Q2 2022 Blink Charging Co Earnings Call

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Good afternoon and welcome to Blink Charging's second quarter 2022 earnings conference call.

All participants are in this and only mode, and there will be an opportunity for analysts to ask questions at the end of today's presentation.

If you should need assistance during the conference.

Please press star zero on your touchtone phone.

Please note, this conference is being recorded. A replay of this call will be available on the Investor Relations page of the company's website. At this time, I'd like to turn the presentation over to Vitaly Stalia, Vice President of Investor Relations.

Thank you all.

Welcome to Blink's second quarter 2022 on Irons call.

On the call today, we have Michael Farcas, Chairman and Chief Executive Officer, Brandon Jones, President, and Michael Rahma, Chief Executive Officer Officer.

Today's discussions will include non-GAF references.

These are reconciled to the most comparable US GAAP measures in the appendix of our earnings deck.

You can find the depth along with the rest of our burning materials, another important concept.

on Blinks Investor Relations website.

Please note, today's discussions may also include forward-looking statements about our expectations.

Actual results may defer from those stated, the most significant factors that could cause actual results to defer, I included on page two of the second quarter earnings debt.

I'll let other white noted, all comparisons are year over year.

And now regarding our patients' calendar, we have two upcoming engagements.

On August 10th,

Michael Tarkas, B

We'll present at the J.P. Morgan Auto Conference in New York.

And on September 7th, Blank will participate in the Barclays CEO Energy Power Conference also in New York City. And on September 7th, Blank will participate in the Barclays CEO Energy Power Conference

And now I will turn the call over to Michael Farcus, founder and CEO of Blink Charging. Go ahead Michael.

After everyone, thank you for joining us.

We delivered a very strong second quarter of 2022 highlighted by a record revenue of 11 and a half million dollars.

an increase of over 664% over the second quarter of 2021. It is very important to note here that from an organic growth perspective, excluding 2022 acquisitions.

Our second quarter of the new doubled year over your basis.

which proves that we have a solid strategy and robust growth on both our owner operator side and the Ancillary Sales Models.

During the second quarter, our product sales grew by 170%.

Service revenue grew by 155%.

recurring network fees grew by nearly 350%.

Our record second quarter results are reflective of our strong fundamentals as these results do not yet fully reflect

The integration of our recent acquisitions of Sima Connect and EB Charging.

In fact, our second quarter results include only half of a month of Sema's financials since this transaction closed on June 15.

Going forward, the recent acquisitions will only accelerate our momentum in sales, network expansion, and product development.

In the quarter, we contracted, sold, or deployed 5,630

Commercial and residential charters.

An increase of 73 per

Same quarter last year.

During the same period, Blink was awarded an additional $2 million from various companies

$32 million since the beginning of 2021.

In addition, we are extremely encouraged by yesterday's passage of the Inflation Reduction Act in the Senate.

We believe that the axe provisions for consumer incentives for both new and used electric vehicles, conversion of government fleets to EVs, and its favorable tax and cap-ex implications will contribute to a faster transition to electric transportation resulting in higher demand for EV charging infrastructure.

This aligns well with Blink's strategy and our future growth plans.

On slide five.

is the most important highlight of this quarter, which is Blink's acquisition of SemConnect.

The combination of Blink and SEMA creates a powerhouse of the charging industry, making over 12,800 active chargers and 151,000 registered users to Blink's portfolio of chargers.

And as importantly, this acquisition provides Blink with vertically integrated manufacturing capabilities in the US, which instantly qualifies Blink for the Buy America mandate within the Biden administration's $7.5 billion EV charging investment plan.

CEMA's large portfolio of technology and intellectual property includes level 3 DC fast chargers which significantly accelerates BLINK's go-to-market strategy in the fast charging DC space.

and financially?

Sema has one of the highest, if not the highest, margin profiles in the industry with a strong recurring sales and cash flow model and multiple revenue streams.

We are very pleased with this acquisition and look forward to continuing the integration of Sema into the Blink family. Mahi Reddy, founder and chief executive officer of Sema Connect, joined the Blink board of directors recently, a great addition which will positively impact the integration process.

On page six, you can see that Semiconnet acquisition was preceded by two other very important transactions.

In April of 2022, we closed the EV charging acquisition in the UK, giving us access to the UK and Ireland markets and adding nearly 1,200 chargers to Blink's global footprint.

As a part of that transaction, it acquired a confirmed order book of about $16 million, which is being fulfilled as we speak.

Prior to that, in May 2021, we acquired Blue Corner in continental Europe , establishing an initial presence there, with plans to grow significantly in the fast-growing European market.

This includes countries such as Belgium, Netherlands, France, among many others.

Our strategy is paying off as demonstrated by the recently announced agreements with QPAR to deploy nearly 600 chargers across 80 sites in the UK and Ireland.

Q Park is one of the three largest providers of parking facilities in Western Europe . So we're extremely excited about this new partnership.

BLING's strategic and organic growth has contributed to our fast global expansion.

As you can see on slide 7, our network is already established on three continents and key markets within each, and we're looking to spin further from here.

We think that there is significant opportunity ahead for Blink because of our equipment, our new and updated, soon to be revealed software, and our network are compatible with the charting infrastructure in most places on the globe.

combined with strong projected growth rates and EV penetration and EV infrastructure needs.

We think Blink is very well positioned for substantial organic and strategic growth.

In fact, a recent study from McKinsey published in April of this year

argues that the United States alone could have 48 million EVs on the road by 2030. Forty-eight million.

And globally, Bloomberg New Energy Finance recently pointed to the need of between...

