California-based electric vehicle (EV) charging firm ChargePoint reported a fourth-quarter (Q4) 2024 revenue that was 24% lower than last year as slowing EV adoption impacted commercial sales.

Quarterly revenue fell to $115.8 million from $152.8 million. The decline was driven by a 39% year-over-year (YoY) drop in networked charging systems revenue to $74 million and lower hardware sales to commercial customers in Europe. High interest rates and macroeconomic uncertainty also impacted revenue.

However, subscription revenue increased 30% to $33.5 million, highlighting ChargePoint’s transition towards higher-margin recurring revenue streams.

Net loss widened to $94.7 million from $78.7 million in the year-ago quarter. The non-GAAP adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss was $45.3 million compared to $42.1 million in Q4 2023. The wider losses reflect increased operating expenses, which rose 3.6%.

On the earnings call, CEO Rick Wilmer cited hesitation from commercial customers due to noise questioning EV adoption rates despite continuing EV sales growth. “Institutions want EV charging but are hesitant to commit at a time when the news is questioning EV adoption. They are still buying but not as freely or quickly as they were last year,” said Wilmer.

Full Year 2024

ChargePoint’s revenue for FY 2024 grew by 8% to $506.6 million from $468.1 million last year, driven by higher revenue from the subscription-based model.

Networked charging systems’ revenue of $360.8 million was essentially flat year-over-year. However, the high-margin subscription revenue jumped 41% to $120.4 million, representing 24% of total revenue for the year.

Net loss widened to $457.6 million from $345.1 million in the prior year, while non-GAAP adjusted EBITDA loss increased to $272.7 million from $217 million in FY 2023. The wider losses were due to lower gross margins, which fell to 6% from 18% in 2023 due to inventory impairment charges.

The company expects gradual gross margin improvement in FY 2025 from continued cost reductions and higher subscription margins, according to CFO Mansi Khetani on the earnings call.

In the previous quarter, ChargePoint’s revenue fell 12%, hurt by lower demand from commercial customers and supply chain snags.

According to a study published by BloombergNEF, ChargePoint led the charging infrastructure market in the U.S. in 2023.