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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 2023
OR
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission file number 001-39004
ChargePoint Holdings, Inc.
(Exact name of registrant as specified in its charter)
Delaware84-1747686
(State or other jurisdiction of incorporation or organization)(IRS Employer
Identification No.)
240 East Hacienda Avenue Campbell, CA
95008
(Address of principal executive offices)(Zip Code)
(408) 841-4500
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class             Trading Symbol(s)        Name of each exchange on which registered

Common Stock, par value $0.0001              CHPT                 New York Stock Exchange


Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.    Yes  x   No  o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x   No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerxAccelerated filero
Non-accelerated filer
o
Smaller reporting company
o

Emerging growth company
o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).     Yes   o     No  x

The registrant had outstanding 360,053,986 shares of common stock as of August 31, 2023.


CHARGEPOINT HOLDINGS, INC.
Table of Contents
2

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q (this “Quarterly Report”) includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements could include, among other things, statements regarding the future financial performance of ChargePoint Holdings, Inc. (“ChargePoint” or the “Company,” or “we,” “us,” “our” and similar terms), as well as ChargePoint’s strategy, future operations, future operating results, financial position, expectations regarding revenue, losses, costs, margins and prospects, as well as management plans and objectives. All statements, other than statements of present or historical fact included in this Quarterly Report, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “continue,” “project” or negatives of such terms and other similar expressions that predict or indicate future events or trends or that are not statements of present or historical matters. These statements are based on various assumptions, whether or not identified herein, and on the current expectations of ChargePoint’s management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of, fact or probability. Actual events and circumstances are difficult or impossible to predict and may differ from assumptions, and such differences may be material. Many actual events and circumstances are beyond the control of ChargePoint. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about ChargePoint that may cause the actual results, level of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. If any of these risks materialize or ChargePoint’s assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that ChargePoint does not presently know or that ChargePoint currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect ChargePoint’s expectations, plans or forecasts of future events and views as of the date hereof. ChargePoint anticipates that subsequent events and developments will cause ChargePoint’s assessments to change. These forward-looking statements should not be relied upon as representing ChargePoint’s assessments as of any date subsequent to the date hereof. Accordingly, undue reliance should not be placed upon the forward-looking statements. ChargePoint cautions you that these forward-looking statements are subject to numerous risk and uncertainties, most of which are all difficult to predict and many of which are beyond the control of ChargePoint.
The following factors, among others, could cause actual results to differ materially from forward-looking statements:
ChargePoint experiences delays in new product introductions or adoption;
ChargePoint’s ability to expand its business in Europe and the United States;
the electric vehicle (“EV”) market and deliveries of passenger and fleet vehicles may not grow as expected;
ChargePoint may not attract a sufficient number of EV fleet owners or operators as customers;
incentives from governments or utilities may not materialize or may be reduced, which could reduce demand for EVs, or the portion of regulatory credits that customers claim may increase, which would reduce ChargePoint’s revenue from such incentives;
the impact of competing technologies or technological changes that result in reduced demand for EVs or other adverse effects on the EV market or our business;
data security breaches or other network outages;
ChargePoint’s ability to remediate its material weaknesses in internal control over financial reporting;
ChargePoint’s success in retaining or recruiting, or changes in, its officers, key employees or directors;
changes in applicable laws or regulations;
3

ChargePoint’s ability to maintain a strong balance sheet and to raise capital as needed to support its business and pursue growth opportunities;
ChargePoint’s ability to integrate acquired assets and businesses into ChargePoint’s own business and the expected benefits from acquired assets to ChargePoint, its customers and its market position; and
the possibility that ChargePoint may be adversely affected by other economic factors including macroeconomic conditions such as inflation, rising interest rates, foreign exchange volatility, adverse developments in the financial service industry, slower growth or recession or other business factors or other competitive factors.
The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with the other risk factors included herein. Forward-looking statements reflect current views about ChargePoint’s plans, strategies and prospects, which are based on information available as of the date of this Quarterly Report. Except to the extent required by applicable law, ChargePoint undertakes no obligation (and expressly disclaims any such obligation) to update or revise the forward-looking statements whether as a result of new information, future events or otherwise.

4


ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

5


ChargePoint Holdings, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data, unaudited)
July 31,
2023
January 31,
2023
Assets
Current assets:
Cash and cash equivalents$233,499 $264,162 
Restricted cash30,400 30,400 
Short-term investments 104,966 
Accounts receivable, net of allowance of $13,000 as of July 31, 2023 and $10,000 as of January 31, 2023
202,079 164,892 
Inventories143,580 68,730 
Prepaid expenses and other current assets82,657 71,020 
Total current assets692,215 704,170 
Property and equipment, net42,736 40,046 
Intangible assets, net87,924 92,673 
Operating lease right-of-use assets20,164 22,242 
Goodwill216,615 213,716 
Other assets8,734 7,110 
Total assets$1,068,388 $1,079,957 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$99,024 $62,076 
Accrued and other current liabilities145,725 133,483 
Deferred revenue95,800 88,777 
Total current liabilities340,549 284,336 
Deferred revenue, noncurrent124,042 109,833 
Debt, noncurrent295,539 294,936 
Operating lease liabilities19,544 21,841 
Deferred tax liabilities11,868 12,987 
Other long-term liabilities1,626 1,032 
Total liabilities793,168 724,965 
Commitments and contingencies (Note 8)
Stockholders’ equity:
Common stock: $0.0001 par value; 1,000,000,000 shares authorized as of July 31, 2023 and January 31, 2023; 359,792,252 and 348,330,481 shares issued and outstanding as of July 31, 2023 and January 31, 2023, respectively
36 35 
Preferred stock, $0.0001 par value; 10,000,000 shares authorized as of July 31, 2023 and January 31, 2023; 0 issued and outstanding as of July 31, 2023 and January 31, 2023
  
Additional paid-in capital1,648,198 1,528,104 
Accumulated other comprehensive loss(11,608)(16,384)
Accumulated deficit(1,361,406)(1,156,763)
Total stockholders’ equity275,220 354,992 
Total liabilities and stockholders’ equity$1,068,388 $1,079,957 
    
The accompanying notes are an integral part of these condensed consolidated financial statements.
6


ChargePoint Holdings, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share data, unaudited)
Three Months Ended
July 31,
Six Months Ended
July 31,
2023202220232022
Revenue
Networked charging systems$114,574 $84,148 $212,894 $143,699 
Subscriptions30,011 20,244 56,376 37,890 
Other5,909 3,900 11,253 8,336 
Total revenue150,494 108,292 280,523 189,925 
Cost of revenue
Networked charging systems126,961 74,352 207,883 130,618 
Subscriptions18,692 13,278 33,497 23,905 
Other3,716 2,509 7,483 5,142 
Total cost of revenue149,369 90,139 248,863 159,665 
Gross profit1,125 18,153 31,660 30,260 
Operating expenses
Research and development59,642 51,804 109,039 100,105 
Sales and marketing39,671 33,873 76,711 66,460 
General and administrative25,144 22,846 49,164 43,893 
Total operating expenses124,457 108,523 234,914 210,458 
Loss from operations(123,332)(90,370)(203,254)(180,198)
Interest income1,840 1,460 4,300 1,566 
Interest expense(2,926)(2,928)(5,853)(3,862)
Change in fair value of common stock warrant liabilities   (24)
Other income (expense), net68 (1,254)642 (1,702)
Net loss before income taxes(124,350)(93,092)(204,165)(184,220)
Provision for (benefit from) income taxes905 (392)478 (2,254)
Net loss$(125,255)$(92,700)$(204,643)$(181,966)
Weighted average shares outstanding - Basic and Diluted355,876,807 336,813,555 353,008,473 335,736,772 
Net loss per share - Basic and Diluted$(0.35)$(0.28)$(0.58)$(0.54)
The accompanying notes are an integral part of these condensed consolidated financial statements.
7


ChargePoint Holdings, Inc.
Condensed Consolidated Statements of Comprehensive Loss
(in thousands, unaudited)
Three Months Ended
July 31,
Six Months Ended
July 31,
2023202220232022
Net loss$(125,255)$(92,700)$(204,643)$(181,966)
Other comprehensive income (loss):
Foreign currency translation adjustment185 (6,562)4,327 (19,502)
Reclassification adjustment for net realized gains on short-term investments included in net income, net of tax  449  
Unrealized loss on short-term investments, net of tax (1,303) (1,303)
Other comprehensive income (loss)185 (7,865)4,776 (20,805)
Comprehensive loss$(125,070)$(100,565)$(199,867)$(202,771)