340 million to 450 million chargers by 2040. I'm going to repeat that.

340 million to 490 million chargers.

It's massive. And interestingly, when you think about it, only 3% of those are projected to be superchargers.

Blink is positioned to take advantage of this incredible growth environment due to our strong value proposition.

As you can see on page 8, we believe Blink has the most advanced technology in the market right now, with strong intellectual property and vertical integration capabilities globally. We offer multiple business models to our customers, and we ask them to choose how they want to deploy their capital.

anywhere from full ownership

to no capital requirement and minimal involvement.

And we have an extremely large footprint that we believe will only keep growing at a very, very accelerated pace.

9. Another thing that I'm tremendously excited about is Blink's new global framework, which we believe is a game changer in the EV charging industry.

Besides having manufacturing capabilities in the US, India, and Taiwan, our international network and portfolio of equipment is on power roll today.

anywhere from New York to Brussels, Tel Aviv, London, even to Guam, who can use the same network.

branded charges in six languages, 19 currencies across 21 countries.

And we're only getting started. We have a lot of other countries and many more features to follow.

In action.

Whether we own and operate or sell the hardware, Bling strives to deliver best-in-class products and services globally.

This is what enables a faster transition to EVs and what helps our customers and site hosts.

to make the switch to EVs and to blink.

With that, I'll turn the call over to Brendan Jones, President of Blink, to discuss some of our recent developments.

Thanks, Michael, and good afternoon to everyone.

As Michael talked about, it has been a very important and exciting quarter for BLINK.

We're going to begin with slide 11 and not only in

the last quarter did we have strong financial performance driven by solid fundamentals.

But we also accomplished the acquisitions of EV charging and semi-connect.

If you look just at EB charging in the UK, it has a unique business model for the owner-operator side of the business where typically in the UK we are able to get 80% of the capex covered by government entities.

This is particularly attractive to us, especially since the UK government recently increased its commitment for the number of chargers by tenfold to 300,000 by the end of the decade.

Alongside of this, the government is committed to 1.6 billion pounds to increase public EV infrastructure.

The acquisition of EV charging will allow Blink to tap into the opportunities for growth and increase its footprint across Europe by leveraging synergies with Blue Corner or other European entities in continental Europe .

Now, adding to that synergy, the semi-connect acquisition brings blank unmatched speed to market, reduced costs, service.

lower expenses, revenue growth, and flexibility.

It is another step towards our vision of creating the leading global electric vehicle charging ecosystem. A X Y X PIE to the News methyl from the attracted additional to.

It added thousands of chargers and registered users to the Blink portfolio, while further enhancing our comprehensive suite of smart hardware and software solutions for both retail and commercial applications.

And we cannot say enough about the talented individuals at Semiconnect and the industry knowledge they bring to blank. We have essentially doubled our headcount through this acquisition.

If we transition now look at slide 12.

As the world continues to struggle with broken supply chains and chip shortages...

Semi-Connect vertical integration is key to achieving end-to-end design in in-house manufacturing. It will allow us to control the timeline for delivery of products that will satisfy multiple customer demands.

And these will effectively contribute to better cost.

management and industry leading margins.

We also believe that the in-house manufacturing...

capacity will be key to leading increased demand. In the United States in particular, Semiconnect manufacturing facility in Bowie, Maryland allows us to become Buy America compliant.

while we get to control the IP and the quality, as well as the future ramp up in capacity.

The same also applies to our manufacturing facility in India.

As we combine our complementary in-house engineering and software capabilities, we will be looking to leverage economies of scale across the board. As a matter of fact, we are already doing it. Our sales teams have started working hand in hand and addressing opportunities as one ourselves as a team.

complementing each other's lead generation and product offering.

If we flip now to slide 13.

When it comes to synergies on the revenue side, our plan includes upgrading existing semi-connect customers to new level two Blink chargers and transitioning them to the new Blink network. kernel architecture.

The hardware and accessories we revealed at CES this year have received great reviews from our existing customers.

As a result, we are also looking to increase the number of chargers at high utilization of semiconductor sites, thus increasing hardware revenue each incremental charger sold.

As we evaluate each site and our relationship with those new owners, we plan on providing SemaConnect customers with the option to switch to the hybrid revenue model, thus increasing the LTV per charger by about 10 to 15 times.

We believe this will be a win-win situation, especially with customers who are looking to ease the cost of owning and operating a charging site.

And besides revenue synergies, we believe we have multiple opportunities on the cost side in both cost optimization, revenue, expense avoidance, and cost reduction.

When it comes to hardware, we'll be leveraging semi-connects, low-cost manufacturing capabilities with a targeted cost reduction per unit of approximately 30%. I will say that again, 30% cost reduction. This is significant. This is a decrease from our current cost.

Regarding talent, we are very excited to welcome SemiConnect employees to the Blink family and scale these talented team members across the entire organization. More than a quarter of SemiConnect's employees are highly skilled engineers with complementary skill sets to what we have today.

And last but definitely not least, we plan to optimize our sales and customer service efforts to leverage scale and deliver the best quality of service and sales experience in the EV industry today.

If we transition to slide 14 now.

Within the last one month, Blink has contracted, sold, deployed, or acquired over 5,631 chargers, both domestically and internationally.

bringing the total charge account for the company to over 51,000.

since Blink's inception, which also includes the Semiconnect charges.

We have a healthy mix of deployments in the United States and abroad, with 74% of the total company-wide blink chargers deployed in North America and 26% deployed internationally.

