumers’ perception about the convenience and cost of charging EVs; • increases in fuel efficiency of non-electric vehicles; • government regulations and economic incentives, including adverse changes in, or expiration of, favorable tax incentives related to EVs, EV charging stations or decarbonization generally; • relaxation of government mandates or quotas regarding the sale of EVs; and • concerns about the future viability of EV manufacturers.
The market for EVs could be affected by numerous factors, such as: • perceptions about EV features, quality, safety, performance and cost; • EV auto manufacturers delay or eliminate plans to migrate their manufacturing production to be solely or primarily EV; • perceptions about the limited range over which EVs may be driven on a single battery charge; • competition, including from other types of alternative fuel vehicles, plug-in hybrid electric vehicles and high fuel-economy internal combustion engine vehicles; • volatility in the cost of oil and gasoline, including as a result of trade restrictions; • concerns regarding the scalability, availability, reliability and stability of the electrical grid; • the change in an EV battery’s ability to hold a charge over time; • the availability and reliability of a national electric vehicle charging network or infrastructure; • availability of maintenance and repair services for EVs; • consumers’ perception about the convenience and cost of charging EVs; • increases in fuel efficiency of non-electric vehicles; • government regulations and economic incentives, including adverse changes in, or expiration of, favorable tax incentives related to EVs, EV charging stations or decarbonization generally; • relaxation or elimination of government mandates or quotas regarding the sale of EVs; and • concerns about the future viability of EV manufacturers.
As a public company, ChargePoint is required to provide management’s attestation on internal controls pursuant to Section 404 of Sarbanes-Oxley. The standards required for a public company under Section 404(a) and Section 404(b) of Sarbanes-Oxley are significantly more stringent than those previously required of ChargePoint as a privately-held company.
ChargePoint is required to provide management’s attestation on internal controls pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) The standards required for a public company under Section 404(a) and Section 404(b) of Sarbanes-Oxley are significantly more stringent than those previously required of ChargePoint as a privately-held company.
In the event ChargePoint is subject to litigation, penalties, or enforcement actions pursuant to the GDPR, CCPA, CPRA or applicable state laws, ChargePoint may be subject to fines and penalties, remediation measures which will divert management’s time and attention, as well as harm to its reputation.
In the event ChargePoint is subject to litigation, penalties, or enforcement actions pursuant to the GDPR, UK GDPR, CCPA, the FTC or other applicable state laws, ChargePoint may be subject to fines and penalties, remediation measures which will divert management’s time and attention, as well as harm to its reputation.

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Item 2. Properties

Properties — owned and leased real estate

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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.
Biggest changeChargePoint also leases facilities in Amsterdam, the Netherlands; Gurgaon and Bangalore, India; Radstadt, Austria; Munich, Germany and Reading, United Kingdom; 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 on August 31, 2029.
Item 2. Properties. The corporate headquarters and principal operations is located in Campbell, California, and consists of approximately 62,000 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 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.
Biggest changeItem 3. Legal Proceedings. Information with respect to this item may be found in Note 7, 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.
Mine Safety Disclosures. Not applicable. 42 Table of Content PART II
Mine Safety Disclosures. Not applicable. 48 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 changeThe 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.
Biggest changeCompany/Index September 16, 2019 January 31, 2020 January 31, 2021 January 31, 2022 January 31, 2023 January 31, 2024 ChargePoint Holdings, Inc. $ 100.00 $ 102.46 $ 389.96 $ 141.91 $ 124.39 $ 19.47 S&P Midcap 400 $ 100.00 $ 107.46 $ 127.30 $ 145.19 $ 148.59 $ 155.68 S&P Application Software $ 100.00 $ 117.05 $ 154.77 $ 174.16 $ 137.81 $ 211.37 S&P 500 Technology Hardware, Storage & Peripherals $ 100.00 $ 137.68 $ 230.27 $ 307.62 $ 269.95 $ 345.54 Item 6. [Reserved.] Not applicable.
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.
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 19, 2024, there were approximately 338 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, 2023.
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, 2024. 49 Table of Content The stock price performance included in this graph is not necessarily indicative of future price performance.

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 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 $6.8 million decrease in professional services fees related to acquisitions and expenses associated with an underwritten secondary offering of shares held by certain selling stockholders and other expense decreases.
Biggest changeFor the fiscal year ending January 31, 2025, ChargePoint expects its general and administrative expenses to decrease as a percentage of revenue as it continues to optimize its operations. 56 Table of Content For the Year Ended January 31, Change 2024 2023 2022 2024 vs 2023 2023 vs 2022 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) General and administrative expenses $ 109,102 $ 90,366 $ 81,380 $ 18,736 20.7 % $ 8,986 11.0 % Percentage of total revenue 21.5 % 19.3 % 33.8 % General and administrative expenses increased during the fiscal year ended January 31, 2024 compared to fiscal year ended January 31, 2023 primarily due to an increase of $10.9 million in restructuring expense for facility and other contract terminations related to the reorganizations implemented by the Company (see Note 14, Restructuring , in the notes to the consolidated financial statements included in this Annual Report for more details), a $2.9 million increase in compensation related expenses due to headcount growth and employee-related exit costs related to the aforementioned reorganization, a $3.7 million increase in stock-based compensation expense due to new hires and to promote long-term retention of employees, and a $1.2 million increase in other operating expenses.
