ChargePoint Holdings, Inc. (CHPT) Earnings Call Transcript & Summary

Okay. Well, good afternoon, everyone. We're going to stay on the EV charging team for the last fireside chat of today, which will conclude the day 1 of the conference, of the summit. We're always excited to hear the perspective of a company who can be thought of as the index for the electrification of mobility as it fuels all types of electric vehicles across all use cases with its Level 2 and DC fast charging products. Of course, we're talking about ChargePoint here. And with us today is CEO and President, Pasquale Romano. ChargePoint enjoys an advantage of its scale, land and expand strategy, consistent focus on R&D and new software and hardware advancements. As an EV infrastructure designer and manufacturer, ChargePoint is agnostic towards [indiscernible] equipment is installed. In other words, investors don't have to determine exactly how the mega theme of electrification mobility unfolds. Pasquale, thanks for joining us.

All right. If you ever want a job in sales, you actually technically are at sales.

Yes, somewhat. Yes.

It's good job.

Perfect.

So you had a pretty long history in ChargePoint, but you've been there for most of its life cycle. Could you tell how the market has evolved during your tenure before and how you see the next evolution of the market?

So this is an odd 1 of the 4 jobs I've ever had in my life, all in new markets. I've never had to not pivot a little -- at least a little bit. So the thesis for the company at the beginning was unlike liquid fuel that's environmentally hazardous, dangerous to store, all that stuff, electricity is pervasive. So assuming that you can onboard electricity anywhere and that it's pervasively distributed then it changes the fueling patterns, so pattern matching on how gasoline is accessed by consumers isn't a good way to think about how electricity will be accessed by consumers. So that's how we thought about it. So we said it will be generally onboarded when the car is parked. Most of the fuel is going to come on. And the only time that you're going to replicate what is a liquid fuel model of today is when you're driving on your battery range and you need to stop and reload because you don't have enough charge to get to your ultimate destination. So if you look at it from that perspective, you say, well, where is the car parked most of the time to understand what verticals that you need and what products and services you have to design, you assume that it's going to be unattended, that it's not going to be core to the business of most businesses that are going to be buying this stuff. So you look at much more like public WiFi accessibility, right, than you do gasoline. Although you do look at it from the traditional fueling perspective for the long haul driving segment with the twist that you need a lot more real estate associated with the parking because the dwell time is longer when you're onboarding your fuel, I'll pause there. It hasn't changed much since the -- since that beginning. So that's why you see us in every vertical, right? Because to be relevant to drivers -- it's a very diffuse fueling model. So you've kind of got to be in every vertical. And then you can attach your revenue -- you can't necessarily attach your revenue to electricity because if a business wants to give power away as a marketing expense to attract customers or endure themselves to customers or make it an employee benefit of the combination. If you attach your revenue solely to the sale of energy and the sale of energy is not what the business wants to do, then you've attached to something that puts you in conflict with your customer. So it's that simple.

Is that ultimately how you think a lot of these specific retail will go? And maybe office parks too?

Yes, I mean...

The employee perks and...

Yes. I mean -- I don't know if there any oil and gas people in here. I don't want to offend the oil and gas folks too much. I do that enough. But the challenge with driving on electricity for the energy industry at large, just think of it greater than the electricity industry but overall energy is that you're dramatically reducing the cost. So you're putting electricity in a category where you can, in some cases, treat it like an amenity, a marketing expense, et cetera, that's not possible with gasoline because of its cost. But it is possible -- and plus the dispensation restrictions on it, you can't do it at a retailer broadly because who wants a tank in the ground, all that stuff. So when you think about it that way, you basically says, "Wait a minute, a big portion of this is not necessarily going to be driven by needing to make money on it directly. It may have attribution value but not direct." So it's taking a perfectly good energy industry and kind of [indiscernible] it up in a ball and turning it into trash.

Right, right. right. Makes sense. So we do talk about you guys being agnostic about where your equipment goes because you're just selling hardware. But are you truly agnostic? I mean there's going to be some interplay between brand recognition too.

