ChargePoint (NYSE: CHPT) was an easy company to root for and invest in amid the powerful, early hype surrounding electric vehicles (EV). As far as investing theses went, it had a rather simple one: The world needed EV charging infrastructure badly, and ChargePoint was one of few leaders with its network of 30,000 charging spots.

However, that investment thesis has been incredibly slow to play out for ChargePoint, and its second quarter results serve as another reminder of its challenges.

The good news

The news out of ChargePoint's second quarter wasn't all bad. Adjusted gross margins increased to 26%, which was a massive jump over the prior year's 3% and the third consecutive quarter of growth. Over those same three quarters, ChargePoint's GAAP operating expenses as a percentage of revenue declined, with the second-quarter metric checking in at 81%.

Another positive takeaway was that second-quarter subscription revenue came in at $36 million, which was good for 21% year-over-year growth. In a bid perhaps to raise investor confidence, management has implemented an action plan to create efficiencies while further reducing operating expenses.

The bad news

On the bad side of things, growth continues to be a challenge for the company. Second-quarter revenue clocked in at $108.5 million, down 28% from the prior year's $150.5 million and missing analysts' estimates. Much of that decline was driven by networked charging systems revenue, which posted a 44% decline compared to the prior year.

ChargePoint also announced plans to cut 15% of its workforce after posting slower growth. It's a more concerning trend when you consider that in September 2023 it already cut roughly 10% of its workforce. The reorganization is expected to result in restructuring costs of roughly $10 million.

Cash burn continues to be a primary concern with investors although the company does have cash and cash equivalents of $243.7 million, $150 million that remains undrawn in its revolving credit facility, and no debt maturing until 2028.

CHPT Cash and Equivalents (Quarterly) data by YCharts

Questions remain

Another large concern facing ChargePoint is growing competition at a time of slow growth. Tesla is well known for its much larger collection of fast-charging ports (numbering more than 50,000), and after opening up its charging technology to other automakers, it has inked a number of partnerships and deals to license its North American Charging Standard (NACS) ports.

Further, recently Toyota became the eighth automaker to join Ionna, a young EV fast-charging network with plans to build 30,000 high-power fast-charging connectors. It's a concerning sign that automakers may prefer to build out their own networks in hopes of improving customer satisfaction and potentially generating their own slice of subscription revenue in the future.