Q1 2021 Blink Charging Co Earnings Call
[music].
Good day, everyone and welcome to the <unk> charging company first quarter 2021 earnings call. At this time all participants are in a listen only mode. Later, you will have the opportunity to ask questions. During the question and answer session. You May Register to ask the question.
At any time of pressing the star and one on you touched on the calls I will be standing by should you need any assistance. It is now my pleasure to turn today's program over to John Nesbitt M. S. Investor Relations. Please go ahead.
Good afternoon, everyone and welcome to Blink charging as first quarter 2021, investor call on the call today of Michael Farkas, founder and Chief Executive Officer, Brendan Jones, President and Michael Rama Chief Financial Officer, I would like to take a moment to read the safe Harbor statement. This.
This conference call contains forward looking statements as defined within the C C.
Section 27 day, a of the Securities Act of 1933 as amended and section 21 E of the Securities Exchange Act of 19th 34 as amended these forward looking statements in terms such as anticipate expect intend may will should or other comparable terms involve risks and uncertainties because they relate to events and depend.
Circumstances that will occur in the future. Those statements include statements regarding the intent belief or current expectations of Blink and members of its management as well as the assumptions on which such statements are best prospective investors are cautioned that any such forward looking statements are not guarantees of future performance and involve risks and uncertainties, including those described in blinks periodic report.
<unk> filed with the FCC and the actual results may differ materially from those contemplated by such forward looking statements, except as required by federal Securities Law, Blink undertakes no obligation to update or revise forward looking statements to reflect changed conditions I will now turn the call over to Michael Farkas, CEO, Brendan Jones President and.
Brendan Jones President of Blink charging go ahead Michael.
Good afternoon, everyone. Thank you for joining us.
We had a solid start to 2021 first quarter revenue grew 72 per cent compared to the first quarter of 2020 and.
And we continued to aggressively expand the of June geographic footprint of our Chargers.
During the quarter, we made tremendous progress with 1500, and 97 commercial and residential Chargers contracted shoulder deployed and the number of Blink on charging stations contracted deployed grew more than 370 per cent compared to the same period in 2020.
Our target locations are high density high volume venues like hotels multifamily residential and health care networks. We're also working with the broad range of countries states and municipalities to strengthen E. The infrastructure is more individual drivers as well as fleets transition to greener trans.
Rotation.
E. The use is gaining traction worldwide and in the U S. The transition has been aided by favorable legislation initiatives and the binding administration in fact as many of you know in early April the Whitehouse published the infrastructure plan with the amongst other initiatives proposes a 100 instead of before.
A billion dollar of investment for the electrification of cars and trucks and also proposes to establish the grants and incentive programs to build a national network of 500000 EV charging stations.
With these efforts to get more evs on the road, it's logical that demand will increase for fast accessible and reliable charging stations to few of these vehicles.
Well. He these are currently a relatively small portion of the vehicle market. The represent a rapidly growing segment of the transportation sector.
As a leader in the industry, we are well positioned to play a key role in the infrastructure build out.
Necessary to support the anticipated growth and easy transportation and we are already actively pursuing opportunities at the local state and federal levels of the government.
It's important to remember that we are a pioneer in the EV charging space with the great deal of the experience in deploying charging stations in locations that are accessible and convenient while also providing the technology that ensures a fast charge.
We are focused on our operator older model, where we enter into long time long term exclusive contracts with automatic extensions that employ a revenue sharing model in which we received payment each and every time is vehicle is charged at one of our blink owned locations with the structure, we have the potential to <unk>.
Generate a valuable of recurring revenue stream for many years to come I E. The utilization increases.
Our property owner partners also benefit from this model because we take care of the installation and maintenance of Blink on the units, which is often an attractive option for property management companies, who have a lot of other responsibilities on the plate.
Additionally, in our own and operate approach, we have exclusive long term contracts, which allow us to deploy charging stations today, but most importantly, the edge Chargers to these contracted locations as necessary to meet demand.
And that is true long term again, very long term and exclusive contracts.
This is a very exciting time to be a leader in the EV charging industry.
Even before the recent announcements from the White House, we believed and continue to believe that the transition to evs represent an opportunity with tremendous potential for our company's growth.
