"We fully expect that to drive incremental growth, and there is a lot of work to do this quarter in particular to operationalize this relationship. We fully expect to hit our stride and have this, again, fully operationalized as we enter our fiscal Q3." - Rick Wilmer
ChargePoint Holdings Inc (CHPT) QQ1 2026 Results Analysis: Positioning for Growth through Eaton Partnership and New AC Hardware Amid Tariff Uncertainty
Executive Summary
ChargePoint reported Q1 FY2026 revenue of $97.64 million with a non-GAAP gross margin of 31% and an improved SaaS gross margin of 60%, signaling ongoing leverage in the company’s recurring-revenue mix. The quarter delivered a GAAP net loss of $57.1 million and a non-GAAP EBITDA loss of $23.0 million, reflecting ongoing investment in growth initiatives and cost discipline as management navigates tariff headwinds and macro uncertainty. Management highlighted two major catalysts for earnings expansion: (1) the Eaton partnership, which is expected to provide incremental revenue and a go-to-market engine across a broad base of customers, and (2) a new AC hardware architecture designed to reduce cost and lift hardware volume, beginning with a July production in Europe. Management reaffirmed a cautious near-term revenue outlook for Q2, guiding $90–$100 million, while expressing confidence that margins will improve later in the year as the Eaton-enabled growth initiatives scale and the AC hardware ramp gains momentum. The company remains focused on achieving positive adjusted EBITDA in a single quarter during fiscal 2026, with continued emphasis on gross margin expansion, cost management, and inventory normalization. The market backdrop shows accelerating EV adoption in North America and Europe, but with persistent macro headwinds, tariff-related uncertainties, and competitive dynamics that could influence uptake and deployment timing.
Key Performance Indicators
Revenue
97.64M
QoQ: -4.17% | YoY:-8.78%
Gross Profit
27.99M
28.66% margin
QoQ: -2.49% | YoY:18.53%
Operating Income
-53.84M
QoQ: 2.02% | YoY:19.81%
Net Income
-57.12M
QoQ: 2.86% | YoY:20.44%
EPS
-2.49
QoQ: -1 815.38% | YoY:-1 364.71%
Revenue Trend
Margin Analysis
Key Insights
Revenue: $97.64 million, down 8.78% YoY and down 4.17% QoQ per earnings metrics. North America accounted for ~85% of revenue; Europe for ~15%, with Europe weaker driven by Germany.
Gross Profit: $27.99 million, gross margin 28.66% (GAAP). Non-GAAP gross margin was 31%, up 1 percentage point QoQ and up 7 percentage points YoY, aided by higher hardware and subscription margins and the mix shift toward recurring revenue.
Gross Margin Drivers: Hardware gross margin rose sequentially despite tariffs and freight; subscription gross margin reached a record 60% (GAAP), with non-GAAP margins supported by economies of scale and cost optimization in support functions.
Operating Expenses and EBITDA: Non-GAAP operating expenses $57.0 million, up 9% sequentially and down 15% YoY. Non-GAAP adjusted EBITDA loss of $23.0 million versus a loss of $17.0 million in the prior quarter and $36.0 million in the prior-year Q1.
Net Income and EPS: Net loss of $57.1 million; basic/diluted EPS of -$2.49.
Financial Highlights
Overview of financial performance and trend highlights for QQ1 2026 (USD, unaudited):
- Revenue: $97.64 million, down 8.78% YoY and down 4.17% QoQ per earnings metrics. North America accounted for ~85% of revenue; Europe for ~15%, with Europe weaker driven by Germany.
- Gross Profit: $27.99 million, gross margin 28.66% (GAAP). Non-GAAP gross margin was 31%, up 1 percentage point QoQ and up 7 percentage points YoY, aided by higher hardware and subscription margins and the mix shift toward recurring revenue.
- Gross Margin Drivers: Hardware gross margin rose sequentially despite tariffs and freight; subscription gross margin reached a record 60% (GAAP), with non-GAAP margins supported by economies of scale and cost optimization in support functions.
- Operating Expenses and EBITDA: Non-GAAP operating expenses $57.0 million, up 9% sequentially and down 15% YoY. Non-GAAP adjusted EBITDA loss of $23.0 million versus a loss of $17.0 million in the prior quarter and $36.0 million in the prior-year Q1.
- Net Income and EPS: Net loss of $57.1 million; basic/diluted EPS of -$2.49.
- Cash Flow and Liquidity: Net cash provided by operating activities was negative $32.97 million; free cash flow was negative $34.03 million. Cash balance ended at $196.35 million; the company has a $150 million undrawn revolving credit facility and no debt maturities until 2028. Net debt stood at approximately $126.25 million.