Consumer demand for electric vehicles is steadily increasing, and the forecast from reputable thought leaders looks very optimistic as Michael outlined earlier.

When it comes to growth in charging infrastructure, our global network of chargers has steadily expanded quarter over quarter and we expect this to continue well into the future.

On slide 15, as you can see from the logos and verticals, this is a very comprehensive list and speaks to the breadth and depth of our products and services.

We've won numerous multi-year contracts with a variety of well-respected commercial enterprises, healthcare facilities, multi-family complexes, planned communities, and municipalities.

Semi Connect's equally comprehensive portfolio significantly complements Blinks. In fact, we are seeing tremendous opportunities to grow our customer base in the near future.

Now, if we move over to slide 16...

This gives us an overview of our stations deployed in key geographic locations throughout the United States and Europe . As you can see with the semi-connect acquisition, our customer base has expanded significantly to over 423,000 drivers registered within our portfolio of charges.

We have offices in nine locations across five countries serving customers in more than 21 countries.

Internationally, we are building the momentum achieved by Blue Corner and combined with our recent acquisition of EB Charging.

On slide 17, just to remind everyone.

We have launched and will be launching several exciting projects.

and we'll be launching several exciting projects.

in 2022, including Blink's advanced sleep management software and the accompanying mobile design to be used with the advanced MQ200 hardware.

MQ200 was launched this past quarter and the initial feedback is very positive. The combination of hardware and software will provide a 360-degree fleet ecosystem.

Moreover, we are preparing for the launch of an entirely redesigned Blink mobile app.

and cloud applications, which is based on the latest tech stack and will make EV charging even more easier for drivers and operators.

We are excited about the innovative Vision Charger designed for the retail location, which has now been completely redesigned as can be seen on slide 17.

In addition to that, the HQ200 is a residential charger which is fully networked and will allow customers to stay within the blink network even in their home.

And also as important, the newly added Series 8 family of chargers, which allows customers to use their credit card to pay for service, which is in fact a requirement effective January 1, 2023 for retail and public locations in California.

Overall, we have a comprehensive portfolio of charging solutions to fit the needs of any customer, public or private.

with the capability to penetrate numerous different markets.

If we now go to slide 18, this provides an overview of the historic 1.2.

trillion federal infrastructure bill that includes an estimated 7.5 billion

to be used for building the nationwide infrastructure to support the anticipated growth in the adoption of electric vehicles.

Since January 2021, BLINK has been awarded $32 million in grants from several different state organizations.

We now have a tremendous opportunity to add to this number by capturing as much as possible of the $17.5 billion and aid in the expansion of our charging footprint.

If we now flip to slide 19, this shows some of our big wins.

Our business development teams from Blink, Semiconnect, BlueCorner, and EB are working together to develop and close deals across a large spectrum of customers.

anywhere from established auto OEMs and suppliers, to large real estate developments and management firms, to local government fleets, to retail and entertainment companies, among many others.

On the government side, two recent examples of purchasing agreements with two governmental organizations are Region 1 Planning Council in Northern Illinois and Florida Sheriff's Association Cooperative Purchasing Program.

The Northern Illinois Council of Government helps local governments and agencies save time and money by leveraging the buying power of its 20 plus members within six county jurisdictions.

The contract for EV charging equipment

services for up to 10 years will enable members of R1's Council of Governments to...

participates under any of BLINK's deployment models with favorable negotiated terms as awarded. The initial plan estimates up to 700 charging stations to be installed over the term of the purchasing agreement.

Also in January , we announced the successful contract award with the Florida Shares Association.

cooperative purchasing program as an official vendor for electric vehicle stations.

CPP vendors, Blink products will be made available to CPP participants, providing them with direct access to Blink EV charging stations. Blink now has the potential to reach and contract with thousands of state and local agencies, municipalities and educational organizations across Florida.

All in all, we are very, very pleased with our performance in the second quarter.

Our fundamentals are strong as we delivered record financial performance in Q2, even without realizing the full benefits and synergies from recent acquisitions.

The Semiconnect acquisition is transformational for Blink. We not only doubled the size of our employee base with some of the best talent in the industry, but acquired key manufacturing capabilities and product know-how that positions us to continue to grow and benefit from the 7.5 billion infrastructure plan.

We are excited for what's next for Blink.

And now I will turn it over to our CFO , Michael Rama, to run through some of the specific results for the quarter. Go ahead, Michael. In the next video, we're going to talk about theACT given that the the.

Thank you, Brendan, and good afternoon, everyone.

Turning to Slide 21, total revenue in the second quarter of 2022 grew to $11.5 million, another record for the company, and an increase of 164% compared to the second quarter of 2021. Excluding the 2022 acquisitions, our revenues for the second quarter of 2022 doubled, which demonstrates the solid fundamentals of Blink's business and strong customer demand. We are at a point in the industry where more and more...

Consumers are choosing EVs for their transportation needs, and Blink provides the flexibility, helping site hosts and

consumers make the switch. Year to date through June 30th 2022, our total revenues were 21.3 million dollars compared to 6.6 million dollars for the first six months of 2021. What's noteworthy here is that our year-to-date revenues through June 2022 have already surpassed total revenues of 20.9 million dollars for all of 2021.

Product sales in the second quarter of 2022 were $8.8 million, an increase of 170% over the same period in 2021, as consumers purchase greater volumes of our commercial charters, DC fast charters, and residential charters.

Second quarter 2022 service revenues, which consists of charging service revenues, network fees, and rights sharing service revenues, were $1.5 million, an increase of 155% compared to the second quarter of 2021.