The accompanying notes are an integral part of these condensed consolidated financial statements.
8


ChargePoint Holdings, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(in thousands, except share data, unaudited)

Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive LossAccumulated DeficitTotal Stockholders’ Equity
 SharesAmount
Balances as of January 31, 2023348,330,481 $35 $1,528,104 $(16,384)$(1,156,763)$354,992 
Issuance of common stock under stock plans, net of tax withholding2,278,764 — 915 — — 915 
Issuance of common stock upon ESPP purchase
562,829 — 4,875 — — 4,875 
Issuance of common stock in connection with ATM offerings, net of issuance costs1,909,028 — 17,516 — — 17,516 
Vesting of early exercised stock options— — 14 — — 14 
Stock-based compensation— — 23,964 — — 23,964 
Net loss— — — — (79,388)(79,388)
Other comprehensive income— — — 4,591 — 4,591 
Balances as of April 30, 2023353,081,102 $35 $1,575,388 $(11,793)$(1,236,151)$327,479 
Issuance of common stock under stock plans, net of tax withholding2,635,078 — 420 — — 420 
Issuance of common stock in connection with ATM offerings, net of issuance costs4,076,072 1 37,283   37,284 
Vesting of early exercised stock options— — 8 — — 8 
Stock-based compensation— — 35,099 — — 35,099 
Net loss— — — — (125,255)(125,255)
Other comprehensive loss— — — 185 — 185 
Balances as of July 31, 2023359,792,252 $36 $1,648,198 $(11,608)$(1,361,406)$275,220 

Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Accumulated DeficitTotal Stockholders’ (Deficit) Equity
 SharesAmount
Balances as of January 31, 2022334,760,615 $33 $1,366,855 $(8,219)$(811,655)$547,014 
Issuance of common stock under stock plans, net of tax withholding1,631,104 1 772 — — 773 
Issuance of common stock upon ESPP purchase263,962 — 3,920 — — 3,920 
Issuance of common stock upon exercise of warrants16,948 — 48 — — 48 
Vesting of early exercised stock options— — 17 — — 17 
Stock-based compensation— — 15,527 — — 15,527 
Net loss— — — — (89,266)(89,266)
Other comprehensive loss— — — (12,941)— (12,941)
Balances as of April 30, 2022336,672,629 $34 $1,387,139 $(21,160)$(900,921)$465,092 
Issuance of common stock upon release of restricted stock units2,147,834 — 728 — — 728 
Vesting of early exercised stock options— — 15 — — 15 
Stock-based compensation— — 26,419 — — 26,419 
Net loss— — — — (92,700)(92,700)
Other comprehensive loss— — — (7,865)— (7,865)
Balances as of July 31, 2022338,820,463 $34 $1,414,301 $(29,025)$(993,621)$391,689 


The accompanying notes are an integral part of these condensed consolidated financial statements.
9


ChargePoint Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands, unaudited)
Six Months Ended
July 31,
20232022
Cash flows from operating activities
Net loss$(204,643)$(181,966)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization14,018 12,476 
Non-cash operating lease cost2,199 2,451 
Stock-based compensation59,063 41,946 
Amortization of deferred contract acquisition costs1,380 1,118 
Inventory impairment
28,000  
Reserves and other5,026 5,015 
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable, net(40,562)(36,178)
Inventories(97,906)(18,239)
Prepaid expenses and other assets(12,365)(9,964)
Accounts payable, operating lease liabilities, and accrued and other liabilities33,957 28,896 
Deferred revenue21,231 20,773 
Net cash used in operating activities(190,602)(133,672)
Cash flows from investing activities
Purchases of property and equipment(9,877)(8,872)
Maturities of investments105,000  
Purchases of short-term investments (284,835)
Cash paid for acquisitions, net of cash acquired (2,756)
Net cash provided by (used in) investing activities95,123 (296,463)
Cash flows from financing activities
Proceeds from issuance of debt, net of discount and issuance costs 293,972 
Debt issuance costs related to the revolving credit facility(2,265) 
Proceeds from the issuance of common stock under employee equity plans, net of tax withholding6,212 5,419 
Proceeds from issuance of common stock in connection with ATM offerings, net of issuance costs54,799  
Change in driver funds and amounts due to customers8,839 4,238 
Settlement of contingent earnout liability(3,537) 
Net cash provided by financing activities64,048 303,629 
Effect of exchange rate changes on cash, cash equivalents, and restricted cash768 (1,067)
Net increase in cash, cash equivalents, and restricted cash(30,663)(127,573)
Cash, cash equivalents, and restricted cash at beginning of period294,562 315,635 
Cash, cash equivalents, and restricted cash at end of period$263,899 $188,062 
10


ChargePoint Holdings, Inc.
Condensed Consolidated Statements of Cash Flows - (continued)
Six Months Ended July 31, 2023 and 2022
(in thousands, unaudited)

Six Months Ended
July 31,
20232022
Supplementary cash flow information
Cash paid for interest$5,250 $ 
Cash paid for taxes$547 $197 
Supplementary cash flow information on noncash investing and financing activities
Acquisitions of property and equipment included in accounts payable and accrued and other current liabilities$3,041 $910 
Vesting of early exercised stock options$21 $32 
Unpaid debt issuance costs$507 $ 

The accompanying notes are an integral part of these condensed consolidated financial statements.
11


ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)

1.Description of Business and Basis of Presentation
ChargePoint Holdings, Inc. (“ChargePoint” or the “Company,” “it,” “its”) 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 system 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. ChargePoint’s Networked Charging Systems, subscriptions and other offerings provide an open platform that integrates with system hardware from ChargePoint and other manufacturers, connecting systems over an intelligent network that provides real-time information about charging sessions and full control, support and management of the Networked Charging Systems. This network also provides multiple web-based portals for charging system owners, fleet managers, drivers and utilities. In addition, the Company offers a range of extended warranties (“Assure”), as well as its ChargePoint as a Service (“CPaaS”) program which bundles use of ChargePoint owned and operated systems with Cloud Services, Assure and other benefits into one subscription.
The Company’s fiscal year ends on January 31. References to fiscal year 2023 relate to the fiscal year ended January 31, 2023 and to fiscal year 2024 refer to the fiscal year ending January 31, 2024.
Basis of Presentation
The condensed consolidated financial statements and accompanying notes are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial reporting. The Company’s condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the year ended January 31, 2023 included in the Company’s Annual Report on Form 10-K filed with the SEC on April 3, 2023, which provides a more complete discussion of the Company’s accounting policies and certain other information. The information as of January 31, 2023, included on the condensed consolidated balance sheets was derived from the Company’s audited consolidated financial statements. The condensed consolidated financial statements were prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary for a fair statement of the Company’s financial position as of July 31, 2023, the results of operations for the three and six months ended July 31, 2023 and 2022, and cash flows for the six months ended July 31, 2023 and 2022. The results of operations for the three and six months ended July 31, 2023, are not necessarily indicative of the results that may be expected for the year ending January 31, 2024.
The Company’s condensed consolidated financial statements have been prepared on the basis of continuity of operations, the realization of assets, and the satisfaction of liabilities in the ordinary course of business. Since inception, the Company has been engaged in developing and marketing its Networked Charging Systems, subscriptions and other offerings, raising capital, and recruiting personnel and it has incurred net operating losses and negative cash flows from operations in every year since inception and expects this to continue for the foreseeable future. As of July 31, 2023, the Company had an accumulated deficit of $1,361.4 million.
The Company has funded its operations primarily with proceeds from the issuance of redeemable convertible preferred stock, convertible notes, exercise proceeds from options and warrants, borrowings under loan facilities, customer payments, proceeds from sale of Common Stock under the ATM Facility (as defined in Note 9, Common Stock), and proceeds from the Reverse Recapitalization (as defined below). The Company had cash, cash equivalents and restricted cash of $263.9 million as of July 31, 2023. Cash outflow from operations was $190.6 million and $133.7 million for the six months ended July 31, 2023 and 2022, respectively. As of September 11, 2023, the date on which these condensed consolidated financial statements were issued, the Company believes that its cash on hand, together with cash generated from sales to customers, will satisfy its working capital and capital requirements for at least the next twelve months.
12


ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
The Company’s assessment of the period of time its financial resources will be adequate to support its operations is a forward-looking statement and involves risks and uncertainties. The Company’s actual results could vary as a result of, and its near- and long-term future capital requirements will depend on, many factors, including its growth rate, subscription renewal activity, the timing and extent of spending to support its acquisitions, infrastructure and research and development efforts, the expansion of sales and marketing activities, the timing of new introductions of products or features, the continuing market adoption of its Networked Charging Systems and Cloud Services platform, and the overall market acceptance of EVs. The Company has and may in the future enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property rights. The Company has based its estimates on assumptions that may prove to be wrong, and it could use its available capital resources sooner than it currently expects. The Company may be required to seek additional equity or debt financing. Future liquidity and cash requirements will depend on numerous factors, including market penetration, the introduction of new products, and potential acquisitions of related businesses or technology. If additional financing is required from outside sources, the Company may not be able to raise it on acceptable terms or at all. If the Company is unable to raise additional capital when desired, or if it cannot expand its operations or otherwise capitalize on its business opportunities because it lacks sufficient capital, the Company may need to reorganize its operations including through further reductions in its workforce and its business, operating results and financial condition would be materially adversely affected.
Reverse Recapitalization
On February 26, 2021, Lightning Merger Sub Inc., a wholly-owned subsidiary of Switchback Energy Acquisition Corporation (“Switchback”), merged with ChargePoint, Inc. (“Legacy ChargePoint”), with Legacy ChargePoint surviving as a wholly-owned subsidiary of Switchback (the “Merger”). As a result of the Merger, Switchback was renamed “ChargePoint Holdings, Inc.” Immediately prior to the closing of the Merger (the “Closing”), Legacy ChargePoint’s outstanding series of redeemable convertible preferred stock were converted to Legacy ChargePoint common stock, which then converted to the Company’s common stock (“Common Stock”).
The Merger is accounted for as a reverse capitalization in accordance with U.S. GAAP.
2.Summary of Significant Accounting Policies
Other than policies noted below, there have been no significant changes to the significant accounting policies disclosed in Note 2 of the audited consolidated financial statements as of January 31, 2023 and 2022 and for the years ended January 31, 2023, 2022 and 2021 included in ChargePoint’s Annual Report on Form 10-K filed with the SEC on April 3, 2023.
Use of Estimates
The preparation of the accompanying condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenue and expenses. Actual results and outcomes could differ significantly from the Company’s estimates, judgments and assumptions. Significant estimates include determining standalone selling price for performance obligations in contracts with customers, the estimated expected benefit period for deferred contract acquisition costs, allowances for expected credit losses, inventory reserves, loss on purchase commitment, the useful lives of long-lived assets, the determination of the incremental borrowing rate used for operating lease liabilities, valuation of acquired goodwill and intangible assets, and other assumptions used to measure stock-based compensation, and the valuation of deferred income tax assets and uncertain tax positions. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. The Company adjusts such estimates and assumptions when facts and circumstances dictate. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods. As future events and their effects cannot be determined with precision, actual results could materially differ from those estimates and assumptions.
Concentration of Credit Risk and Other Risks and Uncertainties
Financial instruments that potentially subject the Company to credit risk consist primarily of cash and cash equivalents and accounts receivable. Cash and cash equivalents are held in domestic and foreign cash accounts across large, creditworthy
13


ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
financial institutions. The Company has not experienced any losses on its deposits of cash and cash equivalents through deposits with federally insured commercial banks and at times cash deposit balances may be in excess of federal insurance limits.
Accounts receivable are stated at the amount the Company expects to collect. The Company generally does not require collateral or other security in support of accounts receivable. To reduce credit risk, management performs ongoing credit evaluations of its customers’ financial condition.
Concentration of credit risk with respect to trade accounts receivable is considered to be limited due to the diversity of the Company’s customer base and geographic sales areas. As of July 31, 2023, no customer individually accounted for 10% or more of accounts receivable, net. As of January 31, 2023, one customer individually accounted for 10% or more of accounts receivable, net. For the three months ended July 31, 2023, no customer individually represented 10% or more of total revenue. For the three months ended July 31, 2022, one customer accounted for 15% of total revenue. For the six months ended July 31, 2023 and July 31, 2022, no customer individually represented 10% or more of total revenue.
The Company’s revenue is concentrated in the infrastructure needed for charging EVs, an industry which is highly competitive and rapidly changing. Significant technological changes within the industry or customer requirements, or the emergence of competitive products with new capabilities or technologies, could adversely affect the Company’s business, operating results and financial condition.
Segment Reporting
Operating segments are defined as components of an entity where discrete financial information is evaluated regularly by the chief decision maker (“CODM”). The Company operates as one operating segment because its Chief Executive Officer, as the Company’s CODM, reviews its financial information on a consolidated basis for purposes of making decisions regarding allocating resources and assessing performance. The Company has no segment managers who are held accountable by the CODM for operations, operating results, and planning for levels of components below the consolidated unit level.
Cash, Cash Equivalents, and Restricted Cash
The Company considers all highly liquid investments with an original maturity of three months or less, when purchased, to be cash equivalents. Cash equivalents may be invested in money market funds. Cash and cash equivalents are carried at cost, which approximates their fair value.
Restricted cash relates to cash deposits restricted under letters of credit issued in support of customer and contract manufacturer agreements.
The reconciliation of cash, cash equivalents, and restricted cash to amounts presented in the consolidated condensed statements of cash flows was as follows:
July 31,
2023
January 31,
2023
(in thousands)
Cash and cash equivalents$233,499 $264,162 
Restricted cash30,400 30,400 
Total cash, cash equivalents, and restricted cash$263,899 $294,562 
14


ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Short-Term Investments
The Company's portfolio of marketable debt securities is comprised solely of U.S. government securities with maturities of more than three months, but less than one year. The Company classifies these as available-for-sale at purchase date and will reevaluate such designation at each period end date. The Company may sell these marketable debt securities prior to their stated maturities depending upon changing liquidity requirements.
These debt securities are classified as current assets in the condensed consolidated balance sheet and recorded at fair value, with unrealized gains or losses included in accumulated other comprehensive income (loss) and as a component of the condensed consolidated statements of comprehensive loss.
Gains and losses are recognized when realized. Gains and losses are determined using the specific identification method and are reported in other income (expense), net in the condensed consolidated statements of operations.
For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell the security or it is more likely than not that the Company will be required to sell the security before the recovery of its entire amortized cost basis. If either of these criteria is met, the security’s amortized cost basis is written down to fair value through other income (expense), net in the consolidated statements of operations. If neither of these criteria is met, the Company evaluates whether the decline in fair value below amortized cost is due to credit or non-credit related factors. In making this assessment, the Company considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and any adverse conditions specifically related to the security, among other factors. Credit related unrealized losses are recognized as an allowance for expected credit losses of available-for-sale debt securities on the consolidated balance sheets with a corresponding charge in other income (expense), net in the consolidated statements of operations. Non-credit related unrealized losses are included in accumulated other comprehensive income (loss).
All of the short-term investments in U.S. Treasury securities have matured and no short-term investments remain outstanding since April 30, 2023. As of January 31, 2023, short-term investments consisted of the following:
January 31, 2023
Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
(in thousands)
U.S. Treasury Securities$105,415 $ $(449)$104,966 
Amortized cost and fair value amounts include accrued interest receivable of $0.5 million as of January 31, 2023.
Fair Value of Financial Instruments
Fair value is defined as an exchange price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Assets and liabilities measured at fair value are classified into the following categories based on the inputs used to measure fair value:
(Level 1) — Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date;
(Level 2) — Inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or indirectly; and
(Level 3) — Inputs that are unobservable for the asset or liability.
The Company classifies financial instruments in Level 3 of the fair value hierarchy when there is reliance on at least one significant unobservable input to the valuation model. In addition to these unobservable inputs, the valuation models for Level 3 financial instruments typically also rely on a number of inputs that are readily observable, either directly or indirectly. The Company’s assessment of a particular input to the fair value measurement requires management to make judgments and consider factors specific to the asset or liability. The fair value hierarchy requires the use of observable market data when available in determining fair value. The Company recognizes transfers between levels within the fair value hierarchy, if any, at
15


ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
the end of each period. There were no transfers between levels during the periods presented. The Company had no material non-financial assets valued on a non-recurring basis that resulted in an impairment in any period presented.
The carrying values of the Company’s cash equivalents, accounts receivable, net, accounts payable, and accrued and other current liabilities approximate fair value based on the highly liquid, short-term nature of these instruments.
Reclassifications of Prior Period Presentation
Certain prior period amounts have been reclassified for consistency with the current year presentation.
For the six months ended July 31, 2022, “operating lease liabilities,” “accounts payable,” and “accrued and other liabilities” were combined and presented as a single line item captioned “accounts payable, operating lease liabilities and accrued and other liabilities” within the net cash used in operating activities section of the condensed consolidated statements of cash flows instead of being separately stated as in prior period presentations.
Accounting Pronouncements
Recently Issued Accounting Standards Adopted
In March 2022, the Financial Accounting Standards Board (“FASB”) issued ASU 2022-02, “Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures,” which addresses areas identified by the FASB as part of its post-implementation review of ASU 2016-13, “Financial Instruments--Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”) that introduced the current expected credit losses (“CECL”) model. The new guidance eliminates the accounting guidance for troubled debt restructurings by creditors that have already adopted the CECL model and enhances the disclosure requirements for loan refinancings and restructurings made with borrowers experiencing financial difficulty. In addition, the new guidance requires a public business entity to disclose current-period gross write-offs for financing receivables and net investment in leases by year of origination. The guidance is effective for public business entities that have adopted ASU 2016-13 for fiscal years beginning after December 31, 2022, including interim periods within those fiscal years. The Company adopted ASU 2022-02 on February 1, 2023 and elected to apply the amendments prospectively to all transactions within the scope of the amendment that are reflected in the financial statements at the date of adoption. The adoption did not have a material effect on the condensed consolidated financial statements and related disclosures.
3.Business Combinations
ViriCiti B.V.
On August 11, 2021, the Company acquired all of the outstanding shares of ViriCiti B.V. (“ViriCiti”) for $79.4 million in cash, as well as $7.1 million of additional earnout consideration contingent on meeting certain revenue targets as of January 31, 2023 (“ViriCiti Earnout”), which additional consideration was paid in full on March 6, 2023. ViriCiti is a Netherlands-based provider of electrification solutions for eBus and commercial fleets with offices in the Netherlands and the United States. The acquisition is expected to enhance ChargePoint’s fleet solutions portfolio of hardware, software and services by integrating information sources to optimize electric fleet operations.
has•to•be gmbh
On October 6, 2021, the Company acquired all of the outstanding shares of has•to•be gmbh (“HTB”) for approximately $235.0 million, consisting of $132.9 million in cash and $102.1 million in the form of 5,695,176 shares of ChargePoint Common Stock valued at $17.92 per share on the acquisition date. Of the cash component, $2.8 million was paid on February 3, 2022 as part of a working capital adjustment, and of the shares, 885,692 shares, valued at $15.9 million, were held in escrow to cover indemnity claims the Company may make within eighteen months from the closing date and were released to former HTB shareholders in April 2023. HTB is an Austria-based e-mobility provider with a European charging software platform. The acquisition is intended to expand the Company’s market share in Europe.
16


ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
4.Goodwill and Intangible Assets
The following table summarizes the changes in carrying amounts of goodwill (in thousands):
Balance as of January 31, 2023
$213,716 
Foreign exchange fluctuations2,899 
Balance as of July 31, 2023
$216,615 
There was no impairment recognized for the three and six months ended July 31, 2023 and 2022.
The following table presents the details of intangible assets:
July 31, 2023
Cost (1)
Accumulated Amortization (1)
Net (1)
Useful Life
(amounts in thousands, useful lives in years)
Customer relationships$92,153 $(17,017)$75,136 10
Developed technology18,584 (5,796)12,788 6
$110,737 $(22,813)$87,924 
_______________
(1) Values are translated into U.S. Dollars at period-end foreign exchange rates.
January 31, 2023
Cost (1)
Accumulated Amortization (1)
Net (1)
Useful Life
(amounts in thousands, useful lives in years)
Customer relationships$90,738 $(12,223)$78,515 10
Developed technology18,355 (4,197)14,158 6
$109,093 $(16,420)$92,673 
_______________
(1) Values are translated into U.S. Dollars at period-end foreign exchange rates.
Amortization expense for customer relationships and developed technology is shown as sales and marketing and cost of revenue, respectively, in the condensed consolidated statements of operations. The acquired intangible assets and goodwill are subject to impairment review at least annually on December 31st.
Acquisition-related intangible assets included in the above table are finite-lived and are carried at cost less accumulated amortization. Intangible assets are being amortized on a straight-line basis over their estimated lives, which approximates the pattern in which the economic benefits of the intangible assets are expected to be realized.
The following table presents the amortization expense related to intangible assets:
Three Months Ended
July 31, 2023
Six Months Ended
July 31, 2023
2023202220232022
(in thousands)
Amortization expense$3,039 $2,956 $6,077 $5,816 
17


ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
5.Fair Value Measurements
The Company’s assets and liabilities that were measured at fair value on a recurring basis were as follows:
Fair Value Measured as of July 31, 2023
Level 1Level 2Level 3Total
(in thousands)
Assets
Money market funds$2,343 $ $ $2,343 
Total financial assets$2,343 $ $ $2,343 
Fair Value Measured as of January 31, 2023
Level 1Level 2Level 3Total
(in thousands)
Assets
Money market funds$133,979 $ $ $133,979 
U.S. Treasury securities 104,966  104,966 
Total financial assets$133,979 $104,966 $ $238,945 
The money market funds were classified as cash and cash equivalents on the condensed consolidated balance sheets and were within Level 1 of the fair value hierarchy. The aggregate fair value of the Company’s money market funds approximated amortized cost and, as such, there were no unrealized gains or losses on money market funds as of July 31, 2023 and January 31, 2023. Realized gains and losses, net of tax, were not material for any of the periods presented.
Short-term investments, consisting of U.S. treasury securities, were classified as available-for-sale on purchase date and recorded at fair value on the condensed consolidated balance sheets. No short-term investments have been outstanding since April 30, 2023.
The following table presents a summary of the changes in the fair value of the Company’s Level 3 financial instruments for the six months ended July 31, 2022:
Private placement warrant liabilityViriCiti Earnout liability
(in thousands)
Fair value as of January 31, 2022$(25)$(5,993)
Change in fair value included in other income (expense), net(23) 
Effect of foreign currency translation 505 
Reclassification of warrants to stockholders’ equity (deficit) due to exercise48  
Fair value as of July 31, 2022$ $(5,488)
No Level 3 financial instruments have been outstanding since January 31, 2023.
Private Placement Liability
The fair values of the private placement warrant liability are based on significant unobservable inputs, which represent Level 3 measurements within the fair value hierarchy. The significant unobservable inputs used in the fair value measurements of the private placement warrant liability include the expected volatility and dividend yield. In determining the fair value of the private placement warrant liability, the Company used the Binomial Lattice Model (“BLM”) that assumes optimal exercise of the Company's redemption option at the earliest possible date (see Note 10, Stock Warrants).
On February 21, 2022, the Company redeemed the remaining Private Placement Warrants for 0.355 shares of Common Stock per warrant. The Company recorded an immaterial loss during the three months ended April 30, 2022 classified within
18


ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
change in fair value of warrant liabilities in the condensed consolidated statements of operations. No Private Placement Warrants have been outstanding since April 30, 2022.
ViriCiti Earnout Liability
On August 11, 2021, the Company acquired all of the outstanding shares of ViriCiti. The purchase price consideration included the ViriCiti Earnout, which was consideration contingent on meeting certain revenue targets through January 31, 2023. The fair value of the ViriCiti Earnout liability was previously based on significant unobservable inputs, which represent Level 3 measurements within the fair value hierarchy. The ViriCiti Earnout liability was valued using a Monte Carlo simulation valuation model using a distribution of potential outcomes over the earnout period based on the most reliable information available. The liability is remeasured to fair value based upon the attainment against the revenue targets and changes in the fair value of earnout liabilities is presented in the consolidated statements of operations using Level 3 fair value inputs.
As of January 31, 2023, the ViriCiti Earnout liability was determined to be $7.1 million, which was based on the actual achievement of the revenue target, and was subsequently paid in full on March 6, 2023 (see Note 3, Business Combination). Thus, the liability was no longer subject to the fair value measurement and was accordingly transferred out of Level 3 fair value hierarchy, and was included in the “Accrued and other current liabilities” on the Company’s consolidated balance sheets as of January 31, 2023.
6.Composition of Certain Financial Statement Items
Inventories
Inventories consisted of the following:
July 31,
2023
January 31,
2023
(in thousands)
Raw materials$8,814 $11,509 
Finished goods and components134,766 57,221 
Total Inventories$143,580 $68,730 
Inventory levels are analyzed periodically and written down to their net realizable value if they have become obsolete, have a cost basis in excess of expected net realizable value or are in excess of expected demand. During the three months ended July 31, 2023, the Company recorded an impairment charge of $28.0 million, consisting of $15.0 million charge to write down the carrying value of certain inventory on hand, as well as $13.0 million charge for losses on non-cancelable purchase commitments for inventory to be received after July 31, 2023, to reduce the carrying value of certain DC fast charging products to their estimated net realizable value. The inventory impairment charge is included in the cost of revenue - networked charging systems in the condensed consolidated statements of operations.
Prepaid expense and other current assets
Prepaid expense and other current assets consisted of the following:
July 31,
2023
January 31,
2023
(in thousands)
Prepaid expense$57,996 $48,464 
Other current assets24,661 22,556 
Total Prepaid Expense and Other Current Assets$82,657 $71,020 
19


ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Property and Equipment, net
Property and equipment, net consisted of the following:
July 31,
2023
January 31,
2023
(in thousands)
Furniture and fixtures$1,731 $1,244 
Computers and software7,907 7,164 
Machinery and equipment30,189 25,144 
Tooling14,828 13,782 
Leasehold improvements9,900 9,357 
Owned and operated systems26,352 24,119 
Construction in progress2,973 2,790 
93,880 83,600 
Less: Accumulated depreciation(51,144)(43,554)
Total Property and Equipment, Net$42,736 $40,046 
The following table presents the depreciation expense:
Three Months Ended
July 31,
Six Months Ended
July 31,
2023202220232022
(in thousands)
Depreciation expense3,925 3,300 7,941 6,660 
Accrued and Other Current Liabilities
Accrued and other current liabilities consisted of the following:
July 31,
2023
January 31,
2023
(in thousands)
Accrued expenses$62,616 $46,105 
Refundable customer deposits16,276 14,551 
Payroll and related expenses18,085 21,495 
Taxes payable18,620 14,232 
Other liabilities30,128 37,100 
Total Accrued and Other Current Liabilities$145,725 $133,483 

20


ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Revenue
Revenue consisted of the following:
Three Months Ended
July 31,
Six Months Ended
July 31,
2023202220232022
(in thousands)
United States$112,960 $84,610 $210,091 $146,925 
Rest of World37,534 23,682 70,432 43,000 
Total revenue$150,494 $108,292 $280,523 $189,925 
Deferred Revenue
The following table shows the total deferred revenue for each period presented.
July 31,
2023
January 31,
2023
(in thousands)
Deferred revenue219,842 198,610 
The following table shows the revenue recognized that was included in the deferred revenue balance at the beginning of the period.
Three Months Ended
July 31,
Six Months Ended
July 31,
2023202220232022
(in thousands)
Deferred revenue recognized$24,418 $14,736 $50,432 $37,388 
Remaining Performance Obligation
Remaining performance obligations represents the amount of contracted future revenue not yet recognized as the amounts relate to undelivered performance obligations, including both deferred revenue and non-cancellable contracted amounts that will be invoiced and recognized as revenue in future periods. Revenue expected to be recognized from remaining performance obligations was $244.6 million as of July 31, 2023, of which 42% is expected to be recognized over the next twelve months.
7.Debt
2027 Convertible Notes
The following table presents the Company’s convertible debt outstanding:
July 31,
2023
January 31, 2023
(in thousands)
Gross amount$300,000 $300,000 
Debt discount and issuance costs(4,461)(5,064)
Carrying amount$295,539 $294,936 
Estimated fair value (Level 2 Inputs)$227,000 $233,000 
21


ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)

The following table presents the Company’s interest expense related to convertible debt:
Three Months Ended
July 31,
Six Months Ended
July 31,
2023202220232022
(in thousands)
Contractual interest expense$2,625 $2,625 $5,250 $3,500 
Amortization of debt discount and issuance costs301303 603362 
Total interest expense$2,926 $2,928 $5,853 $3,862 

In April 2022, the Company completed a private placement of $300.0 million aggregate principal amount of unsecured Convertible Senior PIK Toggle Notes (the “2027 Convertible Notes”), which will mature on April 1, 2027. The 2027 Convertible Notes were sold in a private placement in reliance on the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) provided by Section 4(a)(2) of the Securities Act.
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. The debt discount and issuance costs, net of accumulated amortization, are reported as a direct deduction from the face amount of the 2027 Convertible Notes. The Company expects to use the net proceeds for general corporate purposes.
The 2027 Convertible Notes bear interest at 3.50% per annum, to the extent paid in cash (“Cash Interest”), and 5.00% per annum, to the extent paid in kind through the issuance of additional 2027 Convertible Notes (“PIK Interest”). Interest is payable semi-annually in arrears on April 1st and October 1st of each year, beginning on October 1, 2022. The Company can elect to make any interest payment through Cash Interest, PIK Interest or any combination thereof.
The 2027 Convertible Notes are convertible, based on the applicable conversion rate, into cash, shares of the Company’s Common Stock or a combination thereof, at the Company’s election. 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.
Prior to January 1, 2027, the 2027 Convertible Notes will be convertible at the option of the holders only upon the occurrence of specified events and during certain periods, and will be convertible on or after January 1, 2027, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date of the 2027 Convertible Notes.
Holders of the 2027 Convertible Notes may convert all or a portion of their 2027 Convertible Notes prior to the close of business on January 1, 2027, only under the following circumstances:
during any calendar quarter commencing after the calendar quarter ending on September 30, 2022, if the Company’s closing Common Stock price for at least 20 trading days out of the most recent 30 consecutive trading days of the preceding calendar quarter is greater than or equal to 130% of the current conversion price of the 2027 Convertible Notes on each applicable trading day;
during the five business days period after any ten consecutive trading days in which, if the trading price per $1,000 principal amount of the 2027 Convertible Notes for each trading day of such ten consecutive trading day period is less than 98% of the product of the Company’s closing Common Stock price and the conversion rate of the 2027 Convertible Notes on each such trading day;
if the Company calls the 2027 Convertible Notes for redemption, at any time prior to the close of business on the second business day immediately preceding the redemption date;
upon the occurrence of specified corporate events, including certain distributions, the occurrence of a fundamental change or a transaction resulting in the Company’s Common Stock converting into other securities or property or assets.
22


ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)

The 2027 Convertible Notes will be redeemable, in whole or in part, at the Company’s option at any time on or after April 21, 2025, and before the 41st scheduled trading day immediately before the maturity date. The redemption price will be equal to the aggregate principal amount of the 2027 Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, a holder may elect to convert its 2027 Convertible Notes during any such redemption period, in which case the applicable conversion rate may be increased in certain circumstances if the 2027 Convertible Notes are converted after they are called for redemption.
Additionally, if the Company undergoes a fundamental change or a change in control transaction (each such term as defined in the indenture governing the 2027 Convertible Notes), subject to certain conditions, holders may require the Company to purchase for cash all or any portion of their 2027 Convertible Notes. The fundamental change repurchase price will be 100% of the capitalized principal amount of the 2027 Convertible Notes, while the change in control repurchase price will be 125% of the capitalized principal amount of the 2027 Convertible Notes to be purchased, in each case plus any accrued and unpaid interest to, but excluding, the repurchase date.
The indenture governing the 2027 Convertible Notes includes a restrictive covenant that, subject to specified exceptions, limits the ability of the Company and its subsidiaries to incur secured debt in excess of $750.0 million. In addition, the indenture governing the 2027 Convertible Notes contains customary terms and covenants, including certain events of default in which case either the trustee or the holders of at least 25% of the aggregate principal amount of the outstanding 2027 Convertible Notes may declare 100% of the principal of, and accrued and unpaid interest, if any, on, all the 2027 Convertible Notes to be due and payable immediately.
As of July 31, 2023, the effective interest rate on the 2027 Convertible Notes was 3.93%. Amortization of debt discount and issuance costs is reported as a component of interest expenses and is computed using the straight-line method over the term of the 2027 Convertible Notes, which approximates the effective interest method.
The estimated fair value of the 2027 Convertible Notes, valued using Level 2 fair value inputs, as of July 31, 2023 and January 31, 2023 was $227.0 million and $233.0 million, respectively.
2027 Revolving Credit Facility
On July 27, 2023, the Company entered into a revolving credit agreement by and among the Company, ChargePoint, Inc. (the “Borrower”), certain subsidiaries of the Borrower as guarantors (the “Subsidiary Guarantors”), JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto (the “Credit Agreement”). The Credit Agreement provides for senior secured revolving credit facility in an initial aggregate principal amount of up to $150.0 million, with a maturity date of January 1, 2027 (the “2027 Revolving Credit Facility”). Pursuant to the Credit Agreement, the Borrower may from time to time arrange for one or more increases in the commitments under the 2027 Revolving Credit Facility in an aggregate principal amount not to exceed $150 million, subject to obtaining the consent of the lenders participating in any such increase. Up to $100.0 million of the 2027 Revolving Credit Facility may be used for the issuance of letters of credit.
The obligations of the Borrower under the Credit Agreement are guaranteed by the Company and the Subsidiary Guarantors and secured by a first priority pledge of the equity securities of the Borrower and certain of its subsidiaries and first priority security interests in substantially all tangible and intangible personal property, including intellectual property, of the Company, the Borrower and each Subsidiary Guarantor, subject to customary exceptions and limitations.