As we've noted in previous calls, but think of is important to point out again, and again bloomberg's any S electric vehicle outlook, which looks at the global EV market noted that passenger EV sales increased from 450000 in 2015 to two point the $1 million in 2019 and of.
Are expected to reach over 15 million by 'twenty 40.
Bloomberg in the US also expects that more than 50% of new car sales globally will be evs by 2040 and projects that the need for charging stations will top 290 million by 2040 again.
290 million charging stations needed globally, we're not even in the beginning of the first inning as the.
The other deployments that are necessary and by the way that has the value of over $500 billion worldwide.
The shift to Evs is happening and Blink is poised for significant growth as we play a key role providing the infrastructure to support this transition.
To support our growth in January of 2021 we completed a successful equity raise of $232 million significantly strengthening our balance sheet with the stronger capital structure, we are better positioned to expand the blink on charging infrastructure.
<unk> internal systems operations and technology assets.
To prepare for anticipated exponential growth of securing new partnerships acquiring new locations and continuing to seek strategic acquisition opportunities.
As a key contributor to the expanding EV landscape, we are continuously looking for opportunities to strategically increase our global assets, while also making EV charging more accessible.
As such we are very excited about this week's announced acquisition of European EV charging operator blue corner.
And its portfolio of 7071 charging ports.
Giving blink operational control complete operational control of a blink corner and the EV charging assets.
The acquisition is part of a broader strategic international expansion plans and provides a significant infrastructure input from.
In Europe.
Blue corner charges are located across the Belgium, Luxembourg, the Netherlands and France.
He is enjoying much harder I'm quite of market share in Europe. It is heightening the potential for the increased utilization for our EV charging stations. In addition, the historically higher price of fuel in Europe makes of driving EV in much about the stronger value proposition for drivers there.
To facilitate our further expansion in Europe. We've also created Blink holdings, a new company headquarters in Amsterdam, and we're excited to immediately establish a significant presence in Europe.
Pointing the international expansion that is fundamental to our growth and we believe this acquisition will accelerate the success, we are already achieving in Europe.
Finally, we are excited by the opportunities we are seeing in the marketplace and during the first quarter, we strengthened our capabilities for capitalizing on these opportunities by strategically, adding new positions and people to improve our operational strength across the organization, perhaps most notably we added our new CTO harsh winter.
Body.
He is the founder of charge points, one of our biggest competitors and he's a season of renewable and EV charging executives will focus on the aggressive development of the company's product lineup, the technology infrastructure, and just bringing everything within our portfolio of up to the next level. Additionally, we made 17 new.
Hires across the organization, including the technology sales I T and customer service departments. We are also expanding our facilities in advance of anticipated growth and at the start of the quarter, We announced the purchase of a 10000 square foot office in Miami, the How's the corporate headquarters and the support our current and future.
Roads.
Also at the beginning of the first quarter, we opened the new Phoenix location, which has already begun making meaningful contributions to our operations.
Blink is off to a strong start.
And solidly positioned to drive growth.
And as we move through the balance of the 2021, we have the amazing and exciting things ahead of US and this is a very exciting insurance formative time for Blink and we're extremely optimistic about our future and our role in the growth of worldwide EV infrastructure infrastructure EV charging infrastructure.
Now I'll turn the call over to Brendan Jones, President of the Blake to discuss some of our recent developments go ahead Brendan.
Thanks, Michael and good afternoon, everyone. It is the pleasure.
To speak with you did today.
We have been very busy here of blank as evidenced by many of the recent.
Deployments and developments within the company I would like to review some of the highlights to begin with our latest news are we're very pleased.
Two of acquired Blue corner and its portfolio of more than 7000 charging points. This acquisition provides us a solid foothold to access the European market.
You're penetrated market that has the potential to be a growth area for blink as the transition to Evs continues to progress.
Some additional context, the European E. The market is growing faster than the United States sales of plug in electric vehicles in Europe rose, 137% to 1.4 million vehicles last year, whereas the U S rose 4% to 328000 these numbers.
According to E V volume Dot com the surge in EV adoption will increase demand for EV charging infrastructure.
The infrastructure. In addition, European regulations are further accelerating widespread EV adoption with regulatory reform that supports zero emissions vehicles now we have a lot of focus domestically, we are effectively leveraging evening of infrastructure grants and incentives.