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.
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, reliability and cost of charging EVs; and increases in fuel efficiency of internal combustion engine vehicles.
Net Cash Provided By (Used In) Investing Activities During the year ended January 31, 2023, net cash used in investing activities was $126.2 million consisting of cash paid for purchases of short-term investments of $284.8 million, purchases of property and equipment of $18.6 million, and additional cash paid for acquisitions (net of cash acquired) related to the acquisition of HTB in the prior year of $2.8 million, partially offset by cash received from maturities of short-term investments of $180.0 million.
During the year ended January 31, 2023, net cash used in investing activities was $126.2 million consisting of cash paid for purchases of short-term investments of $284.8 million, purchases of property and equipment of $18.6 million, and additional cash paid for acquisitions (net of cash acquired) related to the acquisition of HTB in the prior year of $2.8 million, partially offset by cash received from maturities of short-term investments of $180.0 million.
Fleet Expansion ChargePoint’s future growth is also highly dependent upon success in fleet applications, where there is increasing competition, a high customer dependency on the expected increase in the arrival rate of new vehicles, and likely high concentrations and volatility of purchasing as fleet operators ultimately choose their key providers and make large purchases of EVs.
Fleet Expansion ChargePoint’s future growth is also highly dependent upon its success in EV fleet applications, where there is increasing competition, a high customer dependency on the expected increase in the arrival rate of new vehicles, and likely high concentrations and volatility of purchasing as fleet operators ultimately choose their key providers and make large purchases of EVs.
The capital markets have in the past, and may in the future, experience periods of higher volatility that could impact the availability and cost of equity and debt financing. ChargePoint’s principal use of cash in recent periods has been funding its operations, the acquisitions of ViriCiti and HTB, and investing in capital expenditures.
The capital markets have in the past, and may in the future, experience periods of higher volatility that could impact the availability and cost of equity and debt financing. ChargePoint’s principal use of cash in recent periods has been funding its operations, past acquisitions, and investing in capital expenditures.
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.
For RSUs, 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.
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.
Overview ChargePoint designs, develops and markets networked electric vehicle (“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.
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.
References to fiscal years 2024, 2023, and 2022, relate to the fiscal years ended January 31, 2024, January 31, 2023, and January 31, 2022, respectively. This section of this Form 10-K discusses fiscal year 2024 and 2023 items and year-to-year comparisons between fiscal year 2024 and 2023.
There are numerous restrictions and requirements associated with qualifying for the electric vehicle tax credits available under the IRA and ChargePoint is still assessing how the IRA may impact its business and EV sales generally. Further, incentives such as the Jobs Act and the IRA take time to be disbursed and to affect actual expenditure decisions.
There are numerous restrictions and requirements associated with qualifying for the electric vehicle tax credits available under the IRA and ChargePoint is still assessing how the IRA may 52 Table of Content impact its business and EV sales generally. Further, incentives such as the Jobs Act and the IRA take time to be disbursed and to affect actual expenditure decisions.
The terms of debt securities or borrowings could impose significant restrictions on ChargePoint’s operations and expose ChargePoint to enhanced risks associated with rising interest rates and elevated inflation experienced globally during fiscal year 2023.
The terms of debt securities or borrowings could impose significant restrictions on ChargePoint’s operations and expose ChargePoint to enhanced risks associated with rising interest rates and elevated inflation experienced globally during fiscal years 2023 and 2024.
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.
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 and the 2027 Revolving Credit Facility.
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.
Cost of revenue for the sale of Networked Charging Systems also consists of salaries and related personnel expenses, including stock-based compensation, warranty provisions, inventory obsolescence and write-downs, depreciation of manufacturing related equipment, and allocated facilities and information technology expenses. As revenue is recognized, ChargePoint accounts for estimated warranty cost as a charge to cost of revenue.
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.
Discussions of fiscal year 2022 items and year-over-year comparisons between fiscal year 2023 and fiscal year 2022 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 3, 2023.
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.
However, at least in the short term, as the product mix continues to vary and as ChargePoint continues to align inventory supply with demand and optimize for customer acquisition 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.
The non-cash charges consisted primarily of $93.4 million of stock-based compensation expense, $25.1 million of depreciation, and amortization expense and amortization of deferred contract acquisition costs, $4.7 million of non-cash operating lease costs and $16.8 million of other costs.
The non-cash charges consisted primarily of $93.4 million of stock-based compensation expense, $25.1 million of depreciation, and amortization expense,$4.7 million of non-cash operating lease costs and $16.8 million of other costs.
ChargePoint determines SSP based on observable standalone selling price when it is available, as well as other factors, including the price charged to its customers, its discounting practices and its overall pricing objectives, while maximizing observable inputs.