The Credit Agreement contains negative covenants that, among other things, restrict the ability of the Company, the Borrower and its subsidiaries, as applicable, to incur additional indebtedness, incur additional liens, make investments or acquisitions, make dividends, distributions, or other restricted payments, dispose of property, and enter into transactions with affiliates, in each case subject to certain dollar baskets and customary carveouts, as well as customary events of default. In addition, the Credit Agreement requires the Borrower to comply with a minimum total liquidity covenant (“Total Liquidity”) which requires the Borrower to maintain, at all times, Total Liquidity equal to the sum of cash and cash equivalents held by the Borrower and the other loan parties at controlled accounts with the initial lenders under the Credit Agreement plus the aggregate unused amount of the commitments then available to be drawn under the 2027 Revolving Credit Facility.
Borrowings under the 2027 Revolving Credit Facility may be denominated in U.S. dollars, Euros, or Pound Sterling. At the Company’s option, borrowings may bear interest at a rate per annum equal to either (a) an alternate base rate (for borrowings in U.S. dollars) plus a rate per annum of 1.75%, (b) an adjusted SOFR term rate (for borrowings in U.S. dollars)
23


ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)

plus a rate per annum of 2.75%, (c) an adjusted EURIBOR rate (for borrowings in Euros) plus a rate per annum of 2.75%, or (d) a daily simple “risk-free” rate (for borrowings in Pounds Sterling) plus a rate per annum of 2.75%.
The Company will pay commitment fees on the average daily unused amount of the 2027 Revolving Credit Facility at a rate per annum of 0.40%. In addition, the Company will also pay participation fees on the average daily undrawn amount of outstanding letters of credit at a rate per annum of 2.25%.
As of July 31, 2023, the Borrower had no borrowings outstanding under the 2027 Revolving Credit Facility. The Borrower also had no letters of credit outstanding under the Credit Agreement as of July 31, 2023 and, as a result, had a borrowing capacity of up to $150.0 million.
8.Commitments and Contingencies
Purchase Commitments
Open purchase commitments are for the purchase of goods and services related to, but not limited to, manufacturing, facilities and professional services under non-cancellable contracts. No open purchase commitments were recorded as liabilities on the condensed consolidated balance sheets as of July 31, 2023 as the Company had not yet received the related goods or services.
Legal Proceedings
The Company may be involved in various lawsuits, claims, and proceedings, including intellectual property, commercial, securities, and employment matters that arise in the normal course of business. The Company accrues a liability when management believes information available prior to the issuance of the condensed consolidated financial statements indicates it is probable a loss has been incurred as of the date of the condensed consolidated financial statements and the amount of loss can be reasonably estimated. The Company adjusts its accruals to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case. Legal costs are expensed as incurred.
The Company believes it has recorded adequate provisions for any such lawsuits, claims, and proceedings and, as of July 31, 2023, the Company believes it was not reasonably possible that a material loss had been incurred in excess of the amounts recognized in the condensed consolidated financial statements. Based on its experience, the Company believes that damage amounts claimed in these matters are not meaningful indicators of potential liability. Given the inherent uncertainties of litigation, the ultimate outcome of the ongoing matters described herein cannot be predicted with certainty. While litigation is inherently unpredictable, the Company believes it has valid defenses with respect to the legal matters pending against it. Nevertheless, the Company’s results of operations, cash flows and financial condition could be materially adversely affected in a particular period by the resolution of one or more of these contingencies. Liabilities established to provide for contingencies are adjusted as further information develops, circumstances change, or contingencies are resolved; and such changes are recorded in the accompanying condensed consolidated statements of operations during the period of the change and reflected in accrued and other current liabilities on the accompanying condensed consolidated balance sheets.
Guarantees and Indemnifications
The Company has service level commitments to certain of its customers warranting levels of uptime reliability and performance and permitting those customers to receive credits if the Company fails to meet those levels. To date, the Company has not incurred any material costs as a result of such commitments.
The Company’s arrangements generally include certain provisions for indemnifying customers against liabilities if its products or services infringe a third-party’s intellectual property rights. Additionally, the Company may be required to indemnify for claims caused by its negligence or willful misconduct. It is not possible to determine the maximum potential amount under these indemnification obligations due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. To date, the Company has not incurred any material costs as a result of such obligations and has not accrued any liabilities related to such obligations in the condensed consolidated financial statements.
24


ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)

The Company has also agreed to indemnify its directors and executive officers for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred by them in any action or proceeding to which any of them are, or are threatened to be, made a party by reason of their service as a director or officer. The Company maintains director and officer insurance coverage that would generally enable it to recover a portion of any future amounts paid. The Company also may be subject to indemnification obligations by law with respect to the actions of its employees under certain circumstances and in certain jurisdictions.
Letters of Credit
The Company had $30.4 million of secured letters of credit outstanding as of both July 31, 2023 and January 31, 2023. These primarily relate to support of contract manufacturer and customer agreements, and are fully collateralized by cash deposits which the Company recorded in restricted cash on its condensed consolidated balance sheets based on the term of the remaining restriction.
Leases
The Company leases its office facilities under non-cancelable operating leases with various lease terms. The Company also leases certain office equipment under operating lease agreements.
The following table presents future payments of lease liabilities under the Company's non-cancelable operating leases as of July 31, 2023 (in thousands):
(in thousands)
2024 (remaining six months)$3,532 
20256,220 
20265,016 
20274,710 
20284,103 
Thereafter6,252 
Total undiscounted operating lease payments29,833 
Less: imputed interest(6,028)
Total operating lease liabilities23,805 
Less: current portion of operating lease liabilities(4,261)
Operating lease liabilities, noncurrent$19,544 

9.Common Stock
As of July 31, 2023 and January 31, 2023, the Company was authorized to issue 1,000,000,000 shares of Common Stock, with a par value of $0.0001 per share. There were 359,792,252 and 348,330,481 shares issued and outstanding as of July 31, 2023 and January 31, 2023, respectively.
At-the-Market Offering
On July 1, 2022, ChargePoint filed a registration statement on Form S-3 (File No. 333-265986) with the SEC (that was declared effective by the SEC on July 12, 2022), which permits the Company to offer up to $1.0 billion of Common Stock, preferred stock, debt securities, warrants and rights in one or more offerings and in any combination, including in units from time to time (the “Shelf Registration Statement”). As part of the Shelf Registration Statement, ChargePoint filed a prospectus supplement registering for sale from time to time up to $500.0 million of Common Stock pursuant to a sales agreement (the “ATM Facility”).
During the three months ended July 31, 2023, the Company sold a total of 4,076,072 shares of its Common Stock pursuant to the ATM Facility at the prevailing market prices for total proceeds of $37.3 million, net of $0.4 million of issuance costs. During the six months ended July 31, 2023, the Company sold a total of 5,985,100 shares of its Common Stock pursuant to the ATM Facility at the prevailing market prices for total proceeds of $54.8 million, net of $0.6 million of issuance costs.
25


ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)