And the programs across the country with some of the recent deployments, including the deployment of 42 charging ports at 10, four brothers Pizza Inn locations across New York, which was made possible through the charge ready program from the New York State Energy research and the depth a development.
The otherwise known as nice Serta and make ready incentives by New York Utilities. Additionally, we upgraded 19th first generation Blink EV charging stations and Plano.
Texas to the company's IQ200 fast level, two charging stations in support of the city's commitment to electrify their transportation infrastructure.
The deployment of Blink ICU trying to charging stations at Native American youth and family centers in Portland, Oregon, which was made possible with funding from the Portland General Electric drive charged funds through the.
Oregon clean fuels program and in the electric mobility Grant from Pacific Power, Oregon Electric also there was in the center of Oregon Clean fuels program. We also recently added some valuable partnerships, which include but not limited to an agreement with general Motors to offer G. M E V Cup customers.
More seamless access to publicly available blank charging station sites across the U S. As part of Gms, the ultimate charge 360 program.
We also signed the reseller agreement with E V transportation services, otherwise known as E. T. S. Do distribute Blink IQ200, Emma portable EV charger, along with its Firefly E. S. P. A central service vehicle, we used them engaged in the sponsorship also with the University of Cincinnati.
All of these bare cat electric vehicle racing team.
This is the university's force all electric Formula of race team and we're really excited about that we continue to make progress and internationally through agreements such as the first installation of a blink IQ100 charger by the municipality of Pedro of buyers third day and in Santiago Chile.
The to support the municipalities New fleet of Nissan leaf vehicles.
And in addition to that we signed an agreement to deploy Blink EV charging stations at the Atoll Hotel group locations in Israel for some contacts for Tau is one of the Israel, leading hotel companies with luxury hotels in 14 major tourist locations.
As Michael mentioned, we have made a lot of structural improvements to strengthen the company and capitalize on the interest and opportunities. We're seeing in the marketplace. These improvements include expanding and improving our sales team our service operations team our product development team. We're also.
We are now very well positioned to support the anticipated growth ahead of us.
Like to now turn this over to our CFO, Michael Rama to run through some of the specifics results for the quarter.
Thank you Brendan and good afternoon, everyone. We are off to a solid start in 2021 with total revenue growth of 72% to $2 $2 million in the first quarter of 2021 as compared to the first quarter of 2020.
This growth was driven by increased product sales as well as increased network fees product revenues grew by over 113% in the first quarter of 2021 as compared to the same period of 2020.
Related to the robust demand for our commercial and residential Chargers network fees grew 100% as compared to the first quarter of 2020 related to the increase in charges within our network. The growth in these two areas of our business was offset slightly by a decrease in revenues from charging services for the quarter.
Despite the continued reopening of the economy travel in general is still a bit constrained as the economic.
As certain pandemic related restrictions remain in place, which impacts you'd be traveling.
First quarter 2021, net loss was $7 $4 million or <unk> 18 per share compared to net loss of $3 million or 11 cents per share in the first quarter of 2020.
For the first quarter of 2021 net loss included increases in compensation and operating expenses related to the onboarding of new employees, primarily in our sales.
And from customer service areas.
Specifically operating expenses for the first quarter of 2021 increased to $7 $5 million from $3 $3 million, primarily driven by significant scaling of our infrastructure and operations as we continue to scale the business to prepare for the anticipated demand for our products and services as E.
The used growth.
Also.
Moving to the increase in operating expense expenses for the first quarter of 2021 compared to the first quarter of 2020, where operating expenses associated with the acquisitions of blue of late and Hugo stations during the second half of 2020.
As of March 31, 2021 we sold or deploy 17302 Chargers of which 7191, where on the Blink network, which consisted of 4471 level to publicly accessible commercial chargers.
1441 level to private commercial Chargers 121, DC fast charging publicly accessible Chargers 11, DC fast charging private Chargers and 1147 residential level to Blink EV Chargers the remaining.
Our non networks on the other networks or international sales or the or deployments, which consist of 225 of the level two commercial Chargers six DC fast charging Chargers 9218 residential level to Blink Chargers at 607 sold internationally and 55.
The point internationally.
And now a few comments about our liquidity and cash at March 31, 2021 of cash and marketable marketable securities were $232 $2 million compared to $22.3 million of December 31, 2020 during the first quarter of 2021 we completed since the.