ChargePoint determines SSP based on observable standalone selling price when it is available, as well as other factors, including the price charged to its customers, its discounting practices and its overall pricing objectives, 61 Table of Content while maximizing observable inputs.
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.
To date, ChargePoint has funded its business and past acquisitions primarily with proceeds from the issuance of common stock, redeemable convertible preferred stock, proceeds from the Merger, proceeds from warrant and option exercises for cash, convertible debt and from customer payments.
Additionally, global economic uncertainty due to other macroeconomic conditions, including inflation, interest rate pressures, negative events in the financial services industry, and labor market disruptions, and related growing concerns of a potential recession, have impacted customer behavior related to discretionary spending and sentiment and could continue to impact such behaviors in the future.
Global economic uncertainty due to other macroeconomic conditions, including inflation, interest rate pressures, disruptions and credit constraints in the financial services industry, labor market disruptions, and related concerns of a potential recession, have impacted customer behavior related to discretionary spending and sentiment and could continue to impact such behaviors in the future.
The change in operating assets and liabilities was mainly driven by increases in accounts receivable of $94.6 million, inventory of $39.4 million, prepaid expenses and other assets of $38.0 million and operating lease liabilities of $5.0 million, offset by increases in deferred revenue of $51.8 million, accounts payable of $31.5 million and accrued and other liabilities of $29.4 million.
The change in operating assets and liabilities was mainly driven by increases in accounts receivable of $94.6 million, inventory of $39.4 million, and prepaid expenses and other assets of $38.0 million, offset by increases in deferred revenue of $51.8 million, accounts payable, operating lease liability, and accrued and other liabilities of $55.8 million.
Further, the continued disruption to ChargePoint’s supply chains and heightened component and shipping pricing and logistics expenses may further adversely impact ChargePoint’s gross margins, adversely affect demand for ChargePoint’s products, lengthen its product development and sales cycles, and reduce expected spending from new customers, all of which could adversely affect ChargePoint’s business, results of operations and financial condition.
Further, disruption to ChargePoint’s supply chains and heightened component and shipping pricing and logistics expenses, which ChargePoint experienced in 2021 and 2022, may further adversely impact ChargePoint’s gross margins, adversely affect demand for ChargePoint’s products, lengthen its product development and sales cycles, and reduce expected spending from new customers, all of which could adversely affect ChargePoint’s business, results of operations and financial condition.
Interest Expense Interest expense consists primarily of the interest on ChargePoint’s 2027 Convertible Notes that were issued in April 2022 which are described more completely below in Liquidity and Capital Resources .
Interest Expense Interest expense consists primarily of the interest on ChargePoint’s 2028 Convertible Notes that were issued in April 2022, and amended in October 2023, which are described more completely below in Liquidity and Capital Resources .
The 2027 Convertible Notes bear interest at 3.50% per annum, to the extent paid in cash (“Cash Interest”), which is payable semi-annually in arrears on April 1st and October 1st of each year or 5.00% per annum through the issuance of additional 2027 Convertible Notes (“PIK Interest”).
Prior to the 2027 Notes Amendment, the Original Convertible Notes bore interest at 3.50% per annum, to the extent paid in cash (“Cash Interest”), which was payable semi-annually in arrears on April 1st and October 1st of each year or 5.00% per annum through the issuance of additional Original Convertible Notes.
Net Cash Provided by Financing Activities During the year ended January 31, 2023, net cash provided by financing activities was $372.9 million, consisting of net proceeds from the issuance of convertible debt of $294.0 million, proceeds from the sale of common stock under the ATM Facility, net of commissions and fees, of $49.5 million, proceeds from the issuance of common stock under employee equity plans, net of tax withholdings, of $11.4 million, proceeds from the exercise of stock options and warrants of $6.9 million, and change in driver funds and amounts due to customers of $11.1 million.
During the year ended January 31, 2023, net cash provided by financing activities was $372.9 million, consisting of net proceeds from the issuance of convertible debt of $294.0 million, proceeds from the sale of common stock under the ATM Facility, net of commissions and fees, of $49.5 million, proceeds from the issuance of common stock under employee equity plans, net of tax withholdings, of $11.4 million, proceeds from the exercise of stock options and warrants of $6.9 million, and change in driver funds and amounts due to customers of $11.1 million. 60 Table of Content Contractual Obligations and Commitments ChargePoint’s material cash requirements include the following contractual obligations and commitments as of January 31, 2024.
ChargePoint may borrow funds on terms that may include restrictive covenants, including covenants that restrict the operation of its business, liens on assets, high effective interest rates and repayment provisions that reduce cash resources and limit future access to capital markets.
ChargePoint may borrow funds on terms that may include restrictive covenants, such as the restrictive covenants included in the 2027 Revolving Credit Facility, including covenants that restrict the operation of its business, liens on assets, high effective interest rates and repayment provisions that reduce cash resources and limit future access to capital markets.
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.
In addition, ChargePoint may accelerate its expenditures where it sees growth opportunities, which may negatively impact gross margin until upfront costs and inefficiencies are absorbed and normalized operations are achieved.