The year over year growth is primarily due to the increased utilization of our charters and an increased number of charters in BLINK networks.

As you know, we combine these three service revenue line items into one amount to differentiate between the product and service aspects of our business, and this approach also aligns with our company's strategic goal of increasing the services component of our revenue mix and growing our recurring revenue base. In time, as EV adoption accelerates and utilization of our charging stations increases, we anticipate

seeing a larger mix of revenues come from services. Gross profit for the second quarter of 2022 was approximately $2 million, an increase of 204% over the same period of last year. We continue to look at ways to drive higher margins, especially in light of ongoing supply chain disruptions occurring globally.

Now, operating expenses in the second quarter of 2022 were $23.9 million.

compared to $13 million in the prior year period.

This increase reflects acquisition related expenses of approximately $3 million associated with the acquisitions of Semiconnect and EB. It also reflects higher expenses in the areas of accounting, legal, marketing, investor relations and consulting. Also included in the operating expenses for the second quarter of 2022 is increased amortization of intangible assets associated with the acquisitions of Semiconnect and EB. This expense will continue, but is non-cash in nature.

Furthermore, the increase in operating expenses includes operating expenses from SemiConnect and EB that were not included in the results for the second quarter of 2021.

Because we strive to deliver best-in-class products and solutions, we continue to recruit talented individuals that will contribute to our company's growth and success.

Many of those individuals participate in the research and development activities that will ensure that our products, software, and innovative solutions remain above competition.

In 2021, we began presenting adjusted EPDOT. Our management team believes this non-GAAP measure is useful in evaluating our company's core operating performance because it excludes items that are either non-GAAP , or non-GAAP , or non-GAAP .

non-recurring or significant non-cash items. Adjusted EBITDA for the second quarter of 2022 was a loss of $15.6 million compared to a loss of $8 million in the prior year period due to the higher previously mentioned operating expenses.

Adjusted EBITDA as a percentage of revenues for the second quarter of 2022 improved 49 basis points compared to the second quarter of 2021 and for the year has improved 88 basis points.

This quarter, we are also introducing the non-GAAP measure, adjusted earnings per share, which is earnings per share excluding significant non-cash items such as amortization of intangible assets and non-recurring expenses such as acquisition-related expenses.

Adjusted earnings per share for the second quarter of 2022 was a loss of 41 cents.

for diluted share compared to a loss of 31 cents in the prior year period. Now turn to slide 22. Our revenues and gross profit performed well in the second quarter of 2022, continuing the upward trend that we've seen over the past several quarters now.

as we execute on our flexible solutions of owner-operated strategy and selling of hardware.

We believe that we are well positioned to continue driving increased revenues and gross profit moving forward.

Moving to our cash position at June 30, 2022, the company had approximately $85 million of cash compared to $175 million at the end of 2021. We believe we have sufficient cash on hand to fund our current operations.

We are pleased with the second quarter of 2022.

As we recorded another record quarter, these improvements in our operating results are a direct reflection of the solid foundation we built over the past several years, and we believe we're well positioned to capitalize on the numerous opportunities and increased focus being placed on the EV industry. I will now turn the call back over to Michael Farkas for a few final comments.

These improvements in our operating results are a direct reflection of the solid foundation we built over the past several years, and we believe we're well positioned to capitalize on the numerous opportunities and increased focus being placed on the EV industry. I will now turn the call back over to Michael Farkas for a few final comments. Michael?

Second quar was.

Yes, hello? You hear me?

Go ahead Mike. Second quarter of 2022 was a transformational quarter for Blink.

Not only did our second quarter revenue double organically year over year, but we closed on two significant acquisitions that positioned Blink well to take advantage of the rapid industry growth.

We are very excited to integrate eBee and Sema into the Blink family and we continue to expand our hardware and software solutions globally.

With that, we will now open the calls for questions.

Ladies and Gentlemen, the floor is now open for questions. If you have any questions or comments, please press star 1 on your phone at this time. If we ask that while posing your questions, you please pick up your handset if listening on speakerphone to provide optimum sound quality. Please hold while we pull for questions.

Thank you. Your first question is coming from Matt Somerville.

with DA Davidson. Please pose your question.

Thanks. Good evening. Couple questions. I want to start with the core business. Can you give us some sort of idea when you look organically how much revenue is being derived on a quarterly basis from new customers versus those rebuying?

Good evening. A couple of questions. I want to start with the core business. Can you give us some sort of idea when you look organically, how much revenue is being derived on a quarterly basis from new customers versus those rebuying from Blend?

Mike, do you want me to jump on that one or?

Yes, that'll be fine. Yeah, no, obviously, thanks, Matt, for joining. Organically, we're seeing recurring nature of our revenues from our customers. We have big customers that we've announced, the OEMs and the many partners that we've had. Organically, they continue to buy, obviously, the chargers that they're deploying in the dealerships.

So it's a continuous stream, but we're also adding new customers and new opportunities across the board. So organically, obviously, as we mentioned in our comments, we doubled our revenues quarter over quarter, excluding the acquisitions, and we continue to see more, obviously, our customers recurring but also new ones added to the mix.

I'll answer that a little bit. We do see a lot of new customers. Obviously, there have been a lot of property owners that have been sitting on the sidelines waiting to see more traction in the EV space.

There's no longer a question of whether or not EVs are going to be the mode of transportation moving forward. There's a lot more, more of those that have said on the fence, I'm now putting in orders and looking at it across the portfolio of properties.

