Volta Eases Off Rollout Accelerator; Cutting Staff And Pulling Back DOOH Ad Revenue Forecast
October 3, 2022 by Dave Haynes
The Digital OOH media company Volta has been announcing aggressive rollout plans at the same time as financial filings show a company burning through investor dollars, and now there’s word the San Francisco start-up is easing off the accelerator and tapping the brakes.
The company has announced an “organizational realignment to reduce costs and drive strategic priorities” – with a 10% cut in staffing that adds on to earlier headcount reductions that have shaved the payroll by almost one-fifth since late spring.
The cost efficiency measures announced today intend to align Volta’s business with current market conditions. In addition to the risk factors outlined in Volta’s previous disclosures, these factors include: the advertising environment, particularly as automotive brands delay advertising spend due to inventory shortages; limited electrical transformer availability affecting DC Fast charger installations; and the impact of the Q4 shopping season on construction availability at commercial properties.
Given the ongoing execution of Volta’s strategic reprioritization, combined with these market conditions and an uncertain macroeconomic environment, the company is revising its Q3 revenue guidance to between $13.5 million and $14.5 million. Furthermore, the company is withdrawing its full year 2022 revenue and install guidance until further notice. Volta remains committed to securing additional funding — including government incentives that will become available in 2023 — and pursuing further cost savings initiatives.
Volta’s business model is based on deploying electric vehicle charging stations in busy parking lots (like grocery stores) and running advertising on the built-in digital ad posters. The last financial reporting (the company is public) showed the company is burning through a lot of money, with losses of $48M and $65M in the previous two quarters. But the capital build-out phase is unavoidably expensive, and will top out at some point. Volta said in its last reporting period that full year 2022 revenue is expected to be in the range of $70M-$80M, but as noted in this PR, that forecast has been pulled back.
The company has some 2,300 double-sided display stations deployed in the U.S.
Along with staff cuts, the company says it is focused on:
- Delivering Additional Cost Savings: Volta is implementing additional cost savings initiatives through tightening business processes, limiting the use of outside consultants, consolidating teams and its three San Francisco offices into one, and managing marketing and administrative costs;
- Competing for Federal Funds: Volta’s model is attractive to municipalities, as demonstrated by its recent collaboration with the City of Hoboken. The company’s dedicated team is well-positioned as a public-private partner for state and federal government funding, as evidenced by Volta’s relationship with the State of Michigan and DTE Energy. Volta intends to continue prioritizing EV charger installations that qualify for government-provided funds by leveraging its award-winning PredictEV infrastructure planning software. By analyzing multiple data sources, including local economic and equity data, PredictEV can identify locations within the company’s pipeline of more than 8,200 EV charging stalls signed or covered under master service agreements (MSAs) that satisfy the government’s requirements.
“The Volta Board of Directors and senior executives are taking difficult but important steps to align the business with current market dynamics and position the company for long-term success,” says Vince Cubbage, Interim Chief Executive Officer of Volta. “Despite near-term challenges, there is significant opportunity ahead in the EV charging market as adoption accelerates and federal funding for EV infrastructure is deployed. We are evaluating every aspect of the business to set Volta up to capture this opportunity through disciplined management, preservation of capital, reduction of operating expenses, and an increased focus on public-private partnerships that more efficiently grow our network and satisfy the needs of all of our stakeholders.”