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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 2022
OR
o TRANSITION 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)
Delaware 84-1747686
(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 filer x Accelerated filer o
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 336,962,739 shares of common stock as of May 31, 2022.


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”). All statements, other than statements of present or historical fact included in this Quarterly Report, regarding the future financial performance of ChargePoint Holdings, Inc. (“ChargePoint” or the “Company”), as well as ChargePoint’s strategy, future operations, future operating results, financial position, expectations regarding revenue, losses, and costs, margins, prospects, plans and objectives of management 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 the negative of such terms and other similar expressions that predict or indicate future events or trends or that are not statements of 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’s success in retaining or recruiting, or changes in, its officers, key employees or directors;
changes in applicable laws or regulations;
the impact of the coronavirus (“COVID-19”) pandemic on the overall economy and ChargePoint’s results of operations, financial position and cash flows;
supply chain disruptions, delays, component shortages and expense increases, including those contributed by the ongoing COVID-19 pandemic and conflict between the Ukraine and Russia may adversely affect our sales, revenue and gross margins;
delays in new product introductions;
ChargePoint’s ability to expand its business in Europe;
ChargePoint’s ability to integrate newly acquired assets and businesses into ChargePoint’s own business and the expected benefits from newly acquired assets to ChargePoint, its customers and its market position;
the electric vehicle (“EV”) market may not grow as expected;
ChargePoint may not attract a sufficient number of 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 this source;
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the impact of competing technologies or technological changes could reduce the demand for EVs or otherwise adversely affect 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;
the possibility that ChargePoint may be adversely affected by other economic, business or competitive factors; and
any further changes to ChargePoint’s financial statements that may be required due to the U.S. Securities and Exchange Commission (“SEC”) comments to the Form 10-K, or further guidance regarding the accounting treatment of the Public Warrants and the Private Placement Warrants (each as defined below), and the quantitative effects of the restatement of Switchback Energy Acquisition Corporation’s (“Switchback”) consolidated historical financial statements.
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.

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ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

5


ChargePoint Holdings, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data, unaudited)
April 30,
2022
January 31,
2022
Assets
Current assets:
Cash and cash equivalents $ 540,583  $ 315,235 
Restricted cash 400  400 
Accounts receivable, net of allowance of $7,522 as of April 30, 2022 and $5,584 as of January 31, 2022
79,855  75,939 
Inventories 45,305  35,879 
Prepaid expenses and other current assets 46,086  36,603 
Total current assets 712,229  464,056 
Property and equipment, net 35,196  34,593 
Intangible assets, net 99,719  107,209 
Operating lease right-of-use assets 23,970  25,535 
Goodwill 209,927  218,484 
Other assets 6,275  6,020 
Total assets $ 1,087,316  $ 855,897 
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable 35,350  27,576 
Accrued and other current liabilities 95,596  84,328 
Deferred revenue 81,881  77,142 
Total current liabilities 212,827  189,046 
Deferred revenue, noncurrent 75,610  69,666 
Debt, noncurrent 294,070  — 
Operating lease liabilities 24,034  25,370 
Deferred tax liabilities 14,597  17,697 
Other long-term liabilities 1,086  7,104 
Total liabilities 622,224  308,883 
Commitments and contingencies (Note 8)
Stockholders’ equity (deficit):
Common stock: $0.0001 par value; 1,000,000,000 shares authorized as of April 30, 2022 and January 31, 2022; 336,672,629 and 334,760,615 shares issued and outstanding as of April 30, 2022 and January 31, 2022, respectively
34  33 
Preferred stock, $0.0001 par value; 10,000,000 shares authorized as of April 30, 2022 and January 31, 2022; 0 issued and outstanding as of April 30, 2022 and January 31, 2022
—  — 
Additional paid-in capital 1,387,139  1,366,855 
Accumulated other comprehensive income (loss) (21,160) (8,219)
Accumulated deficit (900,921) (811,655)
Total stockholders’ equity 465,092  547,014 
Total liabilities and stockholders’ equity $ 1,087,316  $ 855,897 
    
The accompanying notes are an integral part of these condensed consolidated financial statements.
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ChargePoint Holdings, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share data, unaudited)
Three Months Ended
April 30
2022 2021
Revenue
Networked charging systems $ 59,551  $ 26,800 
Subscriptions 17,646  10,824 
Other 4,436  2,886 
Total revenue 81,633  40,510 
Cost of revenue
Networked charging systems 56,266  23,742 
Subscriptions 10,628  5,640 
Other 2,632  1,911 
Total cost of revenue 69,526  31,293 
Gross profit 12,107  9,217 
Operating expenses
Research and development 48,302  25,374 
Sales and marketing 32,588  15,974 
General and administrative 21,047  14,467 
Total operating expenses 101,937  55,815 
Loss from operations (89,830) (46,598)
Interest income 106  22 
Interest expense (933) (1,499)
Change in fair value of redeemable convertible preferred stock warrant liability —  9,237 
Change in fair value of common stock warrant liabilities (24) 43,761 
Change in fair value of contingent earnout liability —  84,420 
Transaction costs expensed —  (7,031)
Other (expense) income, net (447) 15 
Net income (loss) before income taxes (91,128) 82,327 
Provision for (benefit from) income taxes (1,862) 38 
Net income (loss) $ (89,266) $ 82,289 
Cumulative dividends on redeemable convertible preferred stock —  (4,292)
Deemed dividends attributable to vested option holders —  (51,855)
Deemed dividends attributable to common stock warrant holders —  (110,635)
Net loss attributable to common stockholders - Basic $ (89,266) $ (84,493)
Gain attributable to earnout shares issued —  (53,820)
Change in fair value of dilutive warrants —  (49,471)
Net loss attributable to common stockholders - Diluted $ (89,266) $ (187,784)
Weighted average shares outstanding - Basic 334,623,695  218,615,863 
Weighted average shares outstanding - Diluted 334,623,695  225,533,389 
Net loss per share - Basic $ (0.27) $ (0.39)
Net loss per share - Diluted $ (0.27) $ (0.83)
The accompanying notes are an integral part of these condensed consolidated financial statements.
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ChargePoint Holdings, Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(in thousands, unaudited)
Three Months Ended,
April 30
2022 2021
Net income (loss) $ (89,266) $ 82,289 
Other comprehensive income (loss):
Foreign currency translation adjustment (12,941)
Other comprehensive (loss) income (12,941)
Comprehensive income (loss) $ (102,207) $ 82,296 

The accompanying notes are an integral part of these condensed consolidated financial statements.
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ChargePoint Holdings, Inc.
Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)
(unaudited)

Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ (Deficit) Equity
  Shares Amount
  (in thousands, except share data)
Balances as of January 31, 2022 334,760,615  $ 33  $ 1,366,855  $ (8,219) $ (811,655) $ 547,014 
Issuance of common stock under stock plans, net of tax withholding 1,631,104  772  —  —  773 
Issuance of common stock upon exercise of warrants
16,948  —  48  —  —  48 
Issuance of common stock upon ESPP purchase
263,962  —  3,920  —  —  3,920 
Vesting of early exercised stock options —  —  17  —  —  17 
Stock-based compensation —  —  15,527  —  —  15,527 
Net income —  —  —  —  (89,266) (89,266)
Other comprehensive income (loss) —  —  —  (12,941) —  (12,941)
Balances as of April 30, 2022 336,672,629  $ 34  $ 1,387,139  $ (21,160) $ (900,921) $ 465,092 

Redeemable Convertible Preferred Stock Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Deficit
 
Shares(1)
Amount
Shares(1)
Amount
    (in thousands, except share data)
Balances as of January 31, 2021 182,934,257  $ 615,697  22,961,032  $ $ 62,736  $ 155  $ (679,414) $ (616,521)
Conversion of redeemable convertible preferred stock into common stock in connection with the reverse recapitalization, including impact of Series H-1 paid in kind dividend (182,934,257) (615,697) 194,060,336  20  615,677  —  —  615,697 
Reclassification of Legacy ChargePoint preferred stock warrant liability upon the reserve capitalization —  —  —  —  66,606  —  —  66,606 
Issuance of common stock upon the reverse recapitalization, net of issuance costs —  —  60,746,989  200,460  —  —  200,466 
Issuance of common stock upon exercise of warrants —  —  9,766,774  225,375  —  —  225,376 
Contingent earnout liability recognized upon
the closing of the reverse recapitalization
—  —  —  —  (828,180) —  —  (828,180)
Issuance of earnout shares upon triggering events, net of tax withholding —  —  17,539,657  488,303  —  —  488,305 
Reclassification of remaining contingent earn-out liability upon triggering event —  —  —  —  242,640  —  —  242,640 
Vesting of early exercised stock options —  —  —  —  78  —  —  78 
Repurchase of early exercised common stock —  —  (1,588) —  —  —  —  — 
Stock-based compensation —  —  —  —  7,577  —  —  7,577 
Net loss —  —  —  —  —  —  82,289  82,289 
Other comprehensive income —  —  —  —  —  — 
Balances as of April 30, 2021   $   305,073,200  $ 31  $ 1,081,272  $ 162  $ (597,125) $ 484,340 

(1)The shares of the Company’s common and redeemable convertible preferred stock prior to the Merger (as defined in Note 1) have been retroactively restated to reflect the exchange ratio of approximately 0.9966 established in the Merger as described in Note 1.