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.
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.
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.
Further, geopolitical factors, such as the ongoing conflict between Russia and Ukraine, conflicts in the Middle East, 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.
Residential includes single family homes and multifamily residences. On February 26, 2021 (“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 (“Lightning Merger Sub”), merged with ChargePoint, Inc.
On February 26, 2021 (“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 (“Lightning Merger Sub”), merged with ChargePoint, Inc.
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.
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 products and services, including in quality assurance, testing, product management, and allocated facilities and information technology expenses.
ChargePoint expects to opportunistically seek access to additional funds through public or private equity offerings or debt financings, including through potential sales of Common Stock under its ATM Facility. If ChargePoint raises funds by issuing equity securities or debt securities convertible into equity securities, dilution to stockholders may result.
ChargePoint may continue to opportunistically seek access to additional funds through public or private equity offerings or debt financings, including through potential sales of Common Stock under its ATM Facility and drawing down amounts under the 2027 Revolving Credit Facility. If ChargePoint raises funds by issuing equity securities or debt securities convertible into equity securities, dilution to stockholders may result.
The market for EVs is still rapidly evolving and although demand for EVs has grown in recent years, there is no guarantee of such future demand.
The market for EVs is still rapidly evolving and although demand for EVs has grown in recent years, the rate of EV sales is highly volatile and there is no guarantee of future demand for EV sales.
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.
ChargePoint offers a range of Networked Charging Systems products which vary widely in selling price and associated gross margin, as, for example, ChargePoint’s AC charger based commercial business contributes higher margins than its residential and DC charger based fleet businesses.
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.
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. After establishing the SSP, ChargePoint then allocates the transaction price using the relative selling price method.
Further, ChargePoint continues to invest in prioritizing an assurance of supply of its products and new customer acquisition as part of its “land and expand” model, which in the current environment, puts pressure on gross margins and increases operating expenses.
Further, ChargePoint has historically invested in prioritizing an assurance of supply of its products and new customer acquisition as part of its “land and expand” model, which puts pressure on gross margins and increases operating expenses.
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.
Revenue from driver charging sessions and charging transaction fees is recognized when the charging session or transaction is completed. 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.
Operating Lease Obligations ChargePoint has operating lease obligations for office spaces and data centers. As of January 31, 2023, ChargePoint had lease payment obligations of $32.8 million, with $6.7 million payable within twelve months. Purchase Commitments From time to time in the ordinary course of business, ChargePoint enters into agreements with vendors for the purchase of components and raw materials.
As of January 31, 2024, ChargePoint had lease payment obligations of $26.7 million, with $6.5 million payable within twelve months. Purchase Commitments From time to time in the ordinary course of business, ChargePoint enters into agreements with vendors for the purchase of components and raw materials.
For performance-based stock options issued, the value of the award is measured at the grant date as the fair value of the award and is expensed over the requisite service period, using the accelerated attribution method, once the performance condition becomes probable of being achieved. These inputs are subjective and generally required significant analysis and judgment to develop.
For performance-based stock options issued, the value of the award is measured at the grant date as the fair value of the award and is expensed over the requisite service period, using the accelerated attribution method, once the performance condition becomes probable of being achieved.
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.
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, and other professional services.
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.
ChargePoint generally recognizes revenue from sales of Networked Charging Systems upon shipment to the customer, at which point ChargePoint’s performance obligation is satisfied. Revenue from regulatory incentives is recognized when the regulatory incentives are transferred. Subscriptions Subscriptions revenue consists of services related to Cloud, as well as extended maintenance service plans under Assure.
ChargePoint has been and is investing heavily to succeed in Europe. ChargePoint is also working to grow its European business through partnerships with channel partners and car leasing companies and through its acquisitions of ViriCiti B.V.
ChargePoint has been and is investing heavily to succeed in Europe. ChargePoint is also working to grow its European business through partnerships with channel partners and car leasing companies and through its acquisitions of ViriCiti B.V. (“ViriCiti”) and has•to•be gmbh (“HTB”). In Europe, ChargePoint primarily competes with other providers of EV charging station networks.
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 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.
The Company also generates revenue, in some instances, by providing customers use of ChargePoint’s owned and operated systems, Cloud Services and Assure into a single multi-year or annual subscription (“ChargePoint as a Service” or “CPaaS”). Each of Cloud Services, Assure and CPaaS is typically paid for upfront and revenue is recognized ratably over the term of the subscription period.
The Company also generates revenue, in some instances, by providing customers use of ChargePoint’s owned and operated Networked Charging Systems, Cloud Services and Assure into a single multi-year or annual subscription (“ChargePoint as a Service” or “CPaaS”).
If ChargePoint is unable to continue penetrating the market in Europe, its financial condition and results of operations could be materially and adversely impacted.
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 could be materially and adversely impacted.
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.
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.
The net proceeds from the sale of the 2027 Convertible Notes were approximately $294.0 million after deducting initial purchaser discounts and commissions and the Company’s offering expenses. ChargePoint expects to use the net proceeds for general corporate purposes.
