Pasquale Romano: Maybe it’s Assure programs, okay. Rex €“ why don’t you take that, Rex?
Rex Jackson: Yes. So just to make sure I am referring to the right thing certainly from a software perspective, which is one of the things we supply that with call service. Attach rates are always 100% out of the gate. And our renewal rates have been very solid and we’ve said on multiple calls that our loss rate there is extremely low. As far as our Assure Warranty program, we put a lot of energy into increasing the attach rates on that over the last couple of years. So they are healthy. They are not 100%, but they are very healthy and they are not trending down, they are trending slightly up, and we would expect that to continue. Big swing on that is, there are some customers who can’t buy it because they want to self-serve and then obviously, we have to work successfully with our extensive channel network to drive short through that, and we’re working on that steadily, but €“ yes, Assure is in a great place. And we haven’t seen any downward trends on either.
Bill Peterson: Okay, thanks for that.
Operator: Thank you. We go next to now to Gabe Daoud at Cowen.
Gabe Daoud: Thanks. Good afternoon, everybody. Thanks for all the prepared remarks. Pasquale, you talked about demand trends and €“ you talked about fleet, particularly in Europe, but I’m just curious if you can maybe talk a little bit about commercial and within commercial, what’s maybe €“ what you’re seeing there? What’s the largest source of demand, I guess, at this point within that channel? And then also just mix it, so I just mix it on a product basis? Like is the €“ should we expect over time that DC will continue to grow, particularly as the NEVI program kicks off? So I know there is a lot in there, but…
Pasquale Romano: Yes, there is a lot to unpack here, Gabe, but we will €“ let’s see if we can take them in order. So the first one regarding hot or cold spots in commercial, I’ll shorthand your question that way. We’re not €“ we’ve been serving literally every type of parking lot and every type of business since €“ for the foreseeable history of the company. And so there is no major hot or cold spots in that. As Rex has mentioned, I think on a few earnings calls, the workplace component, while it’s there and continues to be vibrant is muted a little bit relative to what it would be if people were in the office 5 days a week, 100% of the previous workforce that was in office have returned to office. That’s largely offset by the growth rate of EVs in the installed base of cars.
So we just kind of view that as a delay in workplace. And even relative to the previous answer that I gave to one of the questions today, it stresses why you have to be everywhere drivers go. You lose your network effect if you’re not everywhere and in every parking lot that they may encounter a charger. So we lose our network effect advantage to businesses if we were to see a focus on one sub-vertical versus another, that’s why we don’t do it. But most importantly, when we see unforeseen macro trends that will change traffic patterns and driving patterns, if you’re in every vertical, you’ve been insulated from that. And that’s €“ you’ve seen us despite a lot of supply chain constraints, etcetera, effectively doubling the business. And that is largely due to the fact that we’re a bit insulated from mix shifts due to grant programs, things like that, because as things bubble up in one vertical and maybe bubble down in another, the put offsets the takes and you wind up having a fairly predictable steady and healthy growth rate.
So that packs into the NEVI program. I want to make one comment. We don’t see a mix shift in port count to DC. From an ASP perspective, it’s so much higher on an ASP basis. That’s why you see it outsized from a percent of revenue relative to the port count percentage it represents. So if you look at the active ports under management, which is a reasonable a reasonable view because we do represent a network that is virtually every use case driver might encounter publicly, you’ll see a fairly steady port percentage of DC. Now specifically with NEVI, you may see some pull forward there. You may see some. I’ll remind you that in the inner years €“ because it is a 5-year program, in the inner years, that will be a bigger percentage of the overall DC requirement in the United States.
But in the outer years, that €“ because the amount of grant money per quarter there is constant, but the market will be so much bigger, it will get more diluted. It will still do its job, but it will get more diluted. I’ll also remind you that we’re operating in two geographies, and that phenomenon does not exist in Europe. And then as fleet unwinds, from a vehicle supply perspective, that will start to build. And one of the biggest shortages in vehicle supply on fleet is light commercial fleet and as light commercial fleet starts to come up the chain. That will move around ASPs a bit in the fleet segment. Right now, fleet is very heavily DC-oriented because so much of it is transit and mid-sized trucking, etcetera, so hard to call the fleet impact on this whole thing.
But again, the DC mix is much more of an ASP ratio problem or not a problem, but phenomena than it is a port count shift or a demand shift. And I’ll remind you that regardless of port, there is a recurring software license attached to it.
Gabe Daoud: Yes, got it. Got it. Okay. That’s really helpful. Thanks, Pasquale. Sorry, again, for all the multiple questions and then one. But I’ll just quickly follow-up with one last one on the supply chain front. Could you just talk about the €“ what some of the component shortages are at this point? I know last year it was maybe more of a whack a mole. Maybe this year, it’s just more of a chip issue. And so just any color on that? And then if you look into your crystal ball, like when do you think this all kind of eases? Thanks, guys.