- Balance Sheet: Total assets $897.61 million; total liabilities $779.02 million; total stockholders’ equity $118.59 million. Cash and cash equivalents $195.95 million; accounts receivable $98.69 million; inventory $212.43 million; long-term debt $322.20 million; deferred revenue $128.40 million (current) and $135.96 million (non-current). Inventory balance increased modestly by $3.00 million driven by FX effects, with ongoing sell-through supporting gradual reduction later in the year.
- Guidance: Q2 FY2026 revenue guidance of $90–$100 million. Tariff exposure viewed as minimal to COGS, with margins expected to improve later in the year. Strategy emphasizes revenue growth, gross margin expansion, and cost discipline to reach positive adjusted EBITDA in at least one quarter in FY2026.
- Operational Highlights: Over 352,000 ports under management with 35,000+ DC fast chargers; Europe hosts over 122,000 ports; roaming partnerships provide access to 1.25 million charging ports globally. GM collaboration expanded with over 500 GM ports signed for deployment; Mercedes-Benz agreements extended; theft-resistant charging cable slated for production; software management platform Deenergized supports over 700 charger models from >85 vendors.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
97.64M
-8.78%
-4.17%
Gross Profit
27.99M
18.53%
-2.49%
Operating Income
-53.84M
19.81%
2.02%
Net Income
-57.12M
20.44%
2.86%
EPS
-2.49
-1 364.71%
-1 815.38%
Key Financial Ratios
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Key management takeaways from the QQ1 earnings call (themes and context):
- Strategy and Growth Initiatives
- Eaton partnership announced as a core catalyst for growth and market expansion. Rick Wilmer stated the partnership will deliver end-to-end EV charging, electrical infrastructure, energy management, and engineering services, leveraging Eaton’s global go-to-market engine (nearly $25B in annual sales). Quote: We fully expect that [the Eaton partnership] to drive incremental growth, and there is a lot of work to do this quarter in particular to operationalize this relationship. We fully expect to hit our stride and have this, again, fully operationalized as we enter our fiscal Q3.
- New AC hardware architecture introduced as a lower-cost co-development line, intended to boost volume in the US and expand European penetration where ChargePoint had limited product presence. Quote: This is the first product line developed utilizing our lower-cost co-development structure and will enter the market at a highly competitive price point while still increasing our margins.
- Operational Execution and Tariffs
- Management highlighted tariffs as a near-term headwind but expecting only a minimal impact on COGS and margin expansion as mitigations take hold. CFO comments emphasized gross margin resilience with current tariff costs anticipated to be absorbed and further improvements as the year progresses.
- Market Environment and Growth Levers
- The company cited meaningful EV adoption momentum in North America (12-month YoY growth in NA EV sales around 16%) and Europe (22% YoY growth), with Europe’s policy backdrop (EU Green Deal) reinforcing long-term demand for charging infrastructure. Town-hall commentary underscored the market’s need for more chargers in peak-utilization cities, creating a favorable backdrop for ChargePoint’s growth platforms.
- Operational Milestones
- ChargePoint noted over 352k ports managed, 35k+ DC fast chargers, 122k+ ports in Europe, and roaming access to 1.25 million charging ports globally, highlighting the company’s scale and ecosystem advantages that can be leveraged via Eaton’s distribution network.
- Q&A Signals on Growth Cadence
- The Q&A touched on international expansion potential via Eaton and whether Eaton could facilitate expansion beyond Europe and North America; management indicated current focus remains on NA and Europe, with potential for new geographies via partnerships.
We fully expect that to drive incremental growth, and there is a lot of work to do this quarter in particular to operationalize this relationship. We fully expect to hit our stride and have this, again, fully operationalized as we enter our fiscal Q3.
— Rick Wilmer
This is the first product line developed utilizing our lower-cost co-development structure and will enter the market at a highly competitive price point while still increasing our margins.
— Rick Wilmer
Forward Guidance
Outlook and catalysts for the balance of FY2026:
- Revenue trajectory: Q2 revenue guide of $90–$100 million implies mid-single-digit sequential decline against the prior quarter, reflecting normal seasonality and ongoing macro considerations. Management signaled upside later in the year from the AC hardware ramp, Europe normalization, and acceleration from the Eaton partnership as operationalized in Q3.
- Margin progression: Management expects gross margin to remain around the current range with further improvements as tariffs impact is contained and as the AC hardware program scales and leverages a lower-cost architecture. The SaaS portion is already contributing robust margins (60% subscription margin on a GAAP basis; 31% non-GAAP gross margin overall).