Well -- okay. So I don't quite understand -- is that from the perspective of we care -- like when I was little my mom used to tell me that who I hung out with, I was going to be judged by other parents by whom I'm friends with. Just trying to put in perspective. I'm from New Jersey, by the way, so other people from the room must have had their moms say the same thing. But, yes -- so look, where you want to be careful is how you construct. And we're doing a lot of work on this, by the way, where you construct your business models to guarantee that the equipment and the service stays in good working order and it's cared for and the surroundings do matter a little bit there. And so the question is, if it's public facing, what is the evolution of the existing business engagement with those customers to make sure that it's absolutely bulletproof for drivers. And we've got good reliability on our network right now, but we'd like to make sure that it doesn't ever get into a state of decay. So how do we require that next level engagement from business customers that want to put it out there. So we're not agnostic to that. What we're agnostic to is does in the long term, one subvertical of our business outperform another? Because if you're in it enough, you become less sensitive to short-term dynamics or long-term dynamic shifts, like we couldn't have predicted COVID, who could have. That dramatically changed our workplace business. If we were only workplace focused, I wouldn't be sitting here, and I probably would have asked you if there was another company recovering that needed [indiscernible], okay? Because I would be dead, we'd be out of business, right? And so that's the level of agnostic that I usually refer to.

Okay. Got it.

I do care who my friends are.

I know.

But I'm still hanging out with you.

It's great. I appreciate that. So how do you think about scale and the importance of scale in your business? Because you're hitting scale. I mean you're at scale now, and we're watching you accelerate too.

Yes. So scale is -- there's no negatives to scale. The positives -- the obvious positive that everyone goes -- yes, of course, I thought of that already was when you're manufacturing hardware as a component of what you do, we're always software attached, but there's a hardware delivery vehicle to the charging experience. It's sitting there and you could see it and touch it and use it. Those things always benefit from volume, from a cost structure perspective. And so then it becomes, do you have access to when supply chains get tight like we have -- I've been getting this question, we have capacity reservation agreements in place with silicon carbide, MOSFET manufacturers because we have to guarantee that we can either have assurance of supply. If you're a little -- that's hard. If you don't have scale, no one's going to put one in place for $200,000 worth in the parts. No one's going to do that because it's not worth the legal fees to do the contract. So that matters there. It matters in costs. You have to have multiple CMs in your mix globally positioned to access global supply chain. You have to be in both markets. It's one of many reasons we're in Europe. It's -- if you're isolated to one geography and the market has other well-developed companies that can run unfettered in other markets. They can swim across whatever ocean to attack you where you are. And so the best defense there is get bigger faster. And so then you look at the network effect on the software side. So if you're a company and you have -- you're a multinational and you've got offices everywhere, fleet everywhere, what have you. You don't want to have to do a bunch of software integrations because you're betting on a local hero that's only accessing one market because they're small so scale matters in the decision for larger companies to broadly bet on one partner. Ecosystem integrations go the same way. So if you're going to -- we're a fuel card provider integrated, doing a lot with [indiscernible] in Europe, et cetera, without scale, you don't get that. And once you have that, then it feeds the -- it feeds the halo effect for other verticals to make the decision to go with you. So I think it consolidates and it has to consolidate in the scale.

One of the other moats I think you have is your channel partners. I think it's a huge competitive strength and something you guys thought about very early on and others didn't, and they're going to struggle because they don't have the breadth. Could you talk through that strategy, how you developed that strategy and how it's working out for you?

So I have had -- in my almost 13 years at ChargePoint, I have had more arguments with our finance team about what's the channel -- in the early days, so what's this channel doing for us except for taking margin? Just so you know, we thought of that. Okay. So you have that argument because when you're small and you're not at scale, and you're trying to develop a channel. You sit there and say, "for the discount I have to give these folks, am I still going to handhold them on the customer sales process, they're going to develop all the collateral." It's really not -- It's still somewhat of a push market or a hand sell market. It's not a pull market. And this is 7 years ago, exactly like I just described, why are you doing this? You might just keep the margin and not burn as much cash, wouldn't that be good? Well, when you do need it, it takes a long time to develop because they have to develop the internal practices to manage their downstream EPCs, electrical contractors, all the people that buy from them. And now we're seeing the advantage for not only -- as it shifts to a pull market, business just starts to show up at the local office of a Rexel or a Sonepar border states or the usual electrical distribution types. But they're proactively grooming the electrical contractors that visit with training programs, lunch and learns, so all that sort of stuff. We're building tools, mobile apps, things like that for those folks, certification programs. So unless you build that muscle translating yourself into it is very challenging when the market is running. And then the other problem that you suffer is our gross margin, which is now on a pretty steady improvement cadence since we're out of last year's or the previous couple of quarter's supply chain problems. It's already contemplated the majority of our revenues suffering in channel margin. So if you want to transition into channel, then you have to suffer the reduction in margin and the margin recovery. And that's hard to do while you're investing in the channel, and they've already got us positioned in the channel, and all that sort of stuff. So this is going to turn into -- we're already doing thousands and thousands of transactions a quarter. It's just going to be a mind-numbingly diffused market. And I don't see how you attack it with a direct sales force. It's impossible.