The net proceeds from the original sale of the 2028 Convertible Notes were approximately $294.0 million after deducting initial purchaser discounts and commissions and the Company’s offering expenses.
For the Year Ended January 31, Change 2023 2022 2021 2023 vs 2022 2022 vs 2021 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) 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.
For the Year Ended January 31, Change 2024 2023 2022 2024 vs 2023 2023 vs 2022 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) Interest expense $ (16,273) $ (9,434) $ (1,502) $ (6,839) 72.5 % $ (7,932) 528.1 % Percentage of total revenue (3.2) % (2.0) % (0.6) % Interest expense increased during the fiscal year ended January 31, 2024 compared to fiscal year ended January 31, 2023 primarily due to interest expense on the 2028 Convertible Notes that were originally issued in April 2022, and amended in October 2023.
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.
For the Year Ended January 31, Change 2024 2023 2022 2024 to 2023 2023 to 2022 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) Provision (benefit) for income taxes $ (21) $ (2,167) $ (2,930) $ 2,146 (99.0) % $ 763 (26.0) % Percentage of loss before provision (benefit) for income taxes — % 0.6 % 2.2 % The benefit for income taxes decreased during the fiscal year ended January 31, 2024 as compared to fiscal year ended January 31, 2023 primarily due to changes to deferred tax liability following a tax rate reduction in certain foreign jurisdictions recorded in the prior year.
The change in operating assets and liabilities was mainly driven by increases in deferred revenue of $55.3 million, accrued and other liabilities of $21.6 million and accounts payable of $7.9 million, partially offset by an increase in accounts receivable of $38.4 million and prepaid expenses and other assets of $23.9 million and a decrease in operating lease liabilities of $3.5 million.
The change in operating assets and liabilities was mainly driven by an increase in inventory of $173.7 million and decrease in accounts payable, operating lease liabilities and accrued and other liabilities of $5.5 million, partially offset by a decrease in accounts receivable, net, of $36.5 million, an increase in deferred revenue of $32.8 million and a decrease in prepaid expenses and other assets of $7.0 million.
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.
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 believes its revenue growth is tied to the number of passenger and commercial EVs sold, which it believes drives the demand for EV charging infrastructure.
Cost of Revenue Networked Charging Systems ChargePoint uses contract manufacturers to manufacture the substantial majority of its Networked Charging Systems. ChargePoint’s in-house manufacturing is typically limited to initial development units and to early customer samples. ChargePoint’s cost of revenue for the sale of Networked Charging Systems includes the contract manufacturer costs of finished goods and shipping and handling.
Cost of Revenue Networked Charging Systems ChargePoint uses contract manufacturers to manufacture its Networked Charging Systems. ChargePoint’s cost of revenue for the sale of Networked Charging Systems includes the contract manufacturer costs of finished goods and shipping and handling.
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.
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.
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 the market for EVs does not develop as expected, if there is any slow-down or delay in overall EV adoption, or if auto manufacturers delay their EV manufacturing rates or eliminate their plans to transition to predominately EV manufacturing, the rate of EV adoption may be adversely affected and the market for EV charging may not develop and as a result, ChargePoint’s financial condition and results of operations could be materially and adversely impacted.
The 2027 Convertible Notes are convertible, based on the applicable conversion rate, into cash, shares of ChargePoint Common Stock or a combination thereof, at ChargePoint’s election.
The 2028 Convertible Notes bear Cash Interest at 7.00% per annum or 8.50% per annum through the issuance of additional 2028 Convertible Notes (“PIK Interest”). The 2028 Convertible Notes are convertible, based on the applicable conversion rate, into cash, shares of ChargePoint Common Stock or a combination thereof, at ChargePoint’s election.
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.
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.
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 (%) Subscriptions $ 85,296 $ 53,512 $ 40,563 $ 31,784 59.4 % $ 12,949 31.9 % Percentage of total revenue 18.2 % 22.2 % 27.7 % Subscriptions revenue increased for the fiscal year ended January 31, 2023 compared to fiscal year ended January 31, 2022 primarily due to the growth in the number of Cloud subscriptions and Assure subscriptions for Networked Charging Systems connected to ChargePoint’s network. 47 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 (%) Other revenue $ 19,176 $ 13,644 $ 14,034 $ 5,532 40.5 % $ (390) (2.8) % Percentage of total revenue 4.1 % 5.7 % 9.6 % Other revenue increased for the fiscal year ended January 31, 2023 compared to fiscal year ended January 31, 2022 primarily due to net transaction fees earned for processing payments collected on driver charging sessions at charging sites owned by ChargePoint’s customers.
For the Year Ended January 31, Change 2024 2023 2022 2024 vs 2023 2023 vs 2022 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) Other revenue $ 25,372 $ 19,176 $ 13,644 $ 6,196 32.3 % $ 5,532 40.5 % Percentage of total revenue 5.0 % 4.1 % 5.7 % Other revenue increased for the fiscal year ended January 31, 2024 compared to fiscal year ended January 31, 2023 primarily due to net transaction fees earned for processing payments collected on driver charging sessions at charging sites owned by ChargePoint’s customers.