First of all equity raise of $232 million now I'll turn the call back over to Michael <unk> for some additional remarks and after that we'll open it up for Q&A.
Michael.
2021 has it really been a busy year, we are energized and prepared to capitalize on the opportunities we're seeing to grow our role as a key contributor to the establishment of expansion of worldwide EV infrastructure.
This is an exciting time for our company and our industry and we look forward to driving continued growth and progress with that we will now open the call for questions.
At this time, if you would like to ask a question. Please press the star and one on you touched on the phone you may remove yourself from the queue at any time by pressing the pounds. Once again that the star and wanted to ask a question, we will pause for a moment to allow.
The Q.
Okay.
Yeah.
Yeah.
Yes.
Yeah.
We will take our first from Gabe Daoud with Cowen. Please go ahead. Your line is open.
Thanks, Good afternoon guys.
Can we maybe maybe just start with the blue corner acquisition.
Of expanding the footprint in Europe, a pretty attractive price could you maybe give us a little bit of background on maybe the process and just maybe any color around what the business does from a revenue standpoint.
And you know any of any perspective, I guess on why blue corner would be it would be interesting of that we'd be interested in selling Ah yeah. It's instead of selling at this point of the cycle.
Okay. This is Michael Farkas.
I'll take the beginning of that and then I'll, let let the bin and follow up.
Blue corner and the reason why did the the community is extremely attractive for us just because of the their base in Europe.
Not only that the old network they have their own the hardware all the outsource.
<unk> production.
They have an amazing base of customers throughout Europe, and they're constantly grilling.
The us it was an amazing opportunity to be able to integrate and bring cardboard Blink network ultimately and use it the springboard or a major portion of advance into Europe Brendan.
Brendan would you like the follow up of that.
Yeah, I think we you know we went through a fairly exhaustive search for opportunities that were based.
In Europe, we look primarily on the continent as well as the island in England as well Blue.
Blue corner of popped up as a company that had a great deal of similarities to Blink.
We have the similar model, we both own and operate Chargers, they sell chargers, they both they own and operate their own network and they maintain their own chargers and they have manufacturing agreements per customer manufacturing as well.
And they have a good footprint in four countries with the ability to expand to other countries throughout Europe. So when we examine this then the cost of acquisition. We saw this as a unique opportunity to really energize and rapidly expand our presence in Europe and keep in mind. We're also prepping your of relationships in Greece.
Where we've already made several announcements with our partners over there and this further looks at blank and says we are going to be in and of the national presence. We're now active in Europe in Greece, and the four countries. We just outlined in South America, and the Dominican Republic and other <unk>.
Trees in cotton that's to come.
Yes.
Thanks, guys that's helpful.
One of the thing I like the answer to that.
The value proposition.
For someone having to pay for fuel.
The versus America is so much greater in favor of electric vehicles.
And they're just more environmentally conscious today than the American market as well.
And this really allows us to participate in the really one of the most active E. The markets in the World you have countries within the EU, where you've seen double digit EV sales today, even more than half the market of disease of wind.
Now going to be able to enter the marketplace directly we believe impact utilization is tremendously and people will get an understanding where the worldwide portfolio of charging stations really you can imagine.
Thanks, that's helpful and thanks Brendan.
And so those 7000 or so parts of those all all owned and operated by by Blue corner of.
Was there a split on that and those are all levels the right assume right.
These are all of our level two charging it has a very similar makeup of our units. Some are privately owned where they were purchased.
But the greater the majority of them are public Chargers.
That are accessible to the public and the owned and operated by Blue corner.
Gotcha Gotcha, Okay. Thanks, Brendan and then.
A follow up for me I know it was part of the the Blue L. A acquisition you picked up some ride sharing cars, which I guess now is kind of showed in the financial separately is there.
How should we think about that line item of moving forward. It was looks like a pretty decent drag on gross margin of <unk> just like the do you plan on keeping that over time, just just what happens with that segment over time.
While our plan.
It really is to be able to provide charging infrastructure in this in the streets globally.
The opportunity arose to buy the program, which gave us car sharing of you'd be sharing.
As well as infrastructure.
And in the Los Angeles market and it's our plan to operate the cars run one of the program.