Right. Right. And costly. I got it. I'd love to -- I know we talked about it on our conference call the other day, but I'd love to give further detail on the Ford, GM announcements, the Tesla Supercharger networks, the technical changes you may have to make. But also, if you have any views on the technical changes that the OEMs have to make to be able to plug into this?

You're the first person asked me that question.

I'm sure.

Yes. I haven't gotten that all day.

I would mention just -- we're asking the [indiscernible] questions up here.

Yes. So let's just talk about the technical changes. So -- and the -- but Tesla has always had the ability to charge on a CCS plug with an adapter that Tesla offer, I have one for my Tesla. And I use that after all the time with ChargePoint chargers. When you plug that adapter into a Tesla, it speaks CCS protocol. So the software that it's talking to the charger between the car and the charger standard is CCS. With every -- so we have a -- you visited us, we're a pretty big auto interoperability lab. We've long since eaten the interoperability elephant to make sure that all the little foibles that every manufacturing does -- every manufacturing does different that we've -- our chargers are software capable of charging a Tesla because they have to with the adapter because it's most of the market. So our cables are modular on our systems, they're designed to be unbolted and rebolted. And the holsters are modular because they have to match the cable type. So it's a nonissue. We've already had different [ next ] cable options in R&D for a long time. And so -- and we made an announcement to the effect that they're coming out. So the way I look at this whole thing is, it's what I call an unfortunate revenue opportunity. It's not like we gave people a connector guarantee. We'll sell them the ability to upgrade the entire field population of DC chargers out there because they're all upgradable easily in the field with a cable and a holster change. And the software is already sitting in them because it looks just like it's charging a car like that for an adapter. So there's no technical barrier whatsoever. The reason I call it an unfortunate revenue opportunity is I don't really care which connector people pick. It's a piece of plastic, just pick one, having [ to ] doesn't make any sense at all.

So I mean I know you said on one of the commissions at the federal government level on charging. Do you think the federal government needs to step in and create a standard?

Well, they already -- they've released a statement to the effect that you can't discount CCS because you have to be able to charge every car. I think there were reserved on the commentary. So you can read between the lines that, hey, I don't think the -- I think it's not too to presumptuous to say that it's politically viewed as something that is not good for consumers only because it introduces a nonfunctionally enhancing, it didn't do anything for the functionality. Now additional either cost component to a charger having to maintain more than one cable interface to vehicles which carry some additional cost burden, right? We thought we were finally rid of CHAdeMO and now we have, right? It's not prevalent in Europe because the Europeans have done it, deregulation. So there's an example. I don't know if the U.S. government is looking that way. But then the question is, what is the real stick? What is the -- they have to tie it to something. They can tie it to credits, they can tie it -- they have -- I mean they've already tied it to NEVI because NEVI is the [ CCS ] requirement, right, all that sort of stuff. But if they want to drive -- I don't particularly care which one, but I just want it to be one, right? Because I think that's good for consumers in the market.

You also speak a lot about software and the importance of continual software development. You recently crossed $100 million annually in software sales. So what's your view on this -- how this differentiates you in the market, your software versus others? And how large do you think that software business can be over time?