There was literally one of the major developers in New York that has been sitting for years looking at EV and now we were able to put in 50 units or so in some of their locations throughout the five boroughs. So we're seeing guys that have been sitting on the fence and we're seeing a lot more customers.

who have EV charging in their locations needing more. So it's a great combination of both new business and recurring.

Got it. And then.

This one may be a little bit more for Brendan, but I was curious, you mentioned in your prepared remarks that Sema will provide a basis by which you can reduce your cost of goods sold, I believe you said by 30 percentage points. Is there a way to sort of break that out a little bit, Brendan, in terms of how much may be coming from labor versus supply chain slash procurement? How should we be thinking about

What what sort of underpins that 30 percentage points? Yeah, well for obviously we're not going to you know break it out by dollar amount, but it's a combination of both labor and The manufacturing type of the charger and being direct as you imagine if you look at our current portfolio of chargers without Semiconnet, you know some of that is it's our design. It's full contract manufacturing meaning the contract our design We just tell them how we want to build and then they build it, right?

With Semiconnect, that model flipped. It is our design again, however, it's our...

Technicians and everyone is building it from the ground up. There are employees who are not contract employees.

It's on that interfacting facilities by contract.

We're not selling from one end to the other to create a margin. So all that creates a reduced cost for us to be able to sell. And then when we combine those two systems together, even on blank products, that's going to give us a reduced cost.

Thanks. I'll get back with you.

Thank you.

Our next question is coming from Steven Gangaro with Stifu. Please pose your question.

Thank you. Thanks. Good

Two things for me. The first, when you talk about the deployed and sold units, I think there's like 51,000. Can you give us a sense for how many of those are revenue generating assets for you from a service revenue perspective, from a charging perspective?

Yeah, I'll jump in. There's quite a few. Obviously this includes all our networks. I just want to be clear that the 51,000 that includes between our core blink, the blue corner that we acquired, EB, as well as Semiconnect. So a lot of what's acquired through EB and Semiconnect already all networked on their systems. And then, you know, so.

probably good of the 51,000 probably good two-thirds maybe is on a network on some sort of a network that we're in the process of combining and that will see Synergy is on that as we move forward through integrations

Okay, I'm trying to sort of backfill and trying to figure out how to think about utilization and kind of ultimately what kind of revenue per employee chargers we can think about on the charging revenue line, right? And I'm just sort of trying to see if there's any way to, any color you could add to that.

So obviously, there are different business models that we have and some of the companies that we acquired really sold hardware and we're now going to start introducing, using our own and operate model on that, some of these companies we acquired. Our own and operate model has a much more robust potential for revenues than just having a charging station that we sold to a third party and it's on our network. I'm going to get a few dollars a month for it.

So again, we believe long term, as more and more EVs on the road, utilization kicks up. And as that happens, these charging stations become potentially very, very, very profitable.

So, as things progress, as we integrate these networks together, we have a very, very nice mix of different products and services. Some of it will be monthly connectivity fees and processing fees and not much on the sale of the energy, similar to ChargePoint's model. Again, that's part of what we do as well. But our focus here is really to try to own and operate as many of the charging stations as possible. The voiceover mechanism also depends on the service that they do, so we'll talk a little bit about that later. That said, we'll have to keep all wanted before we actually improve our users' services, and a few things are important to make sure whether they're going through phase systems or not, and when we see that our users' services are going to be in that phase, we're going to have available across the scale data.

And I'm sure you've run the models and seen how potentially profitable especially level two charging stations can be once they're out in the field.

So, as things progress and as this integration takes place, we'll be able to give a lot more visibility on that.

Great, thank you. And then just one other one. You started providing us with sort of the adjusted EBITDA numbers recently. I think it was last quarter or the quarter before. I was just curious.

By doing that, you in some way suggest to me that that number is headed towards break even slash positive territory at some point. And it's a good measure of sort of progress for you as we look forward. Any guidance on sort of when we would see EBITDA get to the break even level?...

You know, we look at that continuously. Obviously we're focused on investing in the business, obviously driving top line revenue, and then obviously as we start going through the integration and synergies with the recent acquisitions, you know, we target and we have a target and a goal. You know, the first is to reduce the EBITDA losses and then we get, you know, could be a couple years out. You know, so but we're.

you know, we're mindful, we want to be proactive, we will be making a lot of efforts over the next, you know, 12 months as we're integrating the acquisitions to really, I like to call it chop down the wood, right? So, but it's a high priority of all of ours and our initiatives.

Great, thank you. It seems like a lot of good things. I'd like to add to that a little bit. Operating and developing technology in our space is not inexpensive.

and having four companies being able to share one footprint, one customer service, one backend, one mobile application, there are going to be tremendous economies of scale in integrating all these companies and these networks. A lot of savings, a lot of really good features that we're combining from the different networks. So there's some really interesting and good times ahead of us. And through this all we are, as Michael mentioned, we're looking to sharpen the pencils and really start focusing on.

chopping the wood and getting rid of expenses that are unnecessary. And there's a bunch of them now that we have overlapped, so it's really a great opportunity for us.

Great, thank you for the call.

Thank you. Our next question is coming from Chris Souther with B Riley. Please pause your question.