The accompanying notes are an integral part of these condensed consolidated financial statements.
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ChargePoint Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
Three Months Ended
April 30,
2022 2021
(in thousands)
Cash flows from operating activities
Net income (loss) $ (89,266) $ 82,289 
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 6,220  2,741 
Non-cash operating lease cost 1,224  977 
Stock-based compensation 15,527  7,577 
Amortization of deferred contract acquisition costs 538  399 
Change in fair value of redeemable convertible preferred stock warrant liability —  (9,237)
Change in fair value of common stock warrant liabilities 24  (43,761)
Change in fair value of contingent earnout liability —  (84,420)
Transaction costs expensed —  7,031 
Other 300  1,096 
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable, net (5,941) 32 
Inventories (9,832) 4,894 
Prepaid expenses and other assets (10,299) (6,166)
Operating lease liabilities (1,166) (373)
Accounts payable 2,757  (3,463)
Accrued and other liabilities 8,410  (4,952)
Deferred revenue 10,683  7,797 
Net cash used in operating activities (70,821) (37,539)
Cash flows from investing activities
Purchases of property and equipment (3,190) (4,138)
Cash paid for acquisitions, net of cash acquired (2,756) — 
Net cash used in investing activities (5,946) (4,138)
Cash flows from financing activities
Proceeds from the exercise of warrants —  73,323 
Proceeds from issuance of debt, net of discount and issuance costs 296,037  — 
Merger and PIPE financing —  511,646 
Payments of transaction costs related to Merger —  (30,115)
Payment of tax withholding obligations on settlement of earnout shares —  (12,815)
Repayment of borrowings —  (36,051)
Proceeds from the issuance of common stock under employee equity plans, net of tax withholding 4,690  — 
Change in driver funds and amounts due to customers 2,391  — 
Net cash provided by financing activities 303,118  505,988 
Effect of exchange rate changes on cash, cash equivalents, and restricted cash (1,003)
Net increase in cash, cash equivalents, and restricted cash 225,348  464,318 
Cash, cash equivalents, and restricted cash at beginning of period 315,635  145,891 
Cash, cash equivalents, and restricted cash at end of period $ 540,983  $ 610,209 
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ChargePoint Holdings, Inc.
Condensed Consolidated Statements of Cash Flows - (continued)
Three Months Ended April 30, 2022 and 2021
(unaudited)

Three Months Ended
April 30,
2022 2021
(in thousands)
Supplementary cash flow information
Cash paid for interest $ —  $ 344 
Cash paid for taxes $ 113  $ 50 
Supplementary cash flow information on noncash investing and financing activities
Right-of-use assets obtained in exchange for lease liabilities $ —  $ 883 
Deferred transaction costs not yet paid $ —  $ 2,354 
Acquisitions of property and equipment included in accounts payable and accrued and other current liabilities $ 1,433  $ 174 
Vesting of early exercised stock options $ 17  $ 78 
Conversion of redeemable convertible preferred stock into common stock in connection with the reverse recapitalization $ —  $ 615,697 
Reclassification of Legacy ChargePoint redeemable convertible preferred stock warrant liability upon the reverse capitalization $ —  $ 66,606 
Contingent earnout liability recognized upon the closing of the reverse recapitalization
$ —  $ 828,180 
Reclassification of remaining contingent earnout liability upon triggering event
$ —  $ 242,640 
Unpaid debt issuance costs $ 2,025  $ — 

The accompanying notes are an integral part of these condensed consolidated financial statements.
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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 consumers the ability 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 parts and labor 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 2022 relate to the fiscal year ended January 31, 2022 and to fiscal year 2023 refer to the fiscal year ending January 31, 2023.
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, 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on April 4, 2022, which provides a more complete discussion of the Company’s accounting policies and certain other information. The information as of January 31, 2022, 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 April 30, 2022, and the results of operations for the three months ended April 30, 2022 and 2021, and cash flows for the three months ended April 30, 2022 and 2021. The results of operations for the three months ended April 30, 2022, are not necessarily indicative of the results that may be expected for the year ending January 31, 2023.
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 product offerings, raising capital and recruiting personnel. The Company’s operating plan may change as a result of many factors currently unknown and there can be no assurance that the current operating plan will be achieved at the levels or in the time frame anticipated by the Company, and it may need to seek additional funds sooner than planned. If adequate funds are not available to the Company on a timely basis, it may be required to delay, limit, reduce, or terminate certain commercial efforts, or to pursue merger or acquisition strategies, all of which could adversely affect the holdings or the rights of the Company’s stockholders. The Company has incurred net operating losses and negative cash flows from operations every year since inception and expects this to continue for the foreseeable future. As of April 30, 2022, the Company had an accumulated deficit of $900.9 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 and proceeds from the Reverse Recapitalization (as defined below). The Company had cash, cash equivalents and restricted cash of $541.0 million as of April 30, 2022. As of June 7, 2022, the date on which these condensed consolidated financial statements
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ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
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.
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, its business, operating results and financial condition would be adversely affected.
Reverse Recapitalization
On February 26, 2021, Lightning Merger Sub, a wholly-owned subsidiary of Switchback, merged with 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, Legacy ChargePoint’s outstanding series of redeemable convertible preferred stock were converted to Legacy ChargePoint common stock, which then converted to Common Stock.
At the Merger, eligible ChargePoint equity holders received or had the right to receive shares of Common Stock at a deemed value of $10.00 per share after giving effect to the exchange ratio of 0.9966 as defined in the Merger Agreement (“Exchange Ratio”). Accordingly, immediately following the consummation of the Merger, Legacy ChargePoint common stock exchanged into 217,021,368 shares of Common Stock, 68,896,516 shares were reserved for the issuance of Common Stock upon the potential future exercise of Legacy ChargePoint stock options and warrants that were exchanged into ChargePoint stock options and warrants, and 27,000,000 shares of Common Stock were reserved for the potential future issuance of the earnout shares.
In connection with the execution of the Merger Agreement, Switchback entered into separate subscription agreements (each a “Subscription Agreement”) with a number of investors (each a “New PIPE Investor”), pursuant to which the New PIPE Investors agreed to purchase, and Switchback agreed to sell to the New PIPE Investors, an aggregate of 22,500,000 shares of Common Stock (“PIPE Shares”), for a purchase price of $10.00 per share and an aggregate purchase price of $225.0 million, in a private placement pursuant to the subscription agreements (“PIPE Financing”). The PIPE Financing closed simultaneously with the consummation of the Merger.
Pursuant to the terms of a letter agreement the initial Switchback stockholders entered into in connection with the execution of the Merger Agreement (“Founders Stock Letter”), the initial stockholders surrendered 984,706 of Switchback Class B common stock shares purchased by NGP Switchback, LLC, a Delaware limited liability company (“Sponsor”) prior to the Switchback Public Offering on May 16, 2019 ( “Founder Shares”) for no consideration, whereupon such Founder Shares were immediately cancelled. Additionally, 900,000 Founder Shares, which were previously subjected to potential forfeiture until the closing volume weighted average price per share of the Company’s Common Stock achieved $12.00 for any ten trading days within any twenty consecutive trading day period during the five-year period following the Closing (“Founder Earn Back Triggering Event” and such Founder Shares the “Founder Earn Back Shares”), met the Founder Earn Back Triggering Event on March 12, 2021.
At the Closing, the Sponsor exercised its right to convert a portion of the working capital loans made by the Sponsor to Switchback into an additional 1,000,000 Private Placement Warrants at a price of $1.50 per warrant in satisfaction of $1.5 million principal amount of such loans.
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ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
The number of shares of Common Stock issued immediately following the consummation of the Merger was as follows:
Shares
Common stock of Switchback, outstanding prior to Merger 39,264,704 
Less redemption of Switchback shares (33,009)
Less surrender of Switchback Founder Shares (984,706)
Common stock of Switchback 38,246,989 
Shares issued in PIPE 22,500,000 
Merger and PIPE financing shares (1) 60,746,989 
Legacy ChargePoint shares (2) 217,021,368 
Total shares of common stock immediately after Merger 277,768,357 
_______________
(1) This includes 900,000 contingently forfeitable Founder Earn Back Shares pending the occurrence of the Founder Earn Back Triggering Event, which was met on March 12, 2021
(2) The number of Legacy ChargePoint shares was determined by converting the 217,761,738 shares of Legacy ChargePoint common stock outstanding immediately prior to the closing of the Merger using the Exchange Ratio of 0.9966. All fractional shares were rounded down.
All periods prior to the Merger have been retrospectively adjusted using the Exchange Ratio for the equivalent number of shares outstanding immediately after the Merger to effect the reverse recapitalization. Additionally, upon the consummation of the Merger, the Company gave effect to the issuance of 60,746,989 shares of Common Stock for the previously issued Switchback common stock and PIPE Shares that were outstanding at the Closing Date.
In connection with the Merger, the Company raised $511.6 million of proceeds including the contribution of $286.6 million of cash held in Switchback’s trust account from its initial public offering, net of redemptions of Switchback public stockholders of $0.3 million, and $225.0 million of cash in connection with the PIPE financing. The Company incurred $36.5 million of transaction costs, consisting of banking, legal, and other professional fees, of which $29.5 million was recorded as a reduction to additional paid-in capital of proceeds and the remaining $7.0 million was expensed in the condensed consolidated statements of operations.
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, 2022 and 2021 and for the years ended January 31, 2022, 2021 and 2020.
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 credit losses, inventory reserves, the useful lives of long-lived assets, the determination of the incremental borrowing rate used for operating lease liabilities, the valuation of redeemable convertible preferred stock warrants and Common Stock warrants, including Common Stock Warrants as a result of the Merger, contingent earnout liability, valuation of acquired goodwill and intangible assets, the value of Common Stock 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.
14


ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
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 with large, creditworthy financial institutions. The Company has not experienced any losses on its deposits of cash and cash equivalents through deposits with federally insured commercial banks. 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 April 30, 2022, and January 31, 2022, no customer individually accounted for 10% or more of accounts receivable, net. For the three months ended April 30, 2022 and 2021, there were no customers that 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.
Supply chain disruptions and COVID-19
In March 2020, the World Health Organization characterized COVID-19 as a pandemic. The impact of COVID-19, including changes in consumer and business behavior, pandemic fears and market downturns, and restrictions on business and individual activities, has created significant volatility in the global economy and led to reduced economic activity. The spread of COVID-19 has disrupted the Company’s supply chain and heightened its freight and logistic costs, and has similarly disrupted manufacturing, delivery and overall supply chain of vehicle manufacturers and suppliers, which has led to fluctuations in EV sales in markets around the world. These ongoing supply chain challenges and heightened logistic costs decreased gross margins in the three months ended April 30, 2022, and the Company expects that gross margins will continue to be adversely affected by increased material costs and freight and logistic expenses through the remainder of the fiscal year ending January 31, 2023.
As a result of the COVID-19 pandemic, the Company initially modified its business practices (including reducing employee travel, recommending that all non-essential personnel work from home and canceling or reducing physical participation in sales activities, meetings, events and conferences), implemented additional safety protocols for essential workers, and implemented temporary cost cutting measures in order to reduce its operating costs. In May 2022, the Company commenced a “return-to-office” plan, which includes shifting to a hybrid model where employees have the flexibility to work from home or from the office. The ongoing COVID-19 pandemic has resulted in government authorities implementing numerous measures to try to contain the COVID-19 virus, such as travel bans and restrictions, quarantines, stay-at-home or shelter-in-place orders and business shutdowns. While these measures may be relaxed or revised in some areas, there is no guarantee these measures will not be reinstated or resumed due to additional variants of COVID-19 or the inability or ineffectiveness of public health measures to limit the further spread of COVID-19. The Company may take further actions as may be required by government authorities or that it determines are in the best interests of its employees, customers, suppliers, vendors and business partners as the result of the COVID-19 pandemic.
The ultimate full societal and economic impact of the COVID-19 pandemic remains unknown and its duration and extent depend on current and future developments that cannot be accurately predicted. It has already had an adverse effect on the global economy, the persistence of which has varied over time and across the geographies in which the Company operates. The conditions caused by the COVID-19 pandemic, such as more prevalence of permanent work-from-home policies, are likely to continue affecting the rate of global infrastructure spending, and thus to continue to adversely impact the Company’s commercial business and its overall gross margin as the Company’s commercial business contributes higher margins than its residential and fleet businesses. Further, the COVID-19 pandemic could continue to disrupt supply chains and heighten component and shipping pricing and logistics expenses and further adversely impact the Company’s gross margins, adversely affect demand for the Company’s platforms, lengthen its product development and sales cycles, reduce the value, renewal rate or duration of subscriptions, negatively impact collections of accounts receivable, reduce expected spending from new
15


ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
customers, cause some of its paying customers to go out of business and limit the ability of the Company’s direct sales force to travel to customers and potential customers, all of which could adversely affect the Company’s business, results of operations and financial condition.
Segment Reporting
The Company operates as one operating segment because its Chief Executive Officer, as the Company’s chief operating decision maker, reviews its financial information on a consolidated basis for purposes of making decisions regarding allocating resources and assessing performance.
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 of $0.4 million as of April 30, 2022 and January 31, 2022 relates to cash deposits restricted under letters of credit issued in support of trade agreements.
The reconciliation of cash, cash equivalents, and restricted cash to amounts presented in the consolidated statements of cash flows were as follows:
April 30,
2022
January 31,
2022
(in thousands)
Cash and cash equivalents $ 540,583  $ 315,235 
Restricted cash 400  400 
Total cash, cash equivalents, and restricted cash $ 540,983  $ 315,635 
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 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.
16


ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Remaining Performance Obligations
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. The Company’s Assure, Cloud and CPaaS subscription terms typically range from one to five years and are paid up-front. Revenue expected to be recognized from remaining performance obligations was $177.1 million as of April 30, 2022, of which 49% is expected to be recognized over the next twelve months.
Deferred Revenue
Deferred revenue represents billings or payments received in advance of revenue recognition and is recognized in revenue upon transfer of control. Balances consist primarily of Cloud and Assure services not yet rendered as of the balance sheet date. Contract assets, which represent services provided or products transferred to customers in advance of the date the Company has a right to invoice, are netted against deferred revenue on a customer-by-customer basis. Current deferred revenue represents deferred revenue that will be recognized within twelve months, and non-current is deferred revenue that will be recognized beyond that twelve-month period. Total deferred revenue was $157.5 million and $146.8 million as of April 30, 2022 and January 31, 2022, respectively. The Company recognized $22.7 million and $15.2 million of revenue during the three months ended April 30, 2022 and April 30, 2021, respectively, that was included in the deferred revenue balance at the beginning of the period.
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under ASC 740, Income Taxes (“ASC 740”). Deferred tax assets are recognized for deductible temporary differences and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the financial reporting and tax bases of assets and liabilities. Deferred tax assets and liabilities are measured by applying enacted statutory tax rates applicable to the future years in which deferred tax assets or liabilities are expected to be settled or realized. Valuation allowances, if management deems them necessary, are established to reduce deferred tax assets to the amount that more likely than not will be realized and primarily relate to the ability to utilize losses in various tax jurisdictions.
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be “more likely than not” to be sustained upon examination by taxing authorities. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company has no material uncertain tax position liabilities for any of the reporting periods presented.
Accounting Pronouncements
Recently Issued Accounting Standards
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 will be 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 is currently assessing the impact of this guidance on its consolidated financial statements and related disclosures.
17


ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Recently Issued Accounting Standards Adopted
In August 2020, the FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40),” which modifies and simplifies accounting for convertible instruments. The new guidance eliminates certain separation models that require separating embedded conversion features from convertible instruments. The guidance also addresses how convertible instruments are accounted for in the diluted earnings per share calculation. The guidance will be effective for fiscal years beginning after December 15, 2021. Early adoption is permitted, but no earlier than for fiscal years beginning after December 15, 2020. The Company adopted ASU 2020-06 on February 1, 2022 and the amendment in this guidance was applied to the convertible note the Company issued in April 2022 (see Note 7, Debt). There was no financial instrument outstanding as of the beginning of the fiscal year 2023 that requires the Company to apply modified retrospective approach.
In November 2021, the FASB issued ASU No. 2021-10, “Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance,” which requires entities to disclose annually its transactions with a government accounted for by applying a grant or contribution accounting model by analogy. The disclosure requirement includes information about the nature of the transactions and the related accounting policy used to account for the transactions, the line items on the balance sheet and income statement that are affected by the transactions, and the amounts applicable to each financial statement line, and significant terms and conditions of the transactions, including commitments and contingencies. The guidance will be effective for annual reporting periods beginning after December 15, 2021. Early application is permitted. The Company adopted ASU 2021-10 on February 1, 2022 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 up to $7.7 million of additional earnout consideration contingent on meeting certain revenue targets through January 31, 2023 (“ViriCiti Earnout”). 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.
The acquisition of ViriCiti was considered a business combination and was accounted for under the acquisition method of accounting. The total purchase price was allocated to the net tangible and intangible assets acquired and liabilities assumed based on their respective fair values on the acquisition date and the excess was recorded as goodwill. The total purchase price was allocated to $62.8 million of goodwill, $17.7 million of customer relationship intangible assets, and $6.6 million of developed technology intangible assets acquired, and deferred tax liabilities of $3.5 million and net liabilities of $0.2 million were assumed. Goodwill is not deductible for tax purposes.
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, valued at $15.9 million, are held in escrow to cover indemnity claims the Company may make within eighteen months from the closing date. 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.
The acquisition of HTB was considered a business combination and was accounted for under the acquisition method of accounting. The total purchase price was allocated to the net tangible and intangible assets acquired and liabilities assumed based on their respective fair values on the acquisition date, and the excess was recorded as goodwill. The total purchase price was allocated to $159.0 million of goodwill, $78.7 million of customer relationship intangible assets, $12.7 million of
18


ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
developed technology intangible assets, and net assets of $2.9 million acquired, and deferred tax liabilities of $18.3 million were assumed. Goodwill is not deductible for tax purposes.
There were no measurement period adjustments for the three months ended April 30, 2022.
4.Goodwill and Intangible Assets
Goodwill
The following table summarizes the changes in carrying amounts of goodwill (in thousands):
Balance as of January 31, 2022 $ 218,484 
Foreign exchange fluctuations (8,557)
Balance as of April 30, 2022 $ 209,927 
There was no impairment recognized for the three months ended April 30, 2022 and 2021.
The following table presents the details of intangible assets (amounts in thousands, useful lives in years):
April 30, 2022
Cost (1) Accumulated Amortization (1) Net (1) Useful Life
Customer Relationships $ 88,853  $ (5,312) $ 83,541  10
Developed Technology 18,051  (1,873) 16,178  6
$ 106,904  $ (7,185) $ 99,719 
_______________
(1) Values are translated into U.S. Dollars at period-end foreign exchange rates.
January 31, 2022
Cost (1) Accumulated Amortization (1) Net (1) Useful Life
Customer Relationships $ 93,065  $ (3,223) $ 89,842  10
Developed Technology 18,731  (1,364) 17,367  6
$ 111,796  $ (4,587) $ 107,209 
_______________
(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 consolidated statement 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. Amortization expense was $2.9 million for the three months ended April 30, 2022. There was no amortization expense for the three months ended April 30, 2021.
19


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 April 30, 2022
Level 1 Level 2 Level 3 Total
(in thousands)
Assets
Money market funds $ 464,787  $ —  $ —  $ 464,787 
Total financial assets $ 464,787  $   $   $ 464,787 
Liabilities
Contingent earnout liability recognized upon acquisition of ViriCiti (ViriCiti Earnout) —  —  5,658  5,658 
Total financial liabilities $   $   $ 5,658  $ 5,658 
Fair Value Measured as of January 31, 2022
Level 1 Level 2 Level 3 Total
(in thousands)
Assets
Money market funds $ 254,716  $ —  $ —  $ 254,716 
Total financial assets $ 254,716  $   $   $ 254,716 
Liabilities
Common stock warrant liabilities (Private Placement) $ —  $ —  $ 25  $ 25 
Contingent earnout liability recognized upon acquisition of ViriCiti (ViriCiti Earnout) —  —  5,993  5,993 
Total financial liabilities $   $   $ 6,018  $ 6,018 
The money market funds were classified as cash and cash equivalents on the condensed consolidated balance sheets. 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 April 30, 2022 and January 31, 2022. Realized gains and losses, net of tax, were not material for any of the periods presented.
As of April 30, 2022 and January 31, 2022, the Company had no investments with a contractual maturity of greater than one year.
20


ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
The following table presents a summary of the changes in the fair value of the Company’s Level 3 financial instruments:

Private placement warrant liability ViriCiti 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 —  335 
Reclassification of warrants to stockholders’ equity (deficit) due to exercise 48  — 
Fair value as of April 30, 2022 $   $ (5,658)
Redeemable convertible preferred stock warrant liability Private placement warrant liability Earnout liability
(in thousands)
Fair value as of January 31, 2021 $ (75,843) $ —  $ — 
Private placement warrant liability acquired as part of the merger —  (127,888) — 
Contingent earnout liability recognized upon the closing of the reverse recapitalization
—  —  (828,180)
Change in fair value included in other income (expense), net 9,237  45,434  84,420 
Reclassification of warrants to stockholders’ equity (deficit) due to exercise —  51,955  — 
Reclassification of Legacy ChargePoint preferred stock warrant liability upon the reverse capitalization 66,606  —  — 
Issuance of earnout shares upon triggering events —  —  501,120 
Reclassification of remaining contingent earnout liability upon triggering event
—  —  242,640 
Fair value as of April 30, 2021 $   $ (30,499) $  
Private Placement Liability
The fair values of the private placement warrant liability is 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 and Earnout).
ViriCiti Earnout Liability
On August 11, 2021, the Company acquired all of the outstanding shares of ViriCiti. The purchase price consideration included an earnout consideration contingent on meeting certain revenue targets through January 31, 2023. The fair value of the ViriCiti Earnout liability is 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.
During the three months ended April 30, 2022, the Company did not revalue the ViriCiti Earnout liability as updated revenue expectations for the earnout period through January 2023 did not materially change. The change in the fair value of the the ViriCiti Earnout liability of $0.3 million is due to foreign currency translation.
21


ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
6.Composition of Certain Financial Statement Items
Inventories
Inventories consisted of the following:
April 30,
2022
January 31,
2022
(in thousands)
Raw materials $ 13,409  $ 9,712 
Finished goods and components 31,896  26,167 
Total Inventories $ 45,305  $ 35,879 
Prepaid expense and other current assets
Prepaid expense and other current assets consisted of the following:
April 30,
2022
January 31,
2022
(in thousands)
Prepaid expense $ 24,042  $ 16,951 
Other current assets 22,044  19,652 
Total Prepaid Expense and Other Current Assets $ 46,086  $ 36,603 
Property and Equipment, net
Property and equipment, net consisted of the following:
April 30,
2022
January 31,
2022
(in thousands)
Furniture and fixtures $ 907  $ 903 
Computers and software 6,443  6,147 
Machinery and equipment 17,562  16,193 
Tooling 10,989  10,572 
Leasehold improvements 10,581  10,549 
Owned and operated systems 23,443  22,546 
Construction in progress 3,497  2,720 
73,422  69,630 
Less: Accumulated depreciation (38,226) (35,037)
Total Property and Equipment, Net $ 35,196  $ 34,593 
Depreciation expense for the three months ended April 30, 2022 and 2021 was $3.4 million and $2.7 million respectively.
22


ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Accrued and Other Current Liabilities
Accrued and other current liabilities consisted of the following:

April 30,
2022
January 31,
2022
(in thousands)
Accrued expenses $ 36,951  $ 31,865 
Refundable customer deposits 10,440  9,409 
Payroll and related expenses 15,226  16,131 
Taxes payable 12,467  8,955 
Other liabilities (including ViriCiti Earnout) 20,512  17,968 
Total Accrued and Other Current Liabilities $ 95,596  $ 84,328 
As of April 30, 2022, ViriCiti Earnout liability is reclassified from long-term liabilities to current liabilities as the Company expects the liability to be payable within twelve months.