However, due to contractual terms and variability in production levels, and opportunities to renegotiate pricing, ChargePoint generally does not have long-term binding and enforceable purchase orders under such contracts, and the timing and magnitude of purchase orders beyond such period is difficult to accurately project. 54 Table of Content Critical Accounting Policies and Estimates Management’s discussion and analysis of ChargePoint’s financial condition and results of operations is based on its consolidated financial statements, which have been prepared in accordance with U.S.
However, due to contractual terms and variability in production levels, and opportunities to renegotiate pricing, ChargePoint generally does not have long-term binding and enforceable purchase orders under such contracts, and the timing and magnitude of purchase orders beyond such period is difficult to accurately project.
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.
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 $142.4 million.
For the Year Ended January 31, Change 2023 2022 2021 2023 vs 2022 2022 vs 2021 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) Cost of 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.
For the Year Ended January 31, Change 2024 2023 2022 2024 vs 2023 2023 vs 2022 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) Cost of Subscriptions revenue $ 73,595 $ 51,416 $ 31,190 $ 22,179 43.1 % $ 20,226 64.8 % Percentage of total revenue 14.5 % 11.0 % 12.9 % Cost of subscriptions revenue increased during fiscal year ended January 31, 2024 compared to fiscal year ended January 31, 2023 primarily due to increases in Assure maintenance costs, customer support personnel expenses which were driven by ChargePoint expanding its Networked Charging Systems, network wireless connectivity costs, and other operating costs.
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.
For more information regarding ChargePoint’s other contractual obligations, refer to Note 7, Commitments and Contingencies , to its notes to the consolidated financial statements included elsewhere in this Annual Report. Operating Lease Obligations ChargePoint has operating lease obligations for office spaces and data centers.
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 $(1.6) million during the fiscal year ended January 31, 2023 due to favorable changes in foreign exchange rates.
For the Year Ended January 31, Change 2024 2023 2022 2024 to 2023 2023 to 2022 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) Other income (expense), net $ (1,009) $ (1,569) $ (2,775) $ 560 (35.7) % $ 1,206 (43.5) % Percentage of total revenue (0.2) % (0.3) % (1.2) % Other income (expense), net changed from $(1.6) million during the fiscal year ended January 31, 2023 to $(1.0) million during the fiscal year ended January 31, 2024 due to favorable changes in foreign exchange rates. 57 Table of Content Provision for Income Taxes ChargePoint’s provision for income taxes consists of federal, state and foreign income taxes based on enacted federal, state and foreign tax rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities and changes in tax law.
As ChargePoint attains higher revenue, it expects operating expenses as a percentage of total revenue to decrease as it scales and focuses on increasing operational efficiency and process automation.
As ChargePoint attains higher revenue, it expects operating expenses as a percentage of total revenue to decrease as it scales and focuses on increasing operational efficiency and process automation. ChargePoint intends to use third-party contract manufacturers and design partners for targeted new research and development initiatives with the goals of controlling development costs and decreasing operating expenses.
Any resulting decline in the ability or willingness of customers, fleet owners and operators to purchase ChargePoint’s products or subscription services could have an adverse impact on ChargePoint’s results of operations and financial condition. 46 Table of Content Results of Operations & its Components Revenue Networked Charging Systems Networked Charging Systems revenue includes the deliveries of EV charging system infrastructure, which include a range of AC products for use in residential, commercial and fleet applications, and DC, or fast-charge products for use in commercial and fleet applications.
Any resulting decline in the ability or willingness of customers, fleet owners and operators to purchase ChargePoint’s products or subscription services could have an adverse impact on ChargePoint’s results of operations and financial condition.
Any significant decline from these customers may have an adverse impact on ChargePoint’s potential for future growth. If the Company is not successful in the fleet vertical, its financial condition and results of operations could be materially and adversely affected.
If ChargePoint is not successful in the fleet vertical, its financial condition and results of operations could be materially and adversely affected.
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.
Critical Accounting Policies and Estimates Management’s discussion and analysis of ChargePoint’s financial condition and results of operations is based on its consolidated financial statements, which have been prepared in accordance with U.S. 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.
ChargePoint also offers AC chargers for use at home or multifamily settings and for fleet applications, and high-power Level 3 Direct Current (“DC”) chargers for fast urban charging, corridor or long-trip charging and fleet applications. ChargePoint intends to expand its market share over time in its product categories, leveraging the network effect of its products and Cloud Services software.
Competition ChargePoint is currently a market leader in North America in commercial Level 2 Alternating Current (“AC”) charging. ChargePoint also offers AC chargers for use at home or multifamily settings and for fleet applications, and high-power Level 3 Direct Current (“DC”) chargers for fast urban charging, corridor or long-trip charging and fleet applications.
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.