As of July 31, 2023, $394.6 million of shares of Common Stock remained available for sale pursuant to the ATM Facility.
10.Stock Warrants
Common Stock Warrants
Legacy ChargePoint had outstanding warrants to purchase shares of Legacy ChargePoint common stock (collectively, “Legacy Warrants”), which now represent warrants to purchase Common Stock. As of July 31, 2023, there were 34,499,436 Legacy Warrants outstanding, which are classified as equity.
There was no Legacy Warrants activity during the three and six months ended July 31, 2023.
There was no Legacy Warrants activity during the three months ended July 31, 2022. During the six months ended July 31, 2022, 14,568 Legacy Warrants were exercised resulting in the issuance of 13,223 shares of Common Stock. There were no cash proceeds received for the exercise of Legacy Warrants.
Activity of Legacy Warrants is set forth below:
 Legacy Warrants
Outstanding as of January 31, 202334,499,436 
Warrants exercised
Outstanding as of July 31, 202334,499,436
Private Placement Warrants
The Private Placement Warrants were initially recognized as a liability, and remeasured to fair value as of any respective exercise dates. On February 21, 2022, the Company redeemed the remaining Private Placement Warrants for 0.355 shares of Common Stock per warrant, resulting in the Company recording no gain or loss and an immaterial loss for the three and six months ended July 31, 2022, respectively. No Private Placement Warrants have been outstanding since April 30, 2022.
11.Equity Plans and Stock-based Compensation
The following sets forth the total stock-based compensation expense for employee equity plans included in the Company’s condensed consolidated statements of operations:

Three Months Ended
July 31,
Six Months Ended
July 31,
2023202220232022
(in thousands)
Cost of revenue$1,938 $1,341 $2,933 $2,126 
Research and development15,847 11,420 25,353 17,398 
Sales and marketing6,757 5,285 10,926 7,831 
General and administrative10,557 8,373 19,851 14,591 
Total stock-based compensation expense$35,099 $26,419 $59,063 $41,946 
As of July 31, 2023, the Company had unrecognized stock-based compensation expense related to stock options, RSUs and PRSUs (as defined below), and 2021 ESPP (as defined below) of $228.5 million, which is expected to be recognized over a weighted-average period of 2.97 years.
26


ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)

2021 Employee Stock Purchase Plan
The 2021 Employee Stock Purchase Plan (“2021 ESPP”) permits participants to purchase shares of the Company’s Common Stock at a discounted price through payroll deductions. As of July 31, 2023, 13,842,252 shares of Common Stock were available under the 2021 ESPP.
2021 Equity Incentive Plan
The 2021 Equity Incentive Plan (“2021 EIP”) allows the Company to grant stock options, stock appreciation rights, restricted stock units (“RSUs”), performance restricted stock units (“PRSUs”), and certain other awards. As of July 31, 2023, 44,405,539 shares of Common Stock were available under the 2021 EIP.
There were no options granted for the three and six months ended July 31, 2023.
Restricted Stock Units
A summary of RSUs outstanding under the 2021 EIP as of July 31, 2023 and changes during the fiscal year-to-date period then ended is presented in the following table:
 Number of SharesWeighted Average Grant Date Fair Value per Share
Outstanding as of January 31, 202312,935,413 $15.02 
RSU granted13,600,840 $8.68 
RSU vested(2,813,610)$14.37 
RSU forfeited(959,444)$13.97 
Outstanding as of July 31, 202322,763,199 $11.36 
Performance Restricted Stock Units
A summary of PRSUs outstanding under the 2021 EIP as of July 31, 2023 and changes during the fiscal year-to-date period then ended is presented in the following table:
 Number of SharesWeighted Average Grant Date Fair Value per Share
Outstanding as of January 31, 20232,147,366 $10.83 
PRSUs granted60,892 $8.21 
PRSU forfeited(143,266)$10.47 
Outstanding as of July 31, 20232,064,992 $10.77 
2017 Plan and 2007 Plan
In fiscal year 2022, the Company terminated its 2017 Stock Option Plan (the “2017 Plan”) and 2007 Stock Option Plan (the “2007 Plan”).
27


ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)

A summary of options outstanding under the 2017 Plan and 2007 Plan as of July 31, 2023 and changes during the fiscal year-to-date period then ended is presented in the following table:
 Number of Stock Option AwardsWeighted Average Exercise PriceWeighted Average Remaining Contractual term (in years)Aggregate Intrinsic Value (in thousands)
Outstanding as of January 31, 202317,600,524 $0.70 5.6$201,352 
Options exercised(2,103,163)$0.64 
Options cancelled(130,985)$0.77 
Outstanding as of July 31, 202315,366,376 $0.71 5.4$122,193 
Options vested and expected to vest as of July 31, 202315,363,337 $0.71 5.4$122,169 
Exercisable as of July 31, 202313,120,974 $0.70 5.1$104,454 
12.Income Taxes
The income tax provision for interim periods is determined using an estimate of the Company’s annual effective tax rate as adjusted for discrete items arising in that quarter. The effective income tax rate was (0.7)% and 0.4% for the three months ended July 31, 2023 and 2022, respectively. The effective income tax rate was (0.2)% and 1.2% for the six months ended July 31, 2023 and 2022, respectively. The effective tax rate differs from the U.S. statutory rate primarily due to the full valuation allowances on the Company’s net domestic deferred tax assets as it is more likely than not that all of the deferred tax assets will not be realized.
13.Basic and Diluted Net Loss per Share
The following table sets forth the computation of the Company’s basic and diluted net loss per share attributable to common stockholders for the three and six months ended July 31, 2023 and 2022:
Three Months Ended
July 31,
Six Months Ended
July 31,
2023202220232022
(in thousands, except share and per share data)
Numerator:
Net loss$(125,255)$(92,700)$(204,643)$(181,966)
Denominator:
Weighted average common shares outstanding355,893,921 336,911,941 353,031,968 335,845,756 
Less: Weighted average unvested restricted shares and shares subject to repurchase
(17,114)(98,386)(23,495)(108,984)
Weighted average shares outstanding - Basic and Diluted355,876,807 336,813,555 353,008,473 335,736,772 
Net loss per share - Basic and Diluted$(0.35)$(0.28)$(0.58)$(0.54)
28


ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)

The potential shares of Common Stock that were excluded from the computation of diluted net loss per share attributable to common stockholders at each period end because including them would have had an antidilutive effect were as follows:
July 31,
2023
July 31,
2022
2027 Convertible Notes (on an as-converted basis)12,483,569 12,483,569 
Options to purchase common stock15,366,376 19,280,776 
Restricted stock units22,763,199 13,377,719 
Unvested early exercised common stock options12,178 89,877 
Common stock warrants34,499,436 35,524,021 
Employee stock purchase plan2,739,885 1,739,928 
Total potentially dilutive common share equivalents87,864,643 82,495,890 
PRSUs granted were excluded from the above table because the respective stock price targets have not been met as of July 31, 2023.
14.Subsequent Events
On September 6, 2023, the Company announced the reorganizing of its operations including a reduction of the Company's current global workforce by approximately 10% (the “Reorganization”). The Reorganization is expected to lead to approximately $8.0 million in charges, consisting primarily of severance benefits and facility-related expenses. The Company expects that most of these charges will be cash expenditures and that it will recognize these charges primarily during its fiscal third quarter.
The estimates of the charges and expenditures that the Company expects to incur in connection with the Reorganization, and the timing thereof, are subject to a number of assumptions, including local law requirements in various jurisdictions, and actual amounts may differ materially from estimates. In addition, the Company may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur, including in connection with the implementation of the Reorganization.