Revenue
Revenue consisted of the following:

Three Months Ended April 30,
2022 2021
(in thousands)
United States $ 62,315  $ 35,110 
Rest of World 19,318  5,400 
Total revenue $ 81,633  $ 40,510 

7.Debt
2018 Loan
In July 2018, the Company entered into a term loan facility with certain lenders (“2018 Loan”) with a borrowing capacity of $45.0 million to finance working capital and repay all outstanding amounts owed under previous loans. The Company borrowed $35.0 million, with issuance costs of $1.1 million and net proceeds of $33.9 million. The 2018 Loan was secured by substantially all of the Company’s assets, contained customary affirmative and negative covenants, and required the Company to maintain minimum cash balances and attain certain customer billing targets. The 2018 Loan had a five-year maturity and interest was calculated at LIBOR plus 6.55%. The 2018 Loan agreement was amended on March 20, 2019, to extend the interest only monthly payments through June 30, 2021, to be followed by equal monthly payments of principal and interest.
Transaction costs upon entering into the 2018 Loan were recorded as debt discount and were amortized over the term of the 2018 Loan.
Total interest expense incurred during the three months ended April 30, 2022 and 2021 was nil and $1.5 million, respectively.
In March 2021, the Company repaid the entire loan balance of $35.0 million plus accrued interest and prepayment fees of $1.2 million.
23


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

2027 Convertible Notes
The following table presents the Company’s convertible debt outstanding:
April 30, 2022
(in thousands) Gross
Amount
Debt Discount and Issuance Costs Carrying
Amount
Estimated Fair Value
2027 Convertible Note $ 300,000  $ (5,930) $ 294,070  $ 242,000 
Total long-term debt $ 300,000  $ (5,930) $ 294,070  $ 242,000 
The following table presents the Company’s interest expense related to convertible debt:
Three Months Ended
April 30,
2022
(in thousands)
Contractual interest expense $ 875 
Amortization of debt discount and issuance costs 59
Total interest expense $ 934 

In April 2022, the Company completed a private placement of $300.0 million aggregate principal amount of unsecured Convertible Senior PIK Toggle Note (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 $294.1 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 an 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 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;
24


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

during the 5 business days period after any 10 consecutive trading days in which, if the trading price per $1,000 principal amount of 2027 Convertible Notes for each trading day of such 10 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.
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 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 plus any accrued and unpaid interest.
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 April 30, 2022, the effective interest rate on the 2027 Convertible Notes was 3.93%. In accordance with ASC Topic 835-30, 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, as of April 30, 2022 using Level 2 fair value inputs, was $242.0 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. As of April 30, 2022, the Company had open purchase commitments for goods and services of $211.9 million, all of which are expected to be received by June 30, 2024.
25


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

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 April 30, 2022, 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 condensed consolidated financial statements 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.
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.
26


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

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 April 30, 2022 (in thousands):
(in thousands)
2023 (remaining nine months) $ 4,990 
2024 6,077 
2025 5,690 
2026 4,703 
2027 4,522 
Thereafter 10,284 
Total undiscounted operating lease payments 36,266 
Less: imputed interest (8,556)
Total operating lease liabilities 27,710 
Less: current portion of operating lease liabilities (3,676)
Operating lease liabilities, noncurrent $ 24,034 

9.Common Stock
As of April 30, 2022 and January 31, 2022, 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 336,672,629 and 334,760,615 shares issued and outstanding as of April 30, 2022 and January 31, 2022, respectively.
Common Stock Reserved for Future Issuance
Shares of Common Stock reserved for future issuance, on an as-if converted basis, were as follows:
April 30,
2022
January 31,
2022
Stock options issued and outstanding 20,781,407  22,200,869 
Restricted stock units outstanding 4,370,671  4,033,418 
Common stock warrants outstanding 35,524,021  35,549,024 
Shares available for grant under 2021 Equity Incentive Plan 52,569,737  36,370,596 
Shares available for grant under 2021 ESPP 7,913,721  8,177,683 
Shares available for conversion under 2027 Convertible Notes 20,743,081   
Total shares of Common Stock reserved 141,902,638  106,331,590 


27


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

10.Stock Warrants and Earnout
Redeemable Convertible Preferred Stock Warrants
Warrants to purchase shares of redeemable convertible preferred stock were initially recognized as a liability recorded at fair value upon issuance and were subject to remeasurement to fair value at each balance sheet date. As part of the Merger, Legacy ChargePoint redeemable convertible preferred stock was converted into Legacy ChargePoint common stock pursuant to the conversion rate effective immediately prior to the Merger while all related Legacy ChargePoint preferred stock warrants were converted into warrants exercisable for shares of Common Stock with terms consistent with the Legacy ChargePoint preferred stock warrants except for the number of shares exercisable therefor and the exercise price, each of which was adjusted using the Exchange Ratio. At that time, the redeemable convertible preferred stock warrant liability was remeasured and reclassified to additional paid-in capital.
Common Stock Warrants
In addition to the warrants to purchase shares of Legacy ChargePoint preferred stock described above, Legacy ChargePoint had outstanding warrants to purchase shares of Legacy ChargePoint common stock (collectively, “Legacy Warrants”), which now represent warrants to purchase Common Stock.
During the three months ended April 30, 2022, 14,568 Legacy Warrants were net exercised resulting in the issuance of 13,223 shares of Common Stock. During the three months ended April 30, 2021, 1,097,305 Legacy Warrants were exercised resulting in the issuance of 921,980 shares of Common Stock. During the three months ended April 31, 2022 and 2021, there were no cash proceeds received for the exercise of Legacy Warrants.
As of April 30, 2022, there were 35,524,021 Legacy Warrants outstanding, which are classified as equity.
Private Placement Warrants
The Private Placement Warrants were initially recognized as a liability on February 26, 2021, and remeasured to fair value as of any respective exercise dates. The Company recorded immaterial loss and a gain of $45.4 million for the three months ended April 30, 2022 and 2021, respectively, classified within change in fair value of warrant liabilities in the condensed consolidated statements of operations.
The Private Placement Warrants were valued using assumptions under the BLM that assumes optimal exercise of the Company’s redemption option at the earliest possible date. On February 21, 2022, the Company redeemed the remaining Private Placement Warrants for 0.355 shares of Common Stock per warrant. As of April 30, 2022, there were no Private Placement Warrants outstanding.
Public Warrants
The Public Warrants were initially recognized as a liability on February 26, 2021 and remeasured to fair value based upon the market price as warrants were exercised. On June 4, 2021 the Company issued a redemption notice pursuant to which all but 244,481 Public Warrants were exercised by the Public Warrant holders. At the conclusion of the redemption notice period on July 6, 2021, the Company redeemed the remaining 244,481 Public Warrants outstanding for $0.01 per warrant. As of April 30, 2022 and January 31, 2022, no Public Warrants remained outstanding.
The Company recognized no gain or loss for the three months ended April 30, 2022, and recognized a loss of $1.6 million for the three months ended April 30, 2021, classified within change in fair value of warrant liabilities in the condensed consolidated statements of operations.
During the three months ended April 30, 2022 and 2021, proceeds received for the exercise of Public Warrants were zero and $73.3 million, respectively.
28


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

Warrant Activity
Activity of warrants is set forth below:
  Legacy Warrants Private Placement Warrants
Total
Common Stock Warrants
Outstanding as of January 31, 2022 35,538,589  10,435  35,549,024 
Warrants Exercised (14,568) (10,435) (25,003)
Outstanding as of April 30, 2022 35,524,021 35,524,021
Contingent Earnout Liability
During the five-year period starting at the closing of the Merger (“Earnout Period”), eligible former equity holders of Legacy ChargePoint were eligible to receive up to 27,000,000 additional shares of Common Stock (“Earnout Shares”) in three equal tranches if the Earnout Triggering Events (as described in the Merger Agreement) were fully satisfied. The three Earnout Triggering Events were the dates on which the closing volume weighted-average price (“VWAP”) per share of common stock quoted on the NYSE (or the exchange on which the shares of the Company’s Common Stock are then listed) is greater or equal to $15.00, $20.00 and $30.00, respectively, for any ten trading days within any 20 consecutive trading day period within the Earnout Period.
Upon the closing of the Merger, the contingent obligation to issue Earnout Shares was accounted for as a liability because the Earnout Triggering Events that determine the number of Earnout Shares required to be issued include events that are not solely indexed to the Common Stock of ChargePoint. The estimated fair value of the total Earnout Shares at the closing of the Merger on February 26, 2021, was $828.2 million based on a Monte Carlo simulation valuation model using a distribution of potential outcomes on a monthly basis over the Earnout Period using the most reliable information available. Assumptions used in the valuation are described below.