But there are also opportunities globally, where we would bring in a local partner who may own and operate the cars through our systems.
So we're looking at each market individually our focus is really on.
On the EV charging market.
But the opportunity you know it really allowed us to be able to.
Prototype the service, which would include EV charging EV.
E V zone, the mood for ridesharing and car sharing.
Advertising and also having some communication.
The services as well so the L. A market with something that we could use to prove the service and products other than to be able to roll it out globally, but our focus is not.
Generally on owning the cars.
Got it thanks, Michael and then just finally on the.
You mentioned advertising and you know you had talked about potential media towers is there any timeline that you could talk to where you'd be rolling out something like that is it at some point this year or is that like of 'twenty 'twenty two type of new product just any of any thoughts around that.
We're hopeful to have something are you know in the streets this year.
Got it thanks guys.
You're welcome.
Okay.
We will take our next question from the ground <unk> with Needham <unk> company.
Please go ahead your line is open.
Good evening, everyone cluster of couple of quick ones for me I saw that there was a small decline in charging services revenue and I was wondering if there is a way to quantify the impact of the pandemic on the these are this revenue stream.
You want to take the utilization pre pandemic and apply to your longevity of bigger asset base right now or how should we think about growth going forward. Instead of way you can quantify how the pandemic has impacted impacting this line item.
Yeah, I'll add to that you know this is Michael Rama Yeah, you know the.
First quarter. We saw you know obviously was the decline quarter over quarter on the charging station because of the pandemic, but we continue to see of seen an increase quarter over quarter since.
Q2 of.
Of an increase going from Q2 of 2020 are going forward on the on the charging station revenues Utilizations are continuing to the increase.
We are of different mix of product now in our portfolio. So what's.
What's the producing at a higher rate, we're starting to really start monetizing I'm looking at data coming in every day and every day the the charging wherever it is continuously inquiry. So we're very optimistic that.
Charging revenues are increasing and we.
We're starting to see through the pandemic and the increase in utilization.
Thanks, Michael.
The second question I had was you.
Mentioned that there were certain one time items in the other operating expenses I heard a new hires after the offices Miami and Phoenix, how should we think about the call and finished the year NAND I was wondering if you can quantify the impact of acquisition related expenses and if there were any one time ear and incentives.
Into the numbers in the first quarter, how should we think about opex going forward.
Cash.
You know, obviously, we continuously the highest some.
Related to the the book Warner will have some.
Acquisition related expenses.
The new hires or are part of our sales are part of our strategy strengthening the I T strengthening sales strengthening all of the different core.
Scalable areas too.
Just to support the growth and anticipated growth so.
Obviously salaries are are continuing.
But you know.
One time expenses related to acquisitions, obviously, we had some acquisition related in L, a and as well as the acquisitions from 2020.
But obviously the bigger one time.
You will see that coming through more so than in the second quarter with the closing of the.
The corner.
Thank you and just the last one from me could you talk about the M&A landscape in Europe.
One of the markets, where instead of just the Netherlands, you have the lowest D V. D. E V. S E ratios of about three so it seems like it's a pretty fragmented market. There are abundant opportunities for you to vote.
Expand organically and get to the EV sales expand through.
Through M&A.
Could you talk about how many of how many how many opportunities you're seeing are you are you looking to expand through M&A rapidly in other countries could you just talk about the M&A landscape in Europe.
Yes.
We see some extremely exciting things out there and you were correct.
Extremely fat fragmented.
You have a lot of mom and Pops that one you know of charging station in their in their locations.
And we see the ability of us being able to consolidate the markets not only in the U S. The globally member Blink is the consolidation of about 10 companies today.
We were built on acquisitions I think we're better equipped than any of our competitors throughout the rent start buying up our competitors. We've done this before the integrated these companies we have tremendous experience in doing so.
There are a lot of opportunities in Europe, one of the biggest things that that was made of two compelling for us is how fragmented the industry is while there's a lot of infrastructure out there, but not nearly enough infrastructure, that's going to be required in the future. She may have the location with the unit or two and then they get a little bit more complicated and expensive for some of these property owners of start deploying in those locations.
<unk>.
That's where the blink of model.
Really going to be very helpful from Europe in Europe, which is not very prevalent.
Owning and operating the charging stations throughout the continent, and we believe it's going to be.