Well, so there's 2 very distinct questions in that sentence. In terms of how it differentiates us, it's the primary differentiator, aside from the fact that we're an end-to-end solution company, I think that's a big differentiator as well. But the software component is a big subcomponent of that being end to end. It enables -- it's one platform for any vertical, and we're seeing an increasing number of customers using us for mixed use. So I'll give you an example. You'll see a traditional workplace company that's using us for workplace, decide that they want their sales force that they give a company car to, to now have our -- use our home reimbursement systems [indiscernible] home chargers, right? And so now it's the take-home fleet software is being used over in what is otherwise a workplace customer. You're seeing retailers double-duty fast charge infrastructure for box truck and delivery van charging depending on the hours of operation of the site. So late at night, they may charge fleet vehicles and during normal business hours, they may allow consumers to use all or part of the charging infrastructure. So we're seeing a lot of mixed use, and we're seeing an increasingly -- increasing percentage. And then the other thing is the ecosystem that we're tied into. So one of my favorite analogies as you see able to see a cat when it attaches itself to a screen door -- we don't have screen doors in California, but I had screen doors when I was growing up in New Jersey. No one in California knows what a screen door is. It's very strange because we don't have bugs, right? Because we don't have water, until recently. So cat gets it claws into the screen door so you can't like pry the cat off the screen door, right? And so getting yourself hooked into fuel card providers and in-dash navigation systems and iOS mapping and Android mapping and all the other things you plug yourself into, that makes you kind of unextractable, and then you get into a retailer's loyalty program via API integration and you get into a commercial real estate operation that's mixed use in how they manage to delegate administrative rights for chargers for a Class A office space renter that has 10 parking spaces that they're running as part of their 10,000 square foot office or whatever. You get all of those software tentacles jacked into the ecosystem and you can't get the ChargePoint cat off the market's front door, you just can't. And the analogy I use for people, it goes click right away, is salesforce.com may not be the best CRM system tomorrow. But if I went to my IT team at our size, and we're not huge. If I said, "Hey, we're going to extract Salesforce because our CFO negotiated a better deal with this" -- no, because my support people would be like, "no, wait a minute here, that's tied into my support system where I got my inventory control system and it's tied into my ERP system for accounting and it's part of our internal -- we got all the internal controls defined around? Are you kidding me?" That's what I'm trying to get to, is that are you kidding me, right? That's the real moat.

Right. So do you think that the natural or the charging companies, whether it's a hardware and software supplier like yourself or whether it's EVgo, do they need to be just charging companies? Or would you consider the umbrella of something else, maybe a larger industrial? Or if the oil industry continues to kind of move in this direction?

Well, I think it's pretty different for like Kathy was just up here from EVgo and -- and are you out there, Kathy.

She just left.

Of course, she left. I would have stayed for hers, if I didn't have an investor meeting, Jesus. So Kathy is a potential customer, and I will eventually convince her through that, right, because I sell tech, but I don't own assets, right? And so it's a very different equation when you asked that question, right, of that tends more towards looking like an infrastructure fund because it's -- it's a return on assets business. So what should that be part of? Well, that's a whole set of things that can be part of because of that umbrella -- that umbrella class of companies. Our umbrella class of companies, right, tech companies, the way I look at it is adjacencies. This is a long-term thing. So imagine when we're at scale, profitable, access to capital returns, all that sort of stuff. Then the question becomes what adjacencies you either organically or inorganically get into that leverages the customer relationships you have? Because if I say, hey, I want to get into food services, there's not a lot of relative leverage with what we're doing. But if we wanted to get into something else in the payment chain, telematics chain that are associated with fleet software of -- that's unattached to the stuff that we do for charger scheduling and things like that, those are the possibilities. So yes, ChargePoint in the long term could become more than a charging company.

Sure.

But it's all about what's adjacent to you.

Right. Right. Okay. Could you talk a little bit about the U.S. market and the European market and what the differences are in those 2 markets, maybe the...

Better food and wine?

Well, yes, of course, but for the charging business.

For the charging business. For the charging business, there's one main difference. The main difference is they have a phenomena that we don't have here currently or any more, I should say. 20% of vehicles or so make it to the consumer via your compensation through your company.

Particularly in Germany and...