- Cash flow and capital structure: The company emphasizes cash management with undrawn liquidity facilities and no near-term debt maturities (2028). Free cash flow remains negative in QQ1, consistent with a growth posture, but inventory reductions are anticipated to improve cash conversion in the second half.
- Operational milestones to monitor:
- Execution of Eaton collaboration and expansion into additional geographies (if pursued).
- European production ramp for the first AC charger as July production commences and subsequent models roll out over the year.
- Continued improvement in Europe performance and incremental contribution from new AC hardware and Roaming/enterprise deals.
- Bottom-line inference: ChargePoint remains in a strategic investment phase with a goal of achieving positive adjusted EBITDA in a quarter during FY2026. Achieving that target will depend on successful integration of Eaton offerings, continued gross margin expansion, and favorable mix shift toward higher-margin SaaS and managed services.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
CHPT Focus
28.66%
N/A
N/A
N/A
BBY
23.30%
3.70%
7.98%
16.36%
BLNK
35.50%
-1.02%
-20.20%
-1.14%
EVGO
12.40%
-44.40%
70.80%
-2.71%
LCID
-97.20%
-2.94%
-11.50%
-5.02%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Base case: ChargePoint demonstrates meaningful progress toward sustainability in profitability through a combination of margin expansion (driven by higher subscription mix and AC hardware ramp), cost discipline, and the Eaton partnership’s incremental revenue opportunities. The company’s balance sheet remains reasonably solid for a growth-stage player, with liquidity to support ramp and investments in R&D, sales, and marketing. The near-term revenue trajectory is constrained by macro weakness and tariff uncertainty, but the long-run opportunity from Europe’s EV adoption, US market growth, and end-to-end charging solutions could support a multi-year expansion in revenue and margin mix. Investors should monitor: (1) progress in operationalizing the Eaton collaboration and any geographic expansion beyond NA/Europe, (2) quarterly margin progression, especially on hardware, (3) rate of inventory normalization and cash conversion, (4) Europe demand and production ramp timing, and (5) the company’s ability to achieve positive adjusted EBITDA in a quarter during FY2026. Upside scenarios include faster-than-expected ramp of Eaton offerings and European hardware adoption, while downside risks include protracted tariff impacts and slower-than-expected market uptake for new AC hardware. Overall, CHPT remains a speculative-but-trajectory-improving name in the EV charging space, with tangible catalysts that could unlock improved profitability if execution milestones align with market demand.
Key Investment Factors
Growth Potential
Growth drivers include (i) Eaton end-to-end charging and power-management solutions enabling faster deployments and reduced customer costs, (ii) the AC hardware architecture expansion driving higher hardware volumes in the US and Europe, (iii) Europe expansion and higher utilization from roaming partnerships, and (iv) continued expansion of SaaS and software-management solutions (Deenergized) with broad vendor compatibility.
Profitability Risk
Key risks include: (i) tariff volatility and macro headwinds affecting customer capex and deployment timelines, (ii) execution risk in rapidly scaling the Eaton partnership and integrating new solutions, (iii) competitive intensity from other charging networks and hardware providers, (iv) potential delays in European production ramp and regulatory shifts, (v) ongoing profitability pressure given high R&D and sales/marketing spend in a growth phase, (vi) reliance on a multi-year, large-scale network deployment cycle with long payback horizons.
Financial Position
Solid liquidity with $196.35 million cash, undrawn $150 million revolver, no debt maturities before 2028, and net debt of approximately $126.25 million. Balance sheet shows sizable intangibles and goodwill (Gross/Intangibles: $289.13 million; Goodwill $221.18 million) and working capital nuances (current ratio ~1.82). While operating performance remains loss-making on a GAAP basis, gross margins have improved YoY and non-GAAP EBITDA losses have narrowed, signaling progress toward a more favorable cost structure and potential for profitability as the growth initiatives scale.
Large and expanding global charging network with 352k ports under management; 122k+ ports in Europe
Significant ecosystem and roaming capabilities (1.25 million ports accessible via roaming)
Strategic partnership with Eaton enabling end-to-end solutions (grid-to-dashboard) and access to Eaton’s global go-to-market engine (~$25B annual sales)
Recent hardware and software innovations (AC hardware architecture; theft-resistant cable)
Leverage of existing relationships with Mercedes-Benz and GM to accelerate deployments
Weaknesses
GAAP net loss persists (-$57.1M) with negative EBITDA (-$43.1M) and negative cash flow from operations (-$32.97M) in QQ1
High working capital intensity (inventory $212.43M) and reliance on favorable macro conditions for deployment cycles