March 12,
2021
February 26,
2021
Current stock price $27.84 $30.83
Expected volatility 72.00  % 71.60  %
Risk-free interest rate 0.85  % 0.75  %
Dividend rate 0.00  % 0.00  %
Expected term (years) 4.96 5.00
The first two Earnout Triggering Events for up to 18,000,000 of the Earnout Shares occurred on March 12, 2021, and, after withholding some of these Earnout Shares to cover employee withholding tax obligations, 17,539,657 Earnout Shares were issued on March 19, 2021, and the estimated fair value of the earnout liability was remeasured to $743.7 million, including (i) $501.1 million related to the Earnout Shares issuable upon the occurrence of the Earnout Triggering Event associated with the $15.00 and $20.00 VWAP per share thresholds based on the Common Stock price as of March 12, 2021, and (ii) $242.6 million related to the estimated fair value of earnout liability related to the remaining 9,000,000 Earnout Shares issuable upon the occurrence of the Earnout Triggering Event associated with the $30.00 VWAP per share threshold based on a Monte Carlo simulation valuation model as of March 12, 2021, as described above. The change in fair value resulted in a gain of $84.4 million recognized in the condensed consolidated statement of operations for the three months ended April 30, 2021. Upon settlement of the first two tranches, the classification of the remaining 9,000,000 Earnout Shares of the third tranche was changed to equity on March 12, 2021, because the Earnout Shares became an instrument contingently issuable upon the occurrence of the Earnout Triggering Event into a fixed number of Common Shares that is not based on an observable market price or index other than the Company’s own stock price.
The third and final Earnout Triggering Event for up to 9,000,000 of the Earnout Shares associated with the $30.00 VWAP per share threshold occurred on June 29, 2021, and, after the withholding of some of these Earnout Shares to cover employee withholding tax obligations, 8,773,596 Earnout Shares were issued on July 1, 2021. No further Earnout Shares remained contingently issuable as of April 30, 2022 and January 31, 2022.
29


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


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
April 30,
2022 2021
(in thousands)
Cost of revenue $ 771  $ 24 
Research and development 5,803  675 
Sales and marketing 2,324  598 
General and administrative 6,629  6,280 
Total stock-based compensation expense $ 15,527  $ 7,577 
The following sets forth the total stock-based compensation expense by award type:
Three Months Ended
April 30,
2022 2021
(in thousands)
Stock Options $ 4,136  $ 7,577 
ESPP 1,765  — 
RSU 9,626  — 
Total stock-based compensation expense $ 15,527  $ 7,577 
The following sets forth the unrecognized stock-based compensation expense and the weighted average period they are expected to be recognized:
April 30, 2022
Unrecognized Stock-Based Compensation Expense Weighted-Average Period
(in thousands, except period in years)
Stock Options $ 28,261  1.47
ESPP 10,869  1.86
RSU 81,409  2.83
Total unrecognized stock-based compensation expense $ 120,539 
2021 Employee Stock Purchase Plan
30


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

On February 25, 2021, the stockholders of the Company approved the 2021 Equity Incentive Plan (“2021 EIP”) and the 2021 Employee Stock Purchase Plan (“2021 ESPP”). The 2021 ESPP permits participants to purchase shares of the Company’s Common Stock, up to the IRS allowable limit, through contributions (in the form of payroll deductions or otherwise to the extent permitted by the administrator) of up to 15% of their eligible compensation. The 2021 ESPP provides for consecutive, overlapping 24-month offering periods, subject to certain rollover and reset mechanisms as defined in the ESPP. Participants are permitted to purchase shares of the Company’s Common Stock at the end of each 6-month purchase period at 85% of the lower of the fair market value of the Company’s Common Stock on the first trading day of an offering period or on the last trading date in each purchase period. A participant may purchase a maximum of 10,000 shares of the Company’s Common Stock during a purchase period. Participants may end their participation at any time during an offering and will be paid their accrued contributions that have not yet been used to purchase shares. Participation ends automatically upon termination of employment with the Company. The initial offering period is from October 1, 2021 through September 9, 2023. The 2021 ESPP allows for up to one increase in contribution during each purchase period. The pre- and post-modification fair values are calculated on the date of the modification. The 2021 ESPP offers a rollover feature that provides for an offering period to be rolled over to a new lower-priced offering if the offering price of the new offering period is less than that of the current offering period. The 2021 ESPP rollover occurred when the Company’s closing stock price on March 10, 2022 was below the closing stock price on October 1, 2021, which triggered a new 24-month offering period through March 9, 2024. If an employee elects to increase his or her contribution, or the offering price resets an accounting modification occurs. The incremental expense as a result of such modifications was immaterial for the three months ended April 30, 2022.
Further, on the first day of each March during the term of the 2021 ESPP, commencing on March 1, 2021 and ending on (and including) March 1, 2040, the aggregate number of shares of Common Stock that may be issued under the 2021 ESPP shall automatically increase by a number equal to the lesser of (i) one percent (1%) of the total number of shares of Common Stock issued and outstanding on the last day of the preceding month, (ii) 5,400,000 shares (subject to standard anti-dilution adjustments), or (iii) a number of shares determined by the Company’s Board of Directors. As of April 30, 2022, 7,913,721 shares of Common Stock were available under the 2021 ESPP.
During the three months ended April 30, 2022, 263,962 shares of Common Stock have been purchased under the 2021 ESPP.
2021 Equity Incentive Plan
On February 25, 2021, the stockholders of the Company approved the 2021 Equity Incentive Plan (“2021 EIP”). Under the 2021 EIP, the Company can grant stock options, stock appreciation rights, restricted stock, restricted stock units (“RSU”), performance restricted stock units (“PRSU”), and certain other awards which are settled in the form of shares of Common Stock issued under this 2021 EIP. On the first day of each March, beginning on March 1, 2021 and continuing through March 1, 2030, the 2021 EIP reserve will automatically increase by a number equal to the lesser of (a) 5% of the total number of shares actually issued and outstanding on the last day of the preceding month and (b) a number of shares determined by the Company’s Board of Directors. As of April 30, 2022, 52,569,737 shares of Common Stock were available under the 2021 EIP.
There were no options granted for the three months ended April 30, 2022.
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”). As of April 30, 2022, 18,002,006 shares and 2,779,401 shares of Common Stock remained reserved for outstanding awards issued under the 2017 and 2007 Plans, respectively. Stock-based awards forfeited, cancelled or repurchased from the above plans generally are returned to the pool of shares of Common Stock available for issuance under the 2021 EIP Plan.
Restricted Stock Units
The 2021 EIP provides for the issuance of RSUs to employees and directors.
31


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

A summary of RSUs under the 2021 EIP at April 30, 2022 and changes during the period then ended is presented in the following table:
  Number of Shares Weighted Average Grant Date Fair Value per Share
Outstanding as of January 31, 2022 4,033,418  $ 26.27 
RSU granted 794,845  $ 14.40 
RSU vested (361,608) $ 27.24 
RSU forfeited (95,984) $ 24.61 
Outstanding as of April 30, 2022 4,370,671  $ 24.07 
Stock Options Activity
A summary of option activity under the 2017 and 2007 Plans at April 30, 2022 and changes during the periods then ended is presented in the following table:
  Number of Stock Option Awards Weighted Average Exercise Price Weighted Average Remaining Contractual term (in years) Aggregate Intrinsic Value (in thousands)
Outstanding as of January 31, 2022 22,200,869  $ 0.68  6.6 $ 292,362 
Options exercised (1,269,496) $ 0.61 
Options cancelled (149,966) $ 0.75 
Outstanding as of April 30, 2022 20,781,407  $ 0.68  6.4 $ 254,679 
Options vested and expected to vest as of April 30, 2022 20,661,879  $ 0.68  6.4 $ 253,223 
Exercisable as of April 30, 2022 14,975,204  $ 0.66  5.9 $ 183,894 
The options outstanding as of April 30, 2022, include the June 2020 grant of a stock option under the 2017 Plan to the Company’s Chief Executive Officer to purchase a total of 1.5 million shares of Common Stock (“CEO Award”) originally subject to both service and performance-based vesting conditions. No stock-based compensation expense had been recorded prior to the Merger as the CEO Awards were improbable of vesting before and after two modifications in each of September 2020 and December 2020, because the performance-based vesting condition was contingent upon the closing of the Merger. Accordingly, the Company commenced recognition of stock-based compensation expense for the CEO Award following the Merger in February 2021 when the only remaining vesting condition was service-based. As of April 30, 2022, the total unrecognized compensation expense related to the unvested portion of the CEO Award was $24.7 million, which is expected to be recognized over a period of 2.00 years.
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 2.0% and nil for the three months ended April 30, 2022 and 2021, 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.Related Party Transactions
Daimler AG and its affiliated entities (“Daimler”) are investors in the Company and one of its employees is a member of the Company’s Board of Directors. The following revenue transactions took place between the Company and Daimler during the periods presented:
32


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

Three Months Ended
April 30,
2022 2021
(in thousands)
Daimler $ 1,285  $ 1,335 
Revenue from related parties $ 1,285  $ 1,335 
Related party accounts receivable as of April 30, 2022 and January 31, 2022 from Daimler was $2.1 million and $2.2 million, respectively.

14.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 months ended April 30, 2022 and 2021:
Three Months Ended
April 30,
2022 2021
(in thousands, except share and per share data)
Numerator:
Net income (loss) $ (89,266) $ 82,289 
Adjust: Cumulative dividends on redeemable convertible preferred stock
—  (4,292)
Adjust: Deemed dividends attributable to vested option holders
—  (51,855)
Adjust: Deemed dividends attributable to common stock warrant holders
—  (110,635)
Net loss attributable to common stockholders - Basic (89,266) (84,493)
Less: Gain attributable to earnout shares issued
—  (53,820)
Less: Change in fair value of dilutive warrants
—  (49,471)
Net loss attributable to common stockholders - Diluted $ (89,266) $ (187,784)
Denominator:
Weighted average common shares outstanding 334,743,634  218,932,121 
Less: Weighted-average unvested restricted shares and shares subject to repurchase
(119,939) (316,258)
Weighted average shares outstanding - Basic 334,623,695  218,615,863 
Add: Earnout Shares under the treasury stock method
—  2,956,122 
Add: Public and Private Placement Warrants under the treasury stock method
—  3,961,404 
Weighted average shares outstanding - Diluted 334,623,695  225,533,389 
Net loss per share - Basic $ (0.27) $ (0.39)
Net loss per share - Diluted $ (0.27) $ (0.83)
As a result of the Merger in fiscal year 2022, the Company retroactively adjusted the weighted-average number of shares of Common Stock outstanding prior to the Closing Date by multiplying them by the Exchange Ratio of 0.9966 used to determine the number of shares of Common Stock into which they converted. The Common Stock issued as a result of the redeemable convertible preferred stock conversion on the Closing Date was included in the basic net loss per share calculation on a prospective basis.
Redeemable convertible preferred stock and preferred stock warrants outstanding prior to the Merger were excluded from the diluted net loss per share calculation for the three-months period ended April 30, 2021, because including them would have had an antidilutive effect.
33


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:
April 30,
2022
April 30,
2021
2027 Convertible Note (on an as-converted basis) 12,483,569  — 
Options to purchase common stock 20,781,407  29,795,964 
Restricted stock units 4,370,671  — 
Unvested early exercised common stock options 109,185  263,982 
Common stock and preferred stock warrants 35,524,021  43,895,087 
Employee stock purchase plan 2,546,487  — 
Total potentially dilutive common share equivalents 75,815,340  73,955,033 
15.Subsequent Events
On June 1, 2022, pursuant to the 2021 EIP, the Company granted service-based restricted stock units (RSU) of approximately 10.3 million shares to its employees and officers, which will vest over 3-5 years. The Company also granted performance restricted stock units (“PRSU”) of approximately 2 million shares to certain officers and the CEO of the Company with vesting contingent upon both market condition and continued service. The market condition of the award will be satisfied for 25%, 35%, and 40% of such market-based restricted stock units when the Company's common stock equals or exceeds $17.00, $22.00, and $30.00 respectively for at least 20 consecutive trading days at any time during the performance period. Awards which have satisfied the market condition will vest over 5 years, subject to predetermined time-based vesting schedules and other terms and conditions. The grant date fair value will be determined in accordance with ASC Topic 718, Compensation - Stock Compensation, and will be recognized over the requisite service period.