If adequate funds are not available, ChargePoint may need to reconsider its expansion plans or limit its research and development activities, which could have a material adverse impact on its business prospects and results of operations. 59 Table of Content Cash Flows For the Fiscal Years Ended January 31, 2024, 2023 and 2022 The following table sets forth a summary of ChargePoint’s cash flows for the periods indicated: Year Ended January 31, 2024 2023 2022 (in thousands) Net cash (used in) provided by: Operating activities $ (328,941) $ (267,049) $ (157,178) Investing activities 85,576 (126,154) (221,740) Financing activities 306,524 372,859 549,687 Effects of exchange rates on cash, cash equivalents, and restricted cash 89 (729) (1,025) Net increase (decrease) in cash, cash equivalents and restricted cash $ 63,248 $ (21,073) $ 169,744 Net Cash Used in Operating Activities During the year ended January 31, 2024, net cash used in operating activities was $328.9 million, consisting primarily of a net loss of $457.6 million, partially offset by a decrease in net operating assets of $102.8 million and non-cash charges of $231.5 million.
Stock-based Compensation Determining the grant date fair value of employee stock purchase plan (“ESPP”) rights using the Black-Scholes option-pricing model requires management to make certain assumptions and judgments. These estimates involve inherent uncertainties, and, if different assumptions had been used, stock-based compensation expense could have been materially different from the amounts recorded.
These estimates involve inherent uncertainties, and, if different assumptions had been used, stock-based compensation expense could have been materially different from the amounts recorded.
For the Year Ended January 31, Change 2023 2022 2021 2023 vs 2022 2022 vs 2021 (dollar amounts in thousands, except percentages) Change ($) 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 $5.5 million increase in depreciation and other expenses.
For the Year Ended January 31, Change 2024 2023 2022 2024 vs 2023 2023 vs 2022 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) Research and Development Expenses $ 220,781 $ 194,957 $ 145,043 $ 25,824 13.2 % $ 49,914 34.4 % Percentage of total revenue 43.6 % 41.6 % 60.2 % Research and development expenses increased during the fiscal year ended January 31, 2024 compared to fiscal year ended January 31, 2023 and was primarily attributable to a $17.3 million increase in compensation related expenses due to headcount growth and employee-related exit costs related to the reorganizations implemented by the Company (see Note 14, Restructuring , in the notes to the consolidated financial statements included in this Annual Report for more details), a $14.4 million increase in stock-based compensation expense due to the impact of grants to new hires and to promote long-term retention of employees, and an increase of $2.4 million in depreciation and other operating expense.
For the Year Ended January 31, Change 2023 2022 2021 2023 vs 2022 2022 vs 2021 (dollar amounts in thousands, except percentages) Change ($) 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 $3.5 million increase in consulting and marketing expense.
For the Year Ended January 31, Change 2024 2023 2022 2024 vs 2023 2023 vs 2022 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) Sales and marketing expenses $ 150,186 $ 142,392 $ 92,550 $ 7,794 5.5 % $ 49,842 53.9 % Percentage of total revenue 29.6 % 30.4 % 38.4 % Sales and marketing expenses increased during the fiscal year ended January 31, 2024 compared to fiscal year ended January 31, 2023 primarily attributable to a $2.4 million increase in compensation related expenses due to headcount growth and employee-related exit costs related to the reorganizations implemented by the Company (see Note 14, Restructuring , in the notes to the consolidated financial statements included in this Annual Report for more details), and a $5.5 million increase in stock-based compensation expense due to the impact of grants to new hires and to promote long-term retention of employees.
The initial conversion rate was 41.6119 shares per $1,000 principal amount of the 2027 Convertible Notes, subject to customary anti-dilution adjustment in certain circumstances, which represented an initial conversion price of approximately $24.03 per share. 52 Table of Content For additional details refer to Note 9, Debt, to ChargePoint’s notes to the consolidated financial statements in this Annual Report.
The initial conversion rate was 83.3333 shares per $1,000 principal amount of the 2028 Convertible Notes, subject to customary anti-dilution adjustment in certain circumstances, which represents an initial conversion price of approximately $12.00 per share.
Valuation allowances are established when necessary to reduce deferred tax assets where it is more likely than not that the deferred tax assets will not be realized. 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.
Deferred tax expense or benefit is the result of changes in the deferred tax asset and liability. Valuation allowances are established when necessary to reduce deferred tax assets where it is more likely than not that the deferred tax assets will not be realized.
ChargePoint targets three key verticals: commercial, fleet and residential. Commercial customers have parking places largely within their workplaces and include retail, hospitality, healthcare, fueling and convenience and parking lot operators. Fleet includes municipal buses, delivery and work vehicles, port/airport/warehouse and other industrial applications, ridesharing services, and is expected to eventually include autonomous transportation.
Fleet includes municipal buses, delivery and work vehicles, port/airport/warehouse and other industrial applications, ridesharing services, and is expected to eventually include autonomous transportation. Residential includes single family homes and multifamily residences.
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.
Net Cash Provided By (Used In) Investing Activities During the year ended January 31, 2024, net cash provided by investing activities was $85.6 million consisting of cash received from maturities of short-term investments of $105.0 million, offset by purchases of property and equipment of $19.4 million.