We're going to of a lot of opportunities on the M&A front.
We just started basically.
Understood. Thank you very much that's all I had.
Yeah.
We will take our next question from Noel Parks with Tuohy Brothers. Your line is open. Please go ahead.
Good afternoon.
Hello.
Just a couple of things.
Going back to Oh.
The blue corner of acquisition.
We're just talking about greater greater penetration in the.
The greater.
The perception of value of Evs in Europe can you can you give sort of a ballpark sense of what that means for sort of the payback on incremental investment for units you in time would be deploying in Europe versus in the U S where you know the.
The penetration and the utilization.
The utilization is.
Flow or just kind of a comparison of of you know.
What makes.
More of a more attractive.
Wanted by that at all.
Okay. There there are lot of factors number one of the cost of our equipment is much lower in Europe that lives in the U S.
The per port cost is less than half.
We're also looking at each and every one of those ports on an H T side of that.
Or twice as fast as what we have in the U S.
So the half the cost of the hardware, we can make twice as much of the money in that same period of time.
That in its own right just the again the value proposition is off the charts from us when we're looking at it U S versus Europe.
Again in utilization is key.
So if we're talking about on a hybrid model at a 10% straight line utilization.
Getting paid back on a per port basis.
Less than a year, you could see that in less than half the time.
Again, the installation costs. The you know still of arent cheap, but it's still even cheaper when you're dealing with three CS.
The installations versus what we do here in the U S. So the installations of cheaper the hardware is cheaper than the hardware is actually faster.
So when you add all of that together the.
And the amount of these that are on the road is much greater there than here.
We believe that it'll be a very very significant boost to our business in very short order.
Great Thanks and.
My My second one is with your your new Chief Technology Officer coming on board.
Very much of an industry veteran a key.
Can you just give a sense of maybe what the the.
Sort of most important or most urgent initiatives might be sort of tactical things.
For the near term that would be honest play and also if theres any sense of and I know you probably haven't had a lot of time to to think of his teeth into it but what some of the more strategic.
The.
The changes or needs might be going forward.
Okay, I'm, just going to point out a couple and then Brendan of a follow up but.
One of the key things, obviously, we're internationalizing the entire company so internationalizing the network.
Across the board you could have one mobile application that can operate all of our charging stations globally.
And having a multi currency multi language that's something that we're launching in short order and that's something that I think theres going to be focused on getting.
Getting through the process.
Our agenda will touch every single corner of this company.
He is as you know.
The seasoned I was fortunate enough to work with him on for quite some time, while he was at charge point. Most people don't know this but our largest our vendor of means end of at the time was charge point, then we interacted with with the margins are quite often and were.
We're very excited on seeing the things that.
He's going to bring to the table and Brendan can be a bit more specific.
Yeah. So thanks, Michael and all of all I'll be brief because Michael hit the highlights there, but if you look at the.
The changing needs of networks in today's world versus what they were you know save five years ago.
More feature sets.
The more integration of the vehicles will be of 15 of 11 eight standard the <unk>.
Doug and charge the standards.
The request from both site hosts on reservation systems.
More integration so with the utilities on demand response and other.
Models and generally just more feature sets in general and that's just on the software side than on the product side, you know everything keeps reinventing aside south. So we made the decision you know we were happy on the pathway are in but what we really wanted to blink is the accelerated growth to take.
What was going on to the today and then prepare for the future and that's why we brought him on so as Michael alluded to if you think of all of the product and technological underpinnings of the leading edge EV infrastructure company needs to do to keep up and surpassed the competition that is why we brought her agenda on and that is this.
Mission statement.
And we've already laid that out and I'm happy to report we're already beginning the work.
Okay.
Terrific. Thanks, a lot.
Yeah.
Yeah.
Okay.
It appears we have no further questions at this time I will now turn the program back over to management for any additional or closing remarks.
Thank you everyone for joining us. This is an exciting time for our company and we remain focused on expanding our footprint growing our customer base and the.
Stablish of new partnerships, we look forward to speaking with you again next quarter.
This does conclude today's program. Thank you for your participation you may disconnect.
Uh huh.
Okay.
Okay.
Uh huh.
Uh huh.
[music].
Yeah.
[music].
Yeah.
Okay.
[music].
Yeah.
[music].
Yes.
[music].