Yes. Yes. So the access -- they have a concentrated access to both home and workplace charging that you don't have in North America. It's super diffused in North America. It's your door knocking to get it done in North America or you're doing it digitally and having a very broad diffused sales problem [indiscernible]. There, that's not nearly the case because we have now -- what we've done there is we've developed relationships with the big leasing companies that serve employers in Europe. So ALD Automotive, which bought LeasePlan. So combined, I believe they're #1 in Europe. Arval is a customer that was announced, right? We have others that I'm not sure if they've ever been announced or not. But we have a large percentage of the total vehicles. We have access to that TAM. So as they continue to convert their vehicle leasing programs to their customers to electric, we provide the software and the hardware for the home reimbursement programs, for the workplace charging and we'll get into increasingly kind of more things with them. They also do, in some cases, fleet leasing to business fleets that are using the vehicles for their business, right -- so that counts as an employee benefit. So that's a big difference. The other big difference is that when we entered Europe, there was no ChargePoint in Europe. There was a bunch of local players that are much smaller on the technology side. I don't think we could have broken in if there was one of us there because for the same scaled discussion that we had with Ford, so we got -- I'd rather [indiscernible] seeing my career, I'd rather be lucky than good, and we got lucky that one of those hadn't happened. And it's usually because access to capital when you're a developing company there on your [indiscernible] is hard. So they tend to become local heroes. They live within a vertical -- a small vertical within the country, usually that their headquartered and most of the employees come from. And then their #1 goal in life is to stop burning cash before they can't raise anymore. And so that naturally pulls in the horns of the what you can accomplish because your access to capital was so limited, you have to take the consolation prize right out of the gate. And because you get this [ litany ] of local heroes, you have all of these multinational companies that want one fleet platform or one workplace platform there, you see what I'm -- right? So the local hero doesn't have much to go on in the long term.

Yes. Can you please just expand upon that. And again, it doesn't have to be Europe versus North America, but basically, your commercial vehicle, your light commercial vehicle strategy. How is that business different?

Like commercial fleet?

Yes, in terms of...

Like commercial fleet. Yes -- because when -- just for reference for the folks in the audience, when we reference commercial, we mean businesses that want to provide charging to employees or customers as consumers, right? The fleet business is often referred to as commercial. So in the -- light commercial super diffuse. So channel there is really important. If you -- dealerships and upfitters are going to be incredibly important. Especially if you look at work fleets, they'll buy white generic pickup trucks from a Ford, GM, Dodge, whatever and then they'll upfit them to have all of the racking and power offtake for the particulars of a roofing contractor or an electrical contractor or what have you. So it's about continuously grooming that channel business. We're good at channel, right? So that's the headline is we're good at channel. And so it's about taking all those practices. One-stop shopping is important because an electrical contracting firm can handle, oddly, the installation of the electrification of their fleet. They're the only one. A roofing contractor -- a roofing contractor doesn't know what to do.

And is the channel in that regard, the upfitter and they're deciding...

So like everything, it's all of the above because upfitters will be one. Because imagine you're a regional plumbing contractor, so you got a reasonable business. You'll have an upfitter or a set of upfitters that you use. And when you want to electrify transportation, your main business is plumbing, you're going to just -- you're going to say, can you just solve this for me? Just tell me how this works? And like I'll buy the electric one, a piece, I get the lower cost and no maintenance and the fuel charges are better. And power offtake, by the way, is a big deal for them so they got -- you don't have to leave the vehicle running when you want to -- basically plenty of electrical outlets for tools and supplies and things like that. So all good. Just don't let me do this myself. Don't make me think about it. I'm busy handle it and that's where we come in.

Because the charging destination actually could be the individual operator brings it home, right?

And we deal with the take home fleet. That's more often than not by the way. That's more often than not. You'll see the work truck in the driveway if you drive around your neighborhood and you actually pay attention to it. And then you've got the behind fences at the site if they have a little roll-up garage door at a commercial site that wants some charging there. So they might go to the upfitter. They may go to one of our specialty channel partners. They may go to an electrical distribution firm like our standard channel, they all have to be enabled to be able to get to light commercial because light commercial is very long tail. It's most of the fleet vehicles in the U.S. and it's super long tail.

So maybe let's talk a little bit about some of the partnerships you have. I mean, you recently announced one with Stem. You had the one with the U.S. Postal Service, you have Mercedes-Benz and Fisker as well. How are those helping you kind of, one, kind of evolve your strategy, maybe the Stem one could be a conversation about that, and the others to accelerate the growth of the charger network?