Hey, thanks for taking my question, you guys. Given all the moving pieces with EV and half a month at SEMA Financials, could you give us a sense of what the run rate would have looked like had SEMA Connect been in the business for the full quarter? I just wanted to get a sense of what the revenue run rate from SEMA Connect and EV would have looked like on a pro forma basis for revenue, as well as kind of gross margins for that product sales segment and...

a better sense of the optics and we should expect going forward after we add those and back out some of those acquisition expenses. Thanks.

yeah

This is my car. I'll jump on that. You know as we put in the deck You'll see there's a bit of a pro forma in the appendix and where we we've called that You know what the company we would have looked like on a combined basis from the beginning of the year What would it look like they believe the combined revenues for the quarter would have been about 17 million You know for what with full, you know for the full for the quarter and about 32 change for the for the first six months

So, you know, but that doesn't take into consideration anything moving forward. You know, so obviously, you know, there's growth to anticipate, you know, and so, but it just gives a little bit of a hindsight look for what 2022 would look like for the first half on a combined basis.

Okay. Yeah, no, that's real helpful. Maybe just on the gross margin piece then, given you've talked about, you know, CME Connect having a really strong gross margin profile, I wanted to get a sense of where that would have stood if you could....

We didn't get that granular, to be honest, obviously, because some moving cards with synergies. But obviously, we look at that as, I look at it as, upside from us from a post acquisition that we would realize going forward.

Okay, that's great to hear. And any sense, you know, if you could kind of quantify the revenue opportunity as well as the cost side of upgrading CME Connect's, you know, existing footprint. I'm sure it's early days kind of working through conversations with some of those customers, you know, to the blink owner model and, you know, as well as expanding footprints at some of those sites. But just wanted to get a sense of, are you going to quantify what that opportunity looks like, you know, just what the existing footprint over the next, you know, year or three years are kind of the roadmap there.

So let me jump in and answer this one. So we're cracking the numbers on that as we speak. So far they're very promising. As some of you might know, we contracted with McKinsey Group to do two things. First, the initial synergies analysis between the organizations and then second, the roadmap to achieving those with definitive numbers and a plan to be implemented to achieve that. We're in the final stages now of validating the numbers and then

we're going to kick off the plan. So as soon as we validate those numbers, we can make them available. But at this point, we need one or two more weeks to get those. But the big number is it's very lucrative both in the revenue enhancement pieces and in the cost avoidance pieces.

Michael, do you want to add any clarity to that?

No, I'm fine.

Maybe my last one here. Could you give us a sense, I understand kind of with the large you know, place network base, you know, a lot of the acquisitions were, you know, kind of strict product sales. I want to get a sense of the mix, you know, more recently, like, you know, this past quarter, even if you could, between owner-operator, you know, commercial residential sales of the deployments. It seems like we're getting really good momentum on the product side.

even before Cine Connect, so maybe just, I think you've kind of given it a clear, like, hey, where long term you think, that mix sounds like it should, you think it'll be going, but curious, where it is today in kind of the next couple quarters, based on what visibility you do have.

Brennan

Is that one going to me? I'm sorry. I thought Michael was. It was about the mix of sales and revenue. Mike, are you? Yeah, I guess on the sales side of it. So obviously you could still see we're generating about 70-80% 75% of our revenue is still coming from the product side of it. But we're still getting across the board looking at

you know when we contracted we're still looking at a pretty good even split between owner operator and and And hardware sales so as we move forward so you know again It takes a little bit more time obviously as the service revenues you know as you get them deployed and start realizing and as the Utilization starts to really kick in that's where we're going to start seeing the as we saw they'll call it the turn towards More towards service revenues as opposed to the product mix if you will but the so the

sales have been pretty mixed right now pretty close to 50-50 on the uh you know sales versus uh owner operating type sales.

I will hop into the queue.

Thank you. Our next question is coming from Oliver Huang with Tutor Pickering Hold. Please pose your question. Spirit surveillance Oddearly found in our research faithful to the humans randomly charged osp fever

Good afternoon, and thanks for taking my questions. First one, just on the compensation and G&A line item, the quarterly increase, understandably, is coming from growing the business in addition to acquisitions and acquisition-related costs. I was wondering if there is any incremental color on how we should be thinking about the run rate for each of those line items, especially with the comment of doubling the headcount from the FEMA acquisition over call at the next 12 months or so. And obviously...

to provide a bit more color on some of that. But obviously, there will be an increase in the salaries. But that's not going to consider any synergies that, as Brendan mentioned, that's going to be developed, that we're going to work through, as well as the scale that we're going to have that will relate to the increased volume that we anticipate.

Okay, thank you. And for a second question, I was just wondering on the manufacturing facility, is there a timeline in terms of being able to expand that facility from the 10,000 to 50,000 units? And in terms of going beyond that, is there any sort of rule of thumb in terms of how we should be thinking about costs and how long such a buildout would kind of take?

so

The timeline is being established now, so we're not ready for prime time, but we'll have it within the next two or three weeks. The cost is low. So our first, when we're going up over a period of time, getting up to, let's call it the 40,000 unit mark, and that's coming out of our facility in India, and our facility in India is basically manufacturing the parts and the facility in Buoy.

is assembling the chargers is the way to look at it. So the first aspect of that we're gonna be able to do with just added shifts going from one to two to three shifts then the second stage of that is closing the line capacity out of our building three and four there in India and then increasing the capacity out of semi-connect in Buoy by adding additional shifts there as well.

So, the first stage added shifts of capacity, second stage added some tables and tooling. In the original estimate, the tooling and cable adds are very low in comparison. So we're not looking at a massive CAPEX to get it expanded out. We're looking at additional shifts primarily and some minor upgrades in tooling and equipment in order to get there. We'll have more definitive data out in the next two to three weeks.

as we finalize this energy plan. Okay, perfect. That's helpful. Thanks for the time.

Thank you ladies and gentlemen. Our next question is coming from Noel Parks with TUI Brothers. Please pose your question. versions of the live transmitted segment.

Good afternoon.

