ChargePoint (NYSE:CHPT) Reports Sales Below Analyst Estimates In Q1 Earnings, Stock Drops 10.3%

EV charging solutions provider ChargePoint Holdings (NYSE:CHPT) missed Wall Street’s revenue expectations in Q1 CY2025, with sales falling 8.8% year on year to $97.64 million. Next quarter’s revenue guidance of $95 million underwhelmed, coming in 12.4% below analysts’ estimates. Its non-GAAP loss of $0.12 per share was significantly below analysts’ consensus estimates.

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Company Overview

The most prominent EV charging company during the COVID bull market, ChargePoint (NYSE:CHPT) is a provider of electric vehicle charging technology solutions in North America and Europe.

Sales Growth

A company’s long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Luckily, ChargePoint’s sales grew at an incredible 18.1% compounded annual growth rate over the last five years. Its growth beat the average industrials company and shows its offerings resonate with customers.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. ChargePoint’s recent performance marks a sharp pivot from its five-year trend as its revenue has shown annualized declines of 11.2% over the last two years. ChargePoint isn’t alone in its struggles as the Renewable Energy industry experienced a cyclical downturn, with many similar businesses observing lower sales at this time.

ChargePoint also breaks out the revenue for its most important segments, Networked Charging Systems and Subscriptions, which are 53.3% and 38.9% of revenue. Over the last two years, ChargePoint’s Networked Charging Systems revenue (hardware) averaged 22.9% year-on-year declines. On the other hand, its Subscriptions revenue (software) averaged 26.7% growth.

This quarter, ChargePoint missed Wall Street’s estimates and reported a rather uninspiring 8.8% year-on-year revenue decline, generating $97.64 million of revenue. Company management is currently guiding for a 12.5% year-on-year decline in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 17.3% over the next 12 months, an improvement versus the last two years. This projection is eye-popping and suggests its newer products and services will spur better top-line performance.

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Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

ChargePoint’s high expenses have contributed to an average operating margin of negative 78.9% over the last five years. Unprofitable industrials companies require extra attention because they could get caught swimming naked when the tide goes out. It’s hard to trust that the business can endure a full cycle.

On the plus side, ChargePoint’s operating margin rose by 30.7 percentage points over the last five years, as its sales growth gave it operating leverage. Still, it will take much more for the company to reach long-term profitability.

This quarter, ChargePoint generated a negative 55.1% operating margin. The company's consistent lack of profits raise a flag.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Although ChargePoint’s full-year earnings are still negative, it reduced its losses and improved its EPS by 43.8% annually over the last four years. The next few quarters will be critical for assessing its long-term profitability. We hope to see an inflection point soon.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For ChargePoint, its two-year annual EPS growth of 21.3% was lower than its four-year trend. We still think its growth was good and hope it can accelerate in the future.

In Q1, ChargePoint reported EPS at negative $0.12, down from negative $0.11 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street is optimistic. Analysts forecast ChargePoint’s full-year EPS of negative $0.39 will reach break even.

Key Takeaways from ChargePoint’s Q1 Results

We struggled to find many positives in these results as its revenue, EPS, and EBITDA missed. Its revenue guidance for next quarter also fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 10.3% to $0.79 immediately after reporting.

ChargePoint underperformed this quarter, but does that create an opportunity to invest right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.