34



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, 2022 and related notes included in the Company’s Annual Report on Form 10-K filed with the SEC on April 4, 2022. 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 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 system owners, or hosts, to manage their Networked Charging Systems, and (ii) enable consumers the ability to locate, reserve, authenticate and transact EV charging sessions. 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 systems, Cloud Services and Assure into a single subscription (“ChargePoint as a Service” or “CPaaS”). Cloud Services, Assure and CPaaS are typically paid for up front and revenue is recognized ratably over the term of the service.
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 Inc., 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.” References to ChargePoint throughout this Quarterly Report prior to the Merger are references to Legacy ChargePoint.
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 every year since its inception. As of April 30, 2022, ChargePoint had an accumulated deficit of $900.9 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.
Recent Developments
Issuance of 2027 Convertible Notes
On April 12, 2022, the Company completed a private placement of $300.0 million of convertible debt notes due 2027 (the “2027 Convertible Notes”), generating new proceeds of approximately $294.1 million after deducting the initial purchaser discounts and commissions and the Company’s offering expenses. For a more complete description of the 2027 Convertible
35



Notes, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” below.
Key Factors Affecting Operating Results
ChargePoint believes its performance and future success depend on several factors that present significant opportunities for it but also pose risks and challenges, including those discussed below.
Growth in EV Adoption
ChargePoint’s revenue growth is directly tied to the number of passenger and commercial EVs sold, which it believes drives the demand for charging infrastructure. 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 and cost of charging EVs; and increases in fuel efficiency. In addition, macroeconomic factors, including governmental mandates and incentives, could impact demand for EVs, particularly since they can be more expensive than traditional gasoline-powered vehicles and the automotive industry globally has been experiencing a recent decline in sales. Further, geopolitical factors, such as COVID 19 pandemic and the the invasion of the Ukraine by Russia, 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 in the future may be negatively 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 majority of 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 recently closed acquisitions of ViriCiti and HTB. 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 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 commitments to build out their EV operations. If the Company is not successful in the fleet vertical, its financial condition and results of operation 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 Level 3 DC fast charger in fiscal year 2020, its gross margins may be initially negatively impacted by launch costs and lower volumes until it achieves targeted cost reductions. Cost reductions may not occur on the timeline ChargePoint expects due to unanticipated supply chain difficulties, government mandates or certification requirements. For example, ongoing supply chain challenges and heightened logistic costs related to disruptions initially caused by the COVID-19 pandemic and related component shortages decreased gross margins in the three
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months ended April 30, 2022, and ChargePoint expects gross margins will continue to be adversely affected by increased material costs and freight and logistic expenses through the remainder of the fiscal year and likely into its fiscal year ending January 31, 2024. In addition, ChargePoint may accelerate its expenditures where it sees growth opportunities, which may impact gross margin until upfront costs and inefficiencies are absorbed and normalized operations are achieved. Further, ChargePoint continues to invest in prioritizing an assurance of supply of its products and new customer acquisition as part of its “land and expand” model, which in the current environment, puts pressure on gross margins and increases operating expenses. ChargePoint also continuously evaluates and may adjust its expenditures based on its launch plans for new products, as well as other factors including the pace and prioritization of current projects under development and the addition of new projects. 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 would provide additional funding for EVs and EV charging infrastructure through the creation of new programs and grants and the expansion of existing programs, including $7.5 billion for EV charging along highway corridors. However, such incentives 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. For example, the credits under Section 30C of the Internal Revenue Code of 1986, as amended (the “Code”) which benefit investments in EV infrastructure expired on December 31, 2021, and there can be no assurance that the credit under Section 30C of the Code will be extended in the future. 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 credits earned for participating in low carbon fuel programs in some U.S. states. ChargePoint claims these regulatory credits only if they are not claimed by purchasers of its EV charging stations. If a material percentage of its customers were to claim these regulatory credits, ChargePoint’s revenue from this source could decline significantly, which could have an adverse effect on its revenue and overall gross margin. Prior to fiscal year 2021, ChargePoint derived a slight majority of its other revenue from these regulatory credits. However, revenue from this source as a percentage of total revenue has declined recently and may continue to decline over time. Further, the availability of such credits depends on continued governmental support for these programs. If these programs are modified, reduced or eliminated, ChargePoint’s ability to generate this revenue in the future would be adversely impacted.
Supply Chain Disruptions and COVID-19
In March 2020, the World Health Organization characterized COVID-19 as a pandemic. The impact of COVID-19, including changes in consumer and business behavior, pandemic fears and market downturns, and restrictions on business and individual activities, has created significant volatility in the global economy and led to reduced economic activity. The spread of COVID-19 has disrupted ChargePoint’s supply chain and heightened its freight and logistic costs, and has similarly disrupted manufacturing, delivery and overall supply chain of vehicle manufacturers and suppliers, which has led to fluctuations in EV sales in markets around the world. These ongoing supply chain challenges and heightened logistic costs decreased gross margins in the three months ended April 30, 2022, and ChargePoint expects that gross margins will continue to be adversely affected by increased material costs and freight and logistic expenses through the remainder of the fiscal year ending January 31, 2023.
As a result of the COVID-19 pandemic, ChargePoint initially modified its business practices (including reducing employee travel, recommending that all non-essential personnel work from home and canceling or reducing physical participation in sales activities, meetings, events and conferences), implemented additional safety protocols for essential workers, and implemented temporary cost cutting measures in order to reduce its operating costs. In May 2022, ChargePoint commenced a “return-to-office” plan, which includes shifting to a hybrid model where employees have the flexibility to work from home or from the office. The ongoing COVID-19 pandemic has resulted in government authorities implementing numerous measures to try to contain the COVID-19 virus, such as travel bans and restrictions, quarantines, stay-at-home or shelter-in-place orders and business shutdowns. While these measures may be relaxed or revised in some areas, there is no guarantee these measures will not be reinstated or resumed due to additional variants of COVID-19 or the inability or ineffectiveness of public health measures to limit the further spread of COVID-19. ChargePoint may take further actions as may be required by government authorities or that it determines are in the best interests of its employees, customers, suppliers, vendors and business partners as the result of the COVID-19 pandemic.
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The ultimate full societal and economic impact of the COVID-19 pandemic remains unknown and its duration and extent depend on current and future developments that cannot be accurately predicted. It has already had an adverse effect on the global economy, the persistence of which has varied over time and across the geographies in which ChargePoint operates. The conditions caused by the COVID-19 pandemic, such as more prevalence of more permanent work-from-home policies, are likely to continue affecting the rate of global infrastructure spending, and thus to continue to adversely impact ChargePoint’s commercial business and its overall gross margin as ChargePoint’s commercial business contributes higher margins than its residential and fleet businesses. Further, the COVID-19 pandemic could continue to disrupt supply chains and heighten component and shipping pricing and logistics expenses and further adversely impact ChargePoint’s gross margins, adversely affect demand for ChargePoint’s platforms, lengthen its product development and sales cycles, reduce the value, renewal rate or duration of subscriptions, negatively impact collections of accounts receivable, reduce expected spending from new customers, cause some of its paying customers to go out of business and limit the ability of its direct sales force to travel to customers and potential customers, all of which could adversely affect ChargePoint’s business, 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 Level 2 AC products for use in residential, commercial and fleet applications, and Level 3 DC, or fast-charge products for use in commercial and fleet applications. ChargePoint generally recognizes revenue from sales of Networked Charging Systems upon shipment to the customer, at which point ChargePoint’s performance obligation is satisfied.
Subscriptions

Subscriptions revenue consists of services related to Cloud, as well as extended maintenance service plans under Assure. Subscription revenue also consists of CPaaS revenue which combines the customer’s use of ChargePoint’s owned and operated systems with Cloud and Assure programs into a single subscription.
In some instances, CPaaS subscriptions are considered for accounting purposes to contain a lease for the customer’s use of ChargePoint’s owned and operated systems unless the location allows the customer to receive incremental economic benefit from regulatory credits earned on that EV charging system. Lessor revenue relates to operating leases and historically has not been material. Subscription 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 fees received for transferring regulatory credits earned for participating in low carbon fuel programs in some states, charging related fees received from drivers using charging sites owned and operated by ChargePoint, net transaction fees earned for processing payments collected on driver charging sessions at charging sites owned by its customers, and other professional services. Revenue from driver charging sessions and charging transaction fees is recognized when the charging session or transaction is completed. Revenue from regulatory credits is recognized when the regulatory credits are transferred. Revenue from fees for owned and operated sites is recognized over time on a straight-line basis over the performance period of the service contract as ChargePoint has an ongoing obligation to operate the sites. Revenue from professional services is recognized as the services are rendered.
For the remainder of fiscal year 2023, ChargePoint expects revenue to grow in both Networked Charging Systems and subscriptions due to an increasing arrival rate of EVs and the need for charging infrastructure to support them.
April 30,
Networked Charging Systems 2022 2021 Change
(dollar amounts in thousands)
Three months ended $ 59,551  $ 26,800  $ 32,751  122.2  %
Percentage of total revenue 72.9  % 66.2  %
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Networked Charging Systems revenue increased during the three months ended April 30, 2022 compared to the three months ended April 30, 2021 primarily due to higher demand from customers in our three verticals, resulting in higher volumes of systems delivered across ChargePoint’s major product families.
April 30,
Subscriptions 2022 2021 Change
(dollar amounts in thousands)
Three months ended $ 17,646  $ 10,824  $ 6,822  63.0  %
Percentage of total revenue 21.6  % 26.7  %
Subscriptions revenue increased during the three months ended April 30, 2022 compared to the three months ended April 30, 2021 primarily due to growth in the number of Networked Charging Systems connected to ChargePoint’s network.
April 30,
Other Revenue 2022 2021 Change
(dollar amounts in thousands)
Three months ended $ 4,436  $ 2,886  $ 1,550  53.7  %
Percentage of total revenue 5.4  % 7.1  %
Other revenue increased during the three months ended April 30, 2022 compared to the three months ended April 30, 2021 mainly due to increased charging related fees received from drivers using charging sites owned and operated by ChargePoint and net transaction fees earned for processing payments collected on driver charging sessions at charging sites owned by ChargePoint’s customers, as well as increased regulatory credits transferred.