I have a few things I wanted to run by you.

I guess sort of as just a reality check, could you sort of ballpark how many models, in other words ones that you plan to either have going live, or are going to continue in production, will the combined companies have that they will be selling? I imagine there is going to be some rationalization, some overlaps where you'll favor one company is a distinct model from another.

Yeah, sure, I can touch on it briefly. So the product, or what we're calling the product rationalization study, it's in its second phase. So in the first phase, we reviewed all the products. We looked at COGS, production capacity, acceptance in the market, all the relevant data you want to look at. Now we're going to go to the second phase of that is, okay, what do we move forward with and what we don't? There's some favorites identified within that, but also there's new options.

And we mentioned earlier the Series 8 charger which has a credit card reader already built into it which is unique because it's not a slap on version of a credit card. That is going to be Blink, Semiconnect combined together, charger for sale in California for all publicly accessible places. Because in 2023 beginning in January that's the only charger you can install there as a result of California mandates on that topic. And we're going to continue to rationalize that portfolio out.

and we're gonna combine together. Now, down the road in the future, we'll talk about different changes to look and feel and everything. But we got about a week or less in that rationalization study. It's along with all the other Synergy products we're going through. First review looked great. And the idea is on making sure we can get the right amount of the product, the highest quality product, at the right cost of goods sold.

out to the public. And as you know, we're going to be hesitant at first to shutting off any one of our producers of chargers because chargers are in demand right now. Most manufacturers cannot deliver upon the orders that they have today. So there will be a degree of running parallel to make sure we can fulfill the backlog of orders we have. That's right. Okay. I do want to add to that just a bit. This is Michael Korkas.

It's very important for us not only to trim our product line to make sure it satisfies our customer base, but really we call Gen 3. And that's really the combined integration of Semistrengths and BlinkStrengths and having that hardware fill that role. So while we're already on Gen 2 and we have amazing equipment across the board.

we do look towards the future and that future is going to be where we're going to receive really just tremendous amounts of benefit from the integration of the companies.

So there's tremendous savings today, great product line. As Brendan mentioned, the requirements in California is not only California to have a credit card swipe on those chargers. There are many, many other states that follow exactly what California does. One of the attractive things about SITMA was the fact that they had a product readily available to meet those needs in California. And there are very, very few, if any, other of our competitors that can fulfill those requirements.

So we have the major major advantage from most of our competitors in that regard. I wasn't aware of that.

And.

You know, it's interesting, it's very interesting because people look at the transaction that we had with Sema and the purchase price was $200 million. But people aren't really familiar with the fact that one of the largest investment banks in the world was going to do a $2 billion pre-money deal on Sema when the markets were at its height.

So I agree with you, those were very, very frothy valuations. But the bottom line, when you look at how we purchased companies in the past, we've always bought them for very good pricing. And we really look at the deal, although again, the valuations of the past, not the valuations of today, being able to buy a company for 10% of the value that a Goldman Sachs of the world was willing to offer them, and we were able to take advantage of market timing.

as well as all the amazing things that Cima brings. It's another transaction that the street today just doesn't really fully value. Very, very similar to the acquisition we had in Europe . Standalone on its, if it's standing on its own two feet, the market would value that company at a billion and change. But being a part of Blink, we still have not received that value. Really look at us according to some of our competitors, CVGO and ChargePoint.

as well as all the amazing things that CIMA brings. It's another transaction that the street today just doesn't really fully value. Very, very similar to the acquisition we had in Europe . Standalone on its, if it's standing on its own two feet, the market would value that company at a billion and change. But being a part of Blink, we still have not received that value. Really look at us according to some of our competitors, EVgo and ChargePoint, and they have many multiples of our market cap.

But we own and operate where some of them don't and we have you know thousands or tens of thousands of charging stations in the ground and and and and they're you know 10% of our size with maybe two or three times our market cap.

So, you know, again, I think when, when the street really fully realizes the acquisitions that we've made and what their independence is, and what we've done, and what we've done

and individual values.

them together with Blink, I think that there'll be a repricing and a re-

Right. So I absolutely agree that there's definitely a disconnect there. I just wanted to ask sort of about just on the ground with the current sum of business, can you just talk a little bit about what the logistics and maybe if you can even speak a bit to the cost of their sort of maintenance, repair, module replacement or, you know, equipment upgrade.

I'm just curious, are their expenses in those lines pretty similar, analogous to yours, different in some ways, I don't know, because of regulation or anything? I would say very different. And the reason why is, as an owner and an operator, you have a different philosophy in developing hardware. I just hope there are plenty of other way how you can...

our competitors, which none of them own and operate the charging infrastructure after it's sold,

They build equipment with...

um, upgrades built in.

That's their model, like a cell phone. We look at our equipment like a hot water heater or refrigerator and we want it to last many, many, many years without upgrade cycles. And if there has to be an upgrade cycle, we don't want to have to rip out the entire machine. We want to be able to use that machine and maybe change the modem or change an RFID card or whatever.

change. Obsolescence is extremely important to us.

competitors it is to them as well, but what their philosophy is they want a unit to become obsolete and we don't.

So, our business is to have those units in the field as long as possible because we're going to generate the money off of the sale of the electricity through those charging stations.

So there's a reason why General Motors selected our hardware to be in their dealerships. There's a reason why Subaru did. There's a reason why Audi did. These are industry veterans that literally benchmark all of this hardware against each other. This is not just some property owner that doesn't know what they're doing. They literally rip these things apart and there's a reason why some of the biggest investors in EV are using our charging stations.