29



ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of the financial condition and results of operations of ChargePoint Holdings, Inc. (“ChargePoint” or the “Company”) should be read in conjunction with ChargePoint’s condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report, and the audited consolidated financial statements for the year ended January 31, 2023 and related notes included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on April 3, 2023. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. ChargePoint’s actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” in Part II, Item 1A of this Quarterly Report.
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. ChargePoint’s Networked Charging Systems, subscriptions and other offerings provide an open platform that integrates with system hardware from ChargePoint and other manufacturers, connecting systems over an intelligent network that provides real-time information about charging sessions and full control, support and management of the Networked Charging Systems. This network provides multiple web-based portals for charging system owners, fleet managers, drivers and utilities.
ChargePoint generates revenue primarily through the sale of Networked Charging Systems, Cloud Services and extended parts and labor warranties (“Assure”). 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”). Each of Cloud Services, Assure and CPaaS is typically paid for upfront and revenue is recognized ratably over the term of the subscription period.
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. 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. (“Legacy ChargePoint”) pursuant to a Merger Agreement and Plan of Merger dated as of September 23, 2020, by and among the Company, Lightning Merger Sub, and Switchback (“Merger Agreement”). Legacy ChargePoint survived as a wholly-owned subsidiary of Switchback (“Merger” and, collectively with the other transactions described in the Merger Agreement, the “Reverse Recapitalization”). Further, as a result of the Merger, Switchback was renamed “ChargePoint Holdings, Inc.”
Since its inception in 2007, ChargePoint has been engaged in developing and marketing its Networked Charging Systems, subscriptions and other offerings, raising capital and recruiting personnel. ChargePoint has incurred net operating losses and negative cash flows from operations in every year since its inception. As of July 31, 2023, ChargePoint had an accumulated deficit of $1,361.4 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.
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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 EV charging infrastructure. 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. 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. In addition, macroeconomic factors, including governmental mandates and incentives and the impact of rising interest rates, inflation and a potential economic recession, could impact demand for EVs, particularly since they can be more expensive to purchase than traditional gasoline-powered vehicles. Further, geopolitical factors, such as the ongoing conflict between Russia and Ukraine, 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. 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. 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. 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 materially and adversely impacted. Furthermore, ChargePoint’s success could be negatively impacted if consumers and businesses choose other types of alternative fuel vehicles or high fuel-economy gasoline powered vehicles.
Europe Expansion
ChargePoint operates in North America and several countries in Europe. Europe is expected to be a significant contributor to ChargePoint’s revenue in future years. 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”) (each as described in Note 3, Business Combinations, to ChargePoint’s notes to the condensed consolidated financial statements). In Europe, ChargePoint primarily competes with other providers of EV charging station networks. Many of these competitors have limited funding, which could cause poor customer experiences and have a negative impact on overall EV adoption in Europe. ChargePoint’s growth in Europe requires differentiating itself as compared to these existing competitors. If ChargePoint is unable to continue penetrating the market in Europe, its financial condition and results of operations could be materially and adversely impacted.
Fleet Expansion
ChargePoint’s future growth is also highly dependent upon 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. Any significant decline in purchases from these customers or increased competition for these customers may have an adverse impact on ChargePoint’s potential for future growth. If ChargePoint is not successful in the fleet vertical, its financial condition and results of operations could be materially and adversely affected.
Impact of New Product Releases and Investments in Growth
As ChargePoint introduces new products, such as the release of its Express Plus DC fast charger in fiscal year 2022 and CP6000 Level 2 AC charger in fiscal year 2023, its gross margins may be initially negatively impacted by launch costs and lower volumes until it achieves targeted cost reductions. Cost reductions may not occur on the timeline ChargePoint expects due to a number of factors, including but not limited to failure to meet its own estimates, unanticipated supply chain difficulties, government mandates or certification requirements. In addition, ChargePoint may accelerate its expenditures where it sees
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growth opportunities, which may negatively impact gross margin until upfront costs and inefficiencies are absorbed and normalized operations are achieved. 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 puts pressure on gross margins and increases operating expenses. ChargePoint also continuously evaluates and may adjust its expenditures, such as new product introduction costs, based on its launch plans for new products, as well as other factors including the pace and prioritization of current projects under development and the addition of new projects. 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.
Government Mandates, Incentives and Programs
The U.S. federal government, certain foreign governments and some state and local governments provide incentives to end users and purchasers of EVs and EV infrastructure in the form of rebates, tax credits and other financial incentives. These governmental rebates, tax credits and other financial incentives significantly lower the effective price of EVs and EV infrastructure to customers. For example, the Infrastructure Investment and Jobs Act signed into law on November 15, 2021 (the “Jobs Act”) provided additional funding for EVs and EV charging infrastructure through the creation of new programs and grants and the expansion of existing programs, including $7.5 billion for EV charging along highway corridors and communities. In addition, the Inflation Reduction Act of 2022 (the “IRA”) signed into law on August 16, 2022 includes incentives and tax credits aimed at reducing the effects of climate change, such as the extension of electric vehicle charging infrastructure tax credits under Section 30C and tax credits for electric vehicles under Section 30D of the Internal Revenue Code of 1986, as amended (the “Code”) through 2032. 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. These incentives may also expire on specified dates, end when the allocated funding is no longer available, or be reduced or terminated as a matter of regulatory or legislative policy. Any reduction in rebates, tax credits or other financial incentives could reduce the demand for EVs and for charging infrastructure, including infrastructure ChargePoint offers.
ChargePoint also derives other revenue from fees received for regulatory incentives earned for participating in low carbon fuel programs in some U.S. states. ChargePoint claims these incentives only if they are not claimed by purchasers of its EV charging stations. If a material percentage of its customers were to claim these incentives, ChargePoint’s revenue from this source could decline significantly, which could have an adverse effect on its revenue and overall gross margin. Prior to fiscal year 2021, ChargePoint derived a slight majority of its other revenue from these incentives. However, revenue from this source as a percentage of total revenue has declined since fiscal 2021 and may continue to decline as a percentage of total revenue going forward. Further, the availability of such incentives depends on continued governmental support for these programs. If these programs are modified, reduced or eliminated, ChargePoint’s ability to generate this revenue in the future would be adversely impacted.
Macroeconomic Trends
ChargePoint has an international presence and as a result is subject to risks and uncertainties caused by significant events with macroeconomic impacts, including, but not limited to geopolitical events, including the ongoing Russia-Ukraine conflict, rising inflation and interest rates, monetary policy changes, financial services sector instability, recessions, global pandemics and foreign currency fluctuations. Additionally, these macroeconomic impacts have generally disrupted the operations of our customers and prospective customers. For instance, more permanent work-from-home policies, initially caused by the COVID-19 pandemic, are likely to continue affecting the rate of global infrastructure spending, and thus to continue to adversely impact ChargePoint’s commercial business and its overall gross margin as ChargePoint’s commercial business contributes higher margins than its residential and fleet businesses. In addition, ChargePoint has recently experienced a product shift in favor of DC fast chargers which are predominately used in fast urban charging, corridor or long-trip charging relative to the sales of its AC chargers, as states, municipalities and fleets prepare for the transition to electrification. Shifts in ChargePoint’s product mix to DC chargers from AC chargers may negatively affect ChargePoint’s gross profits and gross margins since ChargePoint generally realizes higher gross margins from sales of its AC chargers. 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.
Global economic uncertainty due to other macroeconomic conditions, including inflation, interest rate pressures, disruptions to and credit constraints in the financial services industry, labor market disruptions, and related concerns of a
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potential recession, have impacted customer behavior related to discretionary spending and sentiment and could continue to impact such behaviors in the future. 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.
Results of Operations and 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, as well as fees received for transferring regulatory incentives earned for participating in low carbon fuel programs. 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 net of fees and regulatory incentives earned by site hosts when the regulatory incentives are transferred.
Subscriptions
Subscriptions revenue consists of services related to Cloud Services, as well as extended maintenance service plans under Assure. Subscriptions revenue also consists of CPaaS revenue which combines the customer’s use of ChargePoint’s owned and operated Networked Charging Systems with Cloud and Assure programs into a single, typically multi-year subscription.
In some instances, CPaaS subscriptions are considered for accounting purposes to contain a lease for the customer’s use of ChargePoint’s owned and operated Networked Charging Systems unless the location allows the customer to receive incremental economic benefit from regulatory credits earned on that Networked Charging System. Lessor revenue relates to operating leases and historically has not been material. Subscriptions revenue is generally recognized over time on a straight-line basis as ChargePoint has an ongoing obligation to deliver such services to the customer.
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. 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. Revenue from professional services is recognized as the services are rendered.
For the remainder of fiscal year 2024, ChargePoint expects revenue to grow in both Networked Charging Systems and subscriptions due to increased demand in EVs and the related charging infrastructure market.
July 31,
Networked Charging Systems20232022Change
(dollar amounts in thousands)
Three months ended$114,574 $84,148 $30,426 36.2 %
Percentage of total revenue76.1 %77.7 %
Six months ended$212,894 $143,699 $69,195 48.2 %
Percentage of total revenue75.9 %75.7 %
Networked Charging Systems revenue increased during the three and six months ended July 31, 2023 compared to the three and six months ended July 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.
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July 31,
Subscriptions20232022Change
(dollar amounts in thousands)
Three months ended$30,011 $20,244 $9,767 48.2 %
Percentage of total revenue19.9 %18.7 %
Six months ended$56,376 $37,890 $