Cost of Revenue
Networked Charging Systems
ChargePoint uses contract manufacturers to manufacture the substantial majority of its Networked Charging Systems. ChargePoint’s in-house manufacturing is typically limited to initial development units and to early customer samples. ChargePoint’s cost of revenue for the sale of Networked Charging Systems includes the contract manufacturer costs of finished goods and shipping and handling. For ChargePoint’s limited in-house production, cost of revenue for the sale of Networked Charging Systems also includes parts, labor, manufacturing costs, and allocated facilities and information technology expenses. Cost of revenue for the sale of Networked Charging Systems also consists of salaries and related personnel expenses, including stock-based compensation, warranty provisions, depreciation of manufacturing related equipment and facilities, amortization of capitalized internal-use software, and allocated facilities and information technology expenses. As revenue is recognized, ChargePoint accounts for estimated warranty cost as a charge to cost of revenue. The estimated warranty cost is based on historical and predicted product failure rates and repair expenses.
Subscriptions
Cost of Subscriptions revenue includes salaries and related personnel expenses, including stock-based compensation and third-party support costs to manage the systems and helpdesk services for site hosts, network and wireless connectivity costs for subscription services, field costs for Assure, depreciation of owned and operated systems used in CPaaS arrangements, amortization of capitalized internal-use software development costs, allocated facilities and information technology expenses.
Other
Cost of other revenue includes depreciation and other costs for ChargePoint’s owned and operated charging sites, charging related processing charges, salaries and related personnel expenses, including stock-based compensation, as well as costs of professional services.
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April 30,
Cost of Networked Charging Systems Revenue 2022 2021 Change
(dollar amounts in thousands)
Three months ended $ 56,266  $ 23,742  $ 32,524  137.0  %
Percentage of networked charging systems revenue 94.5  % 88.6  %
Cost of Networked Charging Systems revenue increased during the three months ended April 30, 2022 compared to the three months ended April 30, 2021 primarily due to an increase in the number of Networked Charging Systems delivered.

April 30,
Cost of Subscriptions Revenue 2022 2021 Change
(dollar amounts in thousands)
Three months ended $ 10,628  $ 5,640  $ 4,988  88.4  %
Percentage of subscriptions revenue 60.2  % 52.1  %
Cost of subscriptions revenue increased during the three months ended April 30, 2022 compared to the three months ended April 30, 2021 primarily due to increases in customer support headcount and resulting personnel compensation and stock-based compensation increase driven by ChargePoint expanding its network of charging systems.
April 30,
Cost of Other Revenue 2022 2021 Change
(dollar amounts in thousands)
Three months ended $ 2,632  $ 1,911  $ 721  37.7  %
Percentage of other revenue 59.3  % 66.2  %
Other cost of revenue increased during the three months ended April 30, 2022 compared to the three months ended April 30, 2021 primarily related to higher depreciation of owned and operated charging sites and increased other costs.
Gross Profit and Gross Margin
Gross profit is revenue less cost of revenue and gross margin is gross profit as a percentage of revenue. ChargePoint offers a range of Networked Charging Systems products which vary widely in selling price and associated gross margin. For example the product mix in ChargePoint’s commercial business tends to contribute higher gross margins than its product mix in its residential and fleet businesses. Accordingly, ChargePoint’s gross profit and gross margin have varied and are expected to continue to vary from period to period due to revenue levels; geographic, vertical and product mix; new product introductions, its efforts to optimize its operations and supply chain, and purchase price variances it may need to pay due to component shortages or supply chain interruptions.
In the long term, improvements in ChargePoint’s gross profit and gross margin will depend on its ability to continue to optimize its operations and supply chain as it increases its revenue. However, at least in the short term, as mix continues to vary and as ChargePoint continues to optimize for customer acquisition and prioritize assurance of supply of its products as part of its “land and expand” model, launch new Networked Charging Systems products, grow its presence in Europe where it has not yet achieved economies of scale, and expands its solutions for its fleet customers, gross margin will vary from period to period. In addition, ChargePoint expects gross margins will continue to be adversely affected by increased material costs due to industry-wide component supply shortages, particularly due to the shortage of semiconductors, and increased freight and logistic expenses through at least the remainder of the fiscal year as a result of ongoing worldwide supply chain disruptions.
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April 30,
Gross Profit and Gross Margin 2022 2021 Change
(dollar amounts in thousands)
Three months ended $ 12,107  $ 9,217  $ 2,890  31.4  %
Gross margin 14.8  % 22.8  % (7.9) %
Gross profit increased during the three months ended April 30, 2022 compared to the three months ended April 30, 2021 primarily due to an increase in Subscriptions revenue.
Gross margin decreased during the three months ended April 30, 2022 compared to the three months ended April 30, 2021 primarily due to product mix changes at lower gross margin products performed strongly relative to higher gross margin offerings, and to higher purchase price costs incurred as the result of component shortages and supply chain challenges.
Research and Development Expenses
Research and development expenses consist primarily of salaries and related personnel expenses, including stock-based compensation, for personnel related to the development of improvements and expanded features for ChargePoint’s products and services, as well as quality assurance, testing, product management, amortization of capitalized internal-use software, and allocated facilities and information technology expenses. Research and development costs are expensed as incurred.
ChargePoint expects its research and development expenses to increase on an absolute basis for the foreseeable future as ChargePoint continues to invest in research and development activities to achieve its technology and product roadmap.
April 30,
Research and Development Expenses 2022 2021 Change
(dollar amounts in thousands)
Three months ended $ 48,302  $ 25,374  $ 22,928  90.4  %
Percentage of total revenue 59.2  % 62.6  %
Research and development expenses increased during the three months ended April 30, 2022 compared to the three months ended April 30, 2021 primarily due to a $12.6 million higher personnel costs driven by a $6.8 million increase in salary and bonus expenses due to headcount growth and a $5.3 million increase in stock-based compensation expense mainly from restricted stock unit (“RSU”) grants, and a $8.1 million increase in engineering materials and services costs.
Sales and Marketing Expenses
Sales and marketing expenses consist primarily of salaries and related personnel expenses, including stock-based compensation, sales commissions, professional services fees, travel, marketing and promotional expenses, helpdesk services for drivers, amortization of capitalized internal-use software, credit loss expenses, and allocated facilities and information technology expenses.
ChargePoint expects its sales and marketing expenses to increase on an absolute basis for the foreseeable future while it continues to add sales and marketing personnel, expand its sales channels and expand in Europe.
April 30,
Sales and Marketing Expenses 2022 2021 Change
(dollar amounts in thousands)
Three months ended $ 32,588  $ 15,974  $ 16,614  104.0  %
Percentage of total revenue 39.9  % 39.4  %
Sales and marketing expenses increased during the three months ended April 30, 2022 compared to the three months ended April 30, 2021 primarily due to a $8.2 million higher personnel costs driven by a $5.8 million increase in salary, bonus and commissions due to headcount growth, as well as revenue growth and a $1.9 million increase in stock-based compensation expense resulting mainly from RSU grants, and a $2.3 million increase in amortization of acquired intangible assets and $1.9 million in credit loss reserves.
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General and Administrative Expenses
General and administrative expenses consist primarily of salaries and related personnel expenses, including stock-based compensation, related to finance, legal and human resource functions, contractor and professional services fees, audit and compliance expenses, insurance costs, amortization of capitalized internal-use software and general corporate expenses, including allocated facilities and information technology expenses.
ChargePoint expects its general and administrative expenses to increase in absolute dollars as it continues to grow its business and to operate as a public company, including expenses necessary to comply with the rules and regulations applicable to companies listed on a national securities exchange and related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, as well as higher expenses for director and officer insurance, investor relations and legal, accounting and other professional services.
April 30,
General and Administrative Expense 2022 2021 Change
(dollar amounts in thousands)
Three months ended $ 21,047  $ 14,467  $ 6,580  45.5  %
Percentage of total revenue 25.8  % 35.7  %
General and administrative expenses increased during the three months ended April 30, 2022 compared to the three months ended April 30, 2021 primarily due to a $4.1 million higher personnel costs driven by headcount growth, a $1.7 million increase in consulting services, and $1.0 million increase in professional service fees related to merger and acquisitions.
Interest Income
Interest income consists primarily of interest earned on ChargePoint’s cash, cash equivalents and short-term investments.
April 30,
Interest Income 2022 2021 Change
(dollar amounts in thousands)
Three months ended $ 106  $ 22  $ 84  384.0  %
Percentage of total revenue 0.1  % 0.1  %
Interest income increased during the three months ended April 30, 2022 as compared to the three months ended April 30, 2021 due to higher cash and cash equivalent balances primarily attributable to the cash received from the 2027 Convertible Notes.
Interest Expense
Interest expense consists primarily of the interest on ChargePoint’s term loan which was paid off in March 2021, and the 2027 Convertible Notes issued in April 2022.
April 30,
Interest Expense 2022 2021 Change
(dollar amounts in thousands)
Three months ended $ (933) $ (1,499) $ 566  (37.8) %
Percentage of total revenue (1.1) % (3.7) %
Interest expense decreased during the three months ended April 30, 2022 compared to the three months ended April 30, 2021 primarily due to repayment of the term loan in March 2021. As of April 30, 2022, ChargePoint had an aggregate of $300.0 million in outstanding 2027 Convertible Notes which mature in April 2027.

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Change in Fair Value of Redeemable Convertible Preferred Stock Warrant Liability
Redeemable convertible preferred stock warrant liability was subject to remeasurement to fair value at each balance sheet date. Changes in fair value of redeemable convertible preferred stock warrant liability were recognized in the condensed consolidated statements of operations. ChargePoint adjusted the liability for changes in fair value until the earlier of the exercise or expiration of the warrants and conversion of redeemable convertible preferred stock into Common Stock.
April 30,
Change in Fair Value of Redeemable Convertible Preferred Stock Warrant Liability 2022 2021 Change
(dollar amounts in thousands)
Three months ended $ —  $ 9,237  $ (9,237) (100.0) %
Percentage of total revenue —  % 22.8  %
The change in fair value of redeemable convertible preferred stock warrant liability during the three months ended April 30, 2022 compared to the three months ended April 30, 2021 was primarily due to changes in the fair value of Legacy ChargePoint’s redeemable convertible preferred stock through the date of the Merger. As of April 30, 2022, ChargePoint had no outstanding redeemable convertible preferred stock warrant liabilities.
Change in Fair Value of Common Stock Warrant Liabilities
Common stock warrant liabilities consisted of publicly-traded warrants (“Public Warrants”) and private placement warrants issued to NGP Switchback, LLC. (“Private Placement Warrants”) which ChargePoint assumed in connection with the Merger and which were subject to remeasurement to fair value at each balance sheet date. As of April 30, 2022 all Public Warrants and Private Placement Warrants have been exercised or redeemed.
April 30,
Change in Fair Value of Common Stock Warrant Liability 2022 2021 Change
(dollar amounts in thousands)
Three months ended $ (24) $ 43,761  $ (43,785) (100.1) %
Percentage of total revenue —  % 108.0  %
ChargePoint recognized a $0.02 million loss during the three months ended April 30, 2022 due to the change in the fair value of Common Stock warrants.
ChargePoint recognized a $43.8 million gain during the three months ended April 30, 2021 due to the change in the fair value of Common Stock warrants.