For the Year Ended January 31, Change 2023 2022 2021 2023 vs 2022 2022 vs 2021 (dollar amounts in thousands, except percentages) Change ($) 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.
For the Year Ended January 31, Change 2024 2023 2022 2024 vs 2023 2023 vs 2022 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) Subscriptions $ 120,445 $ 85,296 $ 53,512 $ 35,149 41.2 % $ 31,784 59.4 % Percentage of total revenue 23.8 % 18.2 % 22.2 % Subscriptions revenue increased for the fiscal year ended January 31, 2024 compared to fiscal year ended January 31, 2023 primarily due to the growth in the number of Cloud subscriptions and Assure subscriptions for Networked Charging Systems connected to ChargePoint’s network.
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.
In the long term it expects revenue to grow in both Networked Charging Systems and subscriptions due to increased demand in EVs and the related charging infrastructure market. 53 Table of Content For the Year Ended January 31, Change 2024 2023 2022 2024 vs 2023 2023 vs 2022 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) Networked Charging Systems $ 360,822 $ 363,622 $ 173,850 $ (2,800) (0.8) % $ 189,772 109.2 % Percentage of total revenue 71.2 % 77.7 % 72.1 % Networked Charging Systems revenue marginally decreased for fiscal year ended January 31, 2024 compared to fiscal year ended January 31, 2023.
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.
Other Cost of other revenue includes depreciation and other costs for ChargePoint’s owned and operated charging sites, charging related processing charges, salaries and related personnel expenses, including stock-based compensation, as well as costs of professional services. 54 Table of Content For the Year Ended January 31, Change 2024 2023 2022 2024 vs 2023 2023 vs 2022 (dollar amounts in thousands, except percentages) Change ($) Change (%) Change ($) Change (%) Cost of Networked Charging Systems revenue $ 386,149 $ 318,628 $ 147,313 $ 67,521 21.2 % $ 171,315 116.3 % Percentage of total revenue 76.2 % 68.1 % 61.1 % Cost of Networked Charging Systems revenue increased during the fiscal year ended January 31, 2024 compared to fiscal year ended January 31, 2023 primarily due to a year-over-year increase in the number of Networked Charging Systems delivered and inventory impairment charges totaling $70.0 million, related to product transitions and aligning inventory with customer demand.
Existing competitors may expand their product offerings and sales strategies, and new competitors may enter the market. If ChargePoint’s market share decreases due to increased competition, its financial condition and results of operations may be negatively impacted.
If ChargePoint’s market share decreases due to increased competition, or if ChargePoint is unable to compete with a disaggregate EV charging solutions sales model, its financial condition and results of operations may be materially and adversely impacted.
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.
As of January 31, 2024 and 2023, ChargePoint had cash and cash equivalents and restricted cash and short-term investments of $357.8 million and $399.5 million, respectively.
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.
Net Cash Provided by Financing Activities During the year ended January 31, 2024, net cash provided by financing activities was $306.5 million, consisting of proceeds from the sale of common stock under the ATM Facility, net of commission and fees, of $287.2 million, change in driver funds and amounts due to customers of $13.7 million, proceeds from the issuance of common stock under employee equity plans, net of tax withholdings, of $12.1 million, partially offset by $2.9 million in issuance costs related to the 2027 Revolving Credit Facility and $3.5 million of the total $7.1 million contingent earnout consideration payments related to the acquisition of ViriCiti, of which the remaining $3.6 million is classified as cash outflow under operating activities.
The determination of the grant date fair value of ESPP rights issued is affected by a number of variables, including the expected Common Stock price volatility over the term of the award, the expected term of the award, risk-free interest rates, and the expected dividend yield of ChargePoint Common Stock. • Expected volatility: The expected volatility for the ESPP rights was determined by using a blended volatility approach of peer volatility and implied volatility.
For ESPP, stock-based compensation on the grant date is estimated using the Black-Scholes option-pricing model, which requires the use of certain subjective assumptions, including the expected Common Stock price volatility over the term of the award, the expected term of the award, risk-free interest rates, and the expected dividend yield of ChargePoint Common Stock. 62 Table of Content Income Taxes ChargePoint utilizes the asset and liability method in accounting for income taxes.

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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 changeChargePoint 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.
Biggest changeA 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. There was no material change in ChargePoint’s interest rate risk during fiscal year ended January 31, 2024 compared to fiscal year ended January 31, 2023.
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.
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, 2024. There was no material change in ChargePoint’s foreign currency risk during fiscal year ended January 31, 2024 compared to fiscal year ended January 31, 2023.
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
At this time, ChargePoint does not enter into financial instruments to hedge its foreign currency exchange risk, but it may in the future. 63 Table of Content
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.
Under the policy, ChargePoint historically 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. ChargePoint utilizes external investment managers who adhere to the guidelines of its investment policy.
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.
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 and restricted cash totaling $357.8 million as of January 31, 2024. ChargePoint’s investment policy is focused on the preservation of capital and supporting its liquidity needs.
Removed
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.

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