So some of the partners that you talked about there are partner/customers directly, right? And some of them are truly like we want to go to market and we need a component in the solution that's of significant complexity, but we don't want to make that, right? So let's take the Stem partnership -- that's perfect. There -- especially with the current incentives now, there are situations where [ storage pencils ]. So you've got a company that wakes up every day thinking all about that. I got plenty of fish to fry on the charging side. And we've forgotten more about charging than they know and vice versa. So ready-made partnership because when we're going after a customer [ site ], if you have a well and a pre-integrated solution, it's just -- it's the easy button. It's the easy button and that in certain scenarios where storage pencils, it moves the needle, especially if you can't get the utility drop size that you need. You can use it in that setting as well. So it's a good example of a partnership, right? If you look at the fuel car, they're customers and partners as well because if we're WEX and it's pronounced [indiscernible] in the U.S. The -- if you look at those, they're providing liquid fuel, fuel cards for years to fleets that businesses that want to give a card to their employees and say, look, whenever you fill up at a gas pump, use this card and they have all pre-negotiated rates in the auto reimbursement and the accounting. And all that's just tying into expense reporting and all that great stuff, taxing, VAT rules, all that stuff. And so we're powering the electricity domain equivalent for them. And so they look like a channel partner to some degree because -- in a weird way because that's pulling through a ton of charging licenses and hardware and stuff because that's not what they want to make. So again, and that speaks to the -- that's -- that's one of the little clause of the cat on the screen door, right? And now do all that software engineering work, and it's not going to pencil for -- until you've hit volume. So imagine how much work you've got to do to plug into a business system like that and not have it return until the volume shows up a ways later because we're still in early innings here with the electrification and transportation, so liquid fuel [ world ] generally. So that's the hard part.

So the NEVI program, there's been a lot of back and forth and the money is not flowing yet.

For the record, we called that one.

You called that one. I mean -- do you think we're at the point we're starting to make some real progress or were going to keep getting delayed?

It's not -- so from our vantage point, it's not delayed.

Fair enough. Okay.

So from our vantage point, it's running about -- so we just -- I think it got announced and I forget which date it was because it's mind-boggling. It's still happening. We just got another VW Appendix D award. Dieselgate, remember from way back when. That's still happening now. And so the -- when I used to get the question when the infrastructure bill was even on the table before it was even ratified. I would get the question from investors. So is this going to show up this year in your numbers? This was back in 2022 -- no, 2021. And I was like, are you kidding me? I said, I said this is best case, a '24 phenomenon. And they just couldn't get their head around that. But based on our experience, it looked just like Appendix D. So you had to get federal guidelines -- first, you have to get the bill passed. And you need to get federal guidelines. The federal guidelines go to the states. The states have to develop their programs, put it -- a lot of them issued an RFI to say what the hell should we do, right? They finally get the RFPs out. Then you have to have a response period that's appropriate. We have to go chase all the partners because we don't get the money. It's customers of ours that we coordinate to get the money because we're not the asset owner. And so it's running about on schedule and you'll probably see it start to show up as a trickle sometime in the beginning of '24.

Okay.

And you got 4 states that are live right now with good responses and more coming. And this, by the way, what my policy team points out to me is they're like, and just remind everyone, this is round 1. This is round 1, there's 5 rounds. This is round 1.

Fair enough. How are you thinking about your product road map from here? I mean, I know when I toured your facility, it's -- you've really simplified everything. You made it all modular. Are you looking at higher voltages? Are you looking at other...

We're already at 100 to 1,000 volts on our fast charger architecture. So there's nothing...

Okay. So you don't do anything there?