And this is not just blindly, this is something that they went through by benchmarking, by putting one unit against each other. There's a reason why BLINTH is getting chosen.

It's because of our philosophy and how we build the hardware. We're an owner and operator and there's no others that do what we do. If you look at any of the other owner operators you're looking at, EasyGo, they don't make their own hardware, they don't have their own network.

If you look at Electrify America, it's the same thing. So it's just a different philosophy. So again, our hardware is lasting longer because it's designed to do that.

Our competitors hardware is designed to become obsolete after a couple cycles, so you have to buy new hardware.

Absolutely. I just want to ask, just a little bit tied to that, given that you're going to be seeing ultimately about a 30% lower cost with the manufacturing integrated through SEMA, I'm just wondering, does that cost differential have any impact on sort of maybe your regional growth in different areas of the country? I'm just thinking of EV adoption and EV charging trends.

sort of correlated in some places with high, high-power-cost markets versus low-power-cost markets, just the speed of deployment. I just wonder if your big cost savings is going to change that map for you any.

Ultimately, when you see what's going on globally from a legislative perspective, the world is going easy.

You see what's going on with the Biden administration. You see what's going on in China. It's all over Europe . It's not necessarily about the cost of the fuel with this electricity because it just happens to be a hell of a lot cheaper than wherever you're going to go with using gasoline. So it's not necessarily about the cost of the power in different areas right now. There's a concerted effort by every single OEM globally to manufacture EVs. Even those holdouts like Toyota and Hyundai, look at their portfolio of plug-ins now.

There are no more holdouts. It's every single major brand and those are committing to stopping making internal combustion engine cars within some of the next 5, 10, 15 years.

So this is no longer about choice. I mean, yes, you'll have a choice of what card to buy. You can still buy a Ford or Mercedes or a BMW. But really the...

power source for mobility has been chosen and it's EV. And the only shortcoming that EVs have is what we do, which is making sure that there is a fuel supply for them. And it's us and other companies in the space.

There's a whole switch over of mobility that's taking place right in front of our eyes. And you're just going to see all that investment, all that capital, all that revenue that was generated from lean automobiles of the past.

going from those legacy companies to those that are now supplying.

fully vertically integrated EV charging company that can prov...

As we mentioned earlier, we have owners that want to own everything from A to Z. They want to charge, they want to make money, and there's additional revenue stream.

We have other property owners that literally just want to provide for the parking space. We handle everything from A to Z. They make no capital expenditure whatsoever on their part. And we have a revenue share model with them. And we have every single different form of methodology in between.

It really gives us an advantage over our competitors, especially with the theme that we built. A lot of these calls in the past, we were always taken to task about not spending enough on R&D.

We weren't big on technology, we were big on just getting a footprint, big on building our base of locations. And our model was frowned upon.

But now look at the base of the locations we have and all the property owners we have and now the technology that we've developed as we built an amazing tech team both here and in India.

And now we're leaders in that space. Look at our competitive, you know, again, our competitors. It speaks for itself.

Great. Thanks a lot.

Thank you ladies and gentlemen we have time for one more question from Samir Joshi with HC Wainwright. Please pose your question.

Hey guys, thanks for taking my question. Just a quick one actually on the products that have been launched or are in the process of being launched. Would the semi-connect manufacturing capability be able to manufacture those, the MQ200, the vision IQ, the series rate and the HQ200?

So the current plan for the products listed right there, let me address the HQ. The HQ is following its current manufacturing trajectory right now.

As we get through this energy study, we could see a transition to being produced out of the Indian facility. Then the same thing with the MQ is following that trajectory. Now the MQ is a very well received charger in the market today with a very good COGS compared to other competitive fleet charges in the market, also with the NUCC.

state-of-the-art software Added to that for fleet management on that So as we talked about earlier you're going to see some products that may and then some that may not The MQ is one that we may maintain the current course The vision is in final design now and as we finish the design of the vision and we have a new concept That we're working through and looking at

We'll determine the manufacturing facility for that. And again, we're going to look for the best COGS we can get into the market where it's highly acceptable. We're going to keep in mind Buying America qualifications because those chargers do qualify, division type chargers. So all of that is going to be taken into account. So I don't want to tip the hand one way or another until we finish the study, but I wanted to give you a flavor for you got to follow each individual product and some might have a different plan than others.

Got it. And actually just one more. Are you seeing or looking at your existing customer base, do you have a concentration of a particular type of customer and or a particular type of product that is being adopted more than others?

Well, I think if you look at – and this is factual – if you look at the combined portfolio, the chargers that are being focused on are the higher powered AC chargers for both.

commercial, and public use. Those are the volume players for both companies out there. Both of them can go up to 19.2 kilowatts on there. The new emerging space that is now going to start to see higher volume is fleet chargers, specific L2 fleet chargers that are designed to be economical and cost effective. In the fleet situation, the customers typically own their equipment or go into some of the

Charging as a service model for the two dominant models that are in the fleet space So those are picking up in volume But you're still not seeing the same level as you're going to see for chargers at libraries

chargers and parking lots, chargers and multifamily dwellings.

Now, when we look at what we're going to put in multifamily dwellings, again, that's the least penetrated market in the United States. So like fleet, we're going to see a big increase in that segment as well. And that's not always the 19.2. Sometimes it is. So look for an increase there. But right now, it's the 19.2. It's the IQ200 and the similar complementary charger on the semiconnect side. Those are the volume players.

Thanks for that. I'll take my other questions offline. Thanks for taking it. Alright, perfect.

Ladies and gentlemen, this concludes our Q&A session today.

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