Change in Fair Value of Contingent Earnout Liability

Contingent earnout liability was accounted for as a liability as of the date of the Merger and remeasured to fair value until the Earnout Triggering Events (as described in Note 10 to the condensed consolidated financial statements) were met for the first two tranches in March 2021 and the corresponding Earnout Shares (as described in Note 10 to the condensed consolidated financial statements) were issued. In March 2021, the remaining earnout liability converted to be accounted for as equity. The Earnout Triggering Event was met for the third and final tranche in June 2021, and in July 2021 the remaining Earnout Shares were issued.
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April 30,
Change in Fair Value of Contingent Earnout Liability 2022 2021 Change
(dollar amounts in thousands)
Three months ended $ —  $ 84,420  $ (84,420) (100.0) %
Percentage of total revenue —  % 208.4  %
ChargePoint did not incur any change in fair value of contingent earnout liability during the three months ended April 30, 2022; it incurred $84.4 million in fair value of contingent earnout liability for the three months ended April 30, 2021 due to the decrease in the fair value of ChargePoint’s Common Stock after consummation of the Merger.
Transaction Costs Expensed
Transaction costs consist of legal, accounting, banking fees and other costs that were directly related to the consummation of the Merger. Transaction costs related to the issuance of shares were recognized in stockholders’ equity (deficit) while costs associated with the warrant liabilities and non-capitalized amounts were expensed in the condensed consolidated statements of operations upon the completion of the Merger on February 26, 2021.

April 30,
Transaction Costs Expensed 2022 2021 Change
(dollar amounts in thousands)
Three months ended $ —  $ (7,031) $ 7,031  (100.0) %
Percentage of total revenue —  % (17.4) %
During the three months ended April 30, 2022, ChargePoint had no transaction cost; during the three months ended April 30, 2021, ChargePoint expensed $7.0 million out of $36.5 million total transaction costs, that related to the warrant liabilities assumed as part of the Merger.
Other Income (Expense), Net
Other income (expense), net consists primarily of foreign currency transaction gains and losses.

April 30,
Other Income (Expense), net 2022 2021 Change
(dollar amounts in thousands)
Three months ended $ (447) $ 15  $ (462) (3080.0) %
Percentage of total revenue (0.5) % —  %
Other expenses increased during the three months ended April 30, 2022 as compared to the three months ended April 30, 2021, due to unfavorable changes in foreign exchange rates.
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Provision for (Benefit from) Income Taxes
ChargePoint’s provision for income taxes consists of federal, state and foreign income taxes based on enacted federal, state and foreign tax rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities and changes in tax law. Due to the level of historical losses, ChargePoint maintains a valuation allowance against U.S. federal and state deferred tax assets as it has concluded it is more likely than not that these deferred tax assets will not be realized.
April 30,
Provision for (Benefit from) Income Taxes 2022 2021 Change
(dollar amounts in thousands)
Three months ended $ (1,862) $ 38  $ (1,900) (5000.0) %
Percentage of profit/(loss) before provision for income taxes 2.0  % —  %
The benefit for income taxes increased during the three months ended April 30, 2022 as compared to the three months ended April 30, 2021 primarily due changes to deferred tax liability following a tax rate reduction in certain foreign jurisdictions.

Liquidity and Capital Resources
Sources of Liquidity
Historical Sources of Liquidity
ChargePoint has incurred net losses and negative cash flows from operations since its inception, which it anticipates will continue for the foreseeable future. To date, ChargePoint has funded its business primarily with proceeds from the issuance of redeemable convertible preferred stock, proceeds from the Merger, proceeds from the issuance of debt, including the 2027 Convertible Notes, proceeds from warrant and option exercises for cash, and from customer payments. As of April 30, 2022, ChargePoint had cash, cash equivalents and restricted cash of $541.0 million. ChargePoint believes that its cash on hand and cash generated from sales to customers will satisfy its working capital and capital requirements for at least the next twelve months.
From inception to April 30, 2022, ChargePoint has primarily raised cash proceeds from the sale of shares of redeemable convertible preferred stock and Common Stock, proceeds from debt, such as the 2027 Convertible Notes, and proceeds from the exercise of warrant and stock options.
In March 2021, ChargePoint repaid the entire 2018 Loan (as described in footnote 7. to the condensed consolidated financial statements) balance of $35.0 million plus accrued interest and prepayment fees of $1.2 million.
2027 Convertible Notes
In April 2022, the Company completed a private placement of $300.0 million aggregate principal amount of 2027 Convertible Notes, which will mature on April 1, 2027. 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 estimated offering expenses. The Company expects to use the net proceeds for general corporate purposes.
The 2027 Convertible Notes bears interest at 3.50% per annum, to the extent paid in cash (“Cash Interest”), which is payable semi-annually in arrears on April 1st and October 1st of each year or 5.00% per annum through the issuance of additional 2027 Convertible Notes (“PIK Interest”). 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.
For additional details refer to Part I, Item 1, Note 7, “Debt,” in the Company’s notes to condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

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Long-Term Liquidity Requirements
Until ChargePoint can generate sufficient revenue to cover its cost of sales, operating expenses, working capital and capital expenditures, it expects to primarily fund cash needs through a combination of equity and debt financing. If ChargePoint raises funds by issuing equity securities or debt securities convertible into equity securities, dilution to stockholders may result. Any equity securities issued may also provide for rights, preferences or privileges senior to those of holders of Common Stock. If ChargePoint raises funds by issuing debt securities, these debt securities would have rights, preferences and privileges senior to those of holders of Common Stockholders. The terms of debt securities or borrowings could impose significant restrictions on ChargePoint’s operations. The capital markets have in the past, and may in the future, experience periods of higher volatility that could impact the availability and cost of equity and debt financing.
ChargePoint’s principal use of cash in recent periods has been funding its operations, the acquisitions of ViriCiti and HTB, and investing in capital expenditures. ChargePoint’s future capital requirements will depend on many factors, including its revenue growth rate, the timing and the amount of cash received from customers, the expansion of sales and marketing activities, the timing and extent of spending to support development efforts, expenses associated with its international expansion, the introduction of network enhancements and the continuing market adoption of its Networked Charging Systems. In the future, ChargePoint may enter into arrangements to acquire or invest in complementary businesses, products and technologies. ChargePoint may be required to seek additional equity or debt financing.
If ChargePoint requires additional financing, it may not be able to raise such financing on acceptable terms or at all. If ChargePoint is unable to raise additional capital or generate cash flows necessary to expand its operations and invest in continued innovation, it may not be able to compete successfully, which would harm its business, results of operations and financial condition. If adequate funds are not available, ChargePoint may need to reconsider its expansion plans or limit its research and development activities, which could have a material adverse impact on its business prospects and results of operations.

Cash Flows
For the Three Months Ended April 30, 2022 and 2021
The following table sets forth a summary of ChargePoint’s cash flows for the periods indicated:
Three Months Ended
April 30,
2022 2021
(in thousands)
Net cash (used in) provided by:
Operating activities $ (70,821) $ (37,539)
Investing activities (5,946) (4,138)
Financing activities 303,118  505,988 
Effects of exchange rates on cash, cash equivalents, and restricted cash (1,003)
Net increase in cash, cash equivalents, and restricted cash $ 225,348  $ 464,318 

Net Cash Used in Operating Activities
During the three months ended April 30, 2022, net cash used in operating activities was $70.8 million, consisting primarily of a net loss of $89.3 million and non-cash charges of $23.8 million, partially offset by an increase in net operating assets of $5.4 million. The increase in net operating assets was primarily due to a $10.3 million increase in prepaid expenses and other assets, a $9.8 million increase in inventories, a $5.9 million increase in accounts receivable and a $1.2 million decrease in operating lease liabilities partially offset by a $10.7 million increase in deferred revenue, a $8.4 million increase in accrued and other liabilities and a $2.8 million increase in accounts payable. The non-cash charges primarily consisted of $15.5 million of stock-based compensation expense, $6.8 million of depreciation, amortization expense and amortization of deferred contract acquisition costs, $1.2 million of non-cash operating lease cost and $0.3 million of inventory reserves and other costs.
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During the three months ended April 30, 2021, net cash used in operating activities was $37.5 million, consisting primarily of a net income of $82.3 million, fully offset by an increase in net operating assets of $2.2 million and non-cash charges of $117.6 million. The increase in net operating assets was primarily attributable to a $6.2 million increase in prepaid expenses and other assets, a $5.0 million decrease in accrued and other liabilities, a $3.5 million decrease in accounts payable and a $0.4 million decrease in operating lease liabilities largely offset by a $7.8 million increase in deferred revenue and a $4.9 million decrease in inventories. The non-cash charges primarily consisted of a $84.4 million change in fair value of contingent earnout liability, a $43.8 million change in fair value of common stock warrant liabilities and a $9.2 million change in fair value of redeemable convertible preferred stock warrant liability, partially offset by $7.6 million of stock-based compensation expense, $7.0 million of transaction costs expensed, $2.7 million of depreciation and amortization expense, and $1.0 million of non-cash operating lease cost.
Net Cash (Used In) Provided by Investing Activities
During the three months ended April 30, 2022, net cash used in investing activities was $5.9 million consisting of cash paid for acquisitions (net of cash acquired) of $2.8 million and purchases of property and equipment of $3.2 million.
During the three months ended April 30, 2021, net cash used in investing activities was $4.1 million for purchases of property and equipment.
Net Cash Provided by Financing Activities
During the three months ended April 30, 2022, net cash provided by financing activities was $303.1 million, consisting of net proceeds from issuance of debt of $296.0 million, proceeds from the issuance of common stock under employee equity plans of $4.7 million, net of tax withholdings, and change in driver funds and amounts due to customers of $2.4 million.
During the three months ended April 30, 2021, net cash provided by financing activities was $506.0 million consisting of net proceeds from Merger and PIPE financing of $481.5 million and proceeds from the exercise of warrants of $73.3 million, partially offset by repayment of borrowings of $36.1 million and taxes paid related to net share settlement of earnout shares of $12.8 million.
Off-Balance Sheet Arrangements
ChargePoint is not a party to any off-balance sheet arrangements.
Critical Accounting Policies and Estimates
The Company’s discussion and analysis of its financial condition and results of operations are based upon its condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these condensed consolidated financial statements requires ChargePoint to make estimates and assumptions that affect the reported amounts of assets, liabilities, net sales and expenses. The Company evaluates its estimates and assumptions on an ongoing basis, and base its estimates on historical experience and on various other assumptions that ChargePoint believes to be reasonable under the circumstances, the results of which form the basis for the judgments ChargePoint makes about the carrying value of assets and liabilities that are not readily apparent from other sources. Because these estimates can vary depending on the situation, actual results may differ from these estimates. Making estimates and judgments about future events is inherently unpredictable and is subject to significant uncertainties, some of which are beyond ChargePoint’s control. Should any of these estimates and assumptions change or prove to have been incorrect, it could have a materi