Yes. I mean we're looking at some novel -- we're looking at where the standards are going. So I'll give you stating that we've generally talked about so far and this is [indiscernible] recorded -- anyway. So then I guess it's equal access for everybody. But you've got -- in terms of dispensers to cars, if you look at power levels, it's typically limited by the amperage that is legal over the connector standard, okay? There is -- there are revisions in the works of the connector standards to be able to go to both higher voltage, slightly higher voltage, we can already run at a 1,000 and higher amperage. Backward compatible, of course, with the current standards, assuming another surprise doesn't happen and we get a third connector which would be hell. But -- so our liquid cool cable systems that were part of the announcement on the Mercedes-Benz program, those liquid cool cable dispensers have the capacity in one dispenser to do 2 500-kilowatt ports, 500 amps or a single 1,000 amp, except that there's no connector that will handle a megawatt yet. So when there's a megawatt standard, that's a relatively small incremental refinement to the internal system because we've already got the electronics and the internal system readied for megawatt charging for dispensation. Dispensation by the way is far bigger issue. It's not power conversion. You can [ build ] 5 200-kilowatt cabinets together to get a megawatt. It's not hard. It's can you get it to the vehicle, right? So we've had the malice aforethought to basically set up for that. So that will happen and it will happen gated more by standards and connector fights between OEMs and it will by us. We'll be ready early there. We do have -- if you look at our trends, we have upgraded every platform that we have to be a world platform, meaning it will handle world grid requirements, single phase, 3 phase, all the different little foibels portals that you get all over the world. It's on the hardware side, now more software stuff coming. So if you look at the products and services that -- the products that don't have a world platform, you can kind of guess where that's going in a very short time frame, okay? And then if you look at some -- on the power conversion side, we're looking at some pretty novel next-generation architectures that I think will really kind of be very groundbreaking, but that's coming. And that's -- we're not announcing the time frame for that stuff yet. The software side, we bought 2 companies not that long ago. And we're well on our way of a new version of our software cloud infrastructure that is a super set and a full combination of everything that was good about all 3 of those systems. And there was good stuff on all 3 of those systems. But good in a nonoverlapping way. We were like, well, that's a pretty good idea, and they'll be like, well, gee, this is a pretty good idea on the legacy ChargePoint side and vice versa. So we're creating a best-of-breed, fully micro serviced. We're very heavily invested in cybersecurity. It's next level security, incredible API flexibility for our cat on the screen door partners. So lots of great stuff coming on the software side. It will be much more fluid too, in terms of third-party app developers being able to develop literally applications on our cloud in a really flexible way. So you can see all kinds of other companies writing applications for ChargePoint over time. That's sort of the vision that we have for software there. We're doing a lot on mobile, a lot on in-dash integrations. Roaming continues to see, we're up to [ 500,000 ] with roaming [indiscernible], so it's quite a bit. So more of that, that's where we're spending the money. And then the boring stuff is where we're spending a lot of money, but we don't ever talk about it, which is customer onboarding automation, support automation, all the internal business systems to handle the scale, right, all that stuff.

Anyone in the audience have questions for Pat?

I think it's the end of the day.

Yes. Well, I'll ask you one more. So what should we be looking for over the next 12 to 24 months in terms of the financial guidepost?

Well, I mean, I think we talked about that on the earnings call, more of out of necessity because I -- look, it's a new industry, it's hard for people to get their arms around how investors should build their own models on top of the models that you guys provide for your research customers. So it's -- we put a number out there for Q4 on the adjusted EBITDA, cutting it by 2/3. We felt that we really needed to provide a dot to be able to snap the line to profitability because I just -- there were too many variables. The spread -- the pattern spread on that, I think, was too wide, it wasn't doing the market any service. So we basically put that out there saying, okay, if you put that out there, and you see we've been managing OpEx over 5 quarters pretty judiciously, and that's going to continue, although we did comment that it's not going to -- it's not like it's going to be not increased. It's just the operating leverage is quite healthy. If you can kind of generally put the operating expense in a band and you can put the adjusted EBITDA in a band, and you certainly can put -- you can see the margin improvement. So you can kind of put that in the band, you can certainly put the revenue in a band. And so there you go. We're a revenue x margin less OpEx as adjusted EBITDA kind of company. So it's not too hard to -- there's no -- you don't need a spreadsheet to model the company at that level.

And Pat, do you see the supply chain getting easier? I mean, obviously, it's still immature. Also in its infancy, do you see it getting better than it's been over the last 12 to 18 months.

Well, it's gotten a lot better. And would it -- are we investing in stepped up supply relationships? Yes, absolutely. I mean I mentioned the capacity reservations agreements that we have in place on key things that we don't see unwinding as fast from a demand -- from a supply perspective. By the way, one of the biggest worries I don't know if I mentioned it was the super heating of solar due to all the incentives, that consumes the same power MOSFET infrastructure that we need. So if you don't have reservation agreements, you've got to carve out your lane because the solar guys, that's a much more mature market, much better, right? You don't want to get crowded out by solar and not be able to ship a charger. And it only affects our fast chargers. But -- but it's so important. So we have -- with that aside, having to manage that in a very unique way, the balance of the supply chain has gotten tremendously better. And could -- in my career, I've seen spot issues happen like you get a political instability somewhere where there's a sort of supply of raw material. And no one probably is old enough to remember the fire in the tantalum capacitor factories in the Far East, they were kind of the big lion's share. You couldn't get tantalum capacitors. So that stuff can happen. And you can wake up one morning and be in an emergency mode. Barring that, it's a lot.

Yes. Finals?

We have 33 seconds.

Give them time. Pat, thanks so much.

Thank you, James. Yes. Thank you.

Thank you, sir.