Q3 2022 Blink Charging Co Earnings Call
Good afternoon, and welcome to Blink charging <unk> third quarter 2022 earnings conference call.
Participants are in listen only mode, there will be an opportunity for analysts to ask questions at the end of todays presentation.
Should need assistance during the conference. Please press Star Zero on your Touchtone phone. Please note that 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 would like to turn the presentation over to Vitale, Vice President of Investor Relations. Please go ahead.
Thank you Kelly.
And welcome everyone to <unk> third quarter 2022 earnings call.
On this call today, we have Michael <unk>, Chairman and Chief Executive Officer, Brendan Jones, President and Michael Rama Chief Financial Officer.
Today's discussion will include non-GAAP references.
These are reconciled to the most comparable U S. GAAP measures in the appendix of our earnings deck.
You may find the deck, along with the rest of our earnings materials and other important content on Blake's Investor Relations website.
Today's discussion May also include forward looking statements about our expectations.
Actual results may differ from those stated and the most significant factors that could cause actual results to differ are included on page two of the third quarter earnings.
Unless otherwise noted all comparisons are year over year.
Now regarding the Investor Relations calendar Blake.
Blake will be hosting investors at the upcoming consumer electronics show CES.
Between the typical January and the April January 23 in Las Vegas.
In addition, blood.
Management will be participating in the annual Needham growth conference in January of 2023.
I will now turn the call over to Michael D partners, founder and CEO of Blaine charging.
Go ahead Michael.
Good afternoon, everyone. Thank you for joining us.
As you can see we delivered an extremely strong third quarter of 2022 highlighted by record revenue of $17 2 million.
An increase of 169% over the third quarter of 2021.
During the third quarter, our product sales grew by 177%.
An increase of $10 $8 million compared to Q3 of 2021.
Service revenue grew by 123%.
Within service revenue.
<unk> network fees grew by over 600%.
I repeat.
600%.
And this is a recurring revenue model with very very strong gross margins.
Our record third quarter results are reflective of our strong fundamentals driven by organic and strategic opportunities.
In the third quarter, we contracted sold or deployed.
7834, commercial and residential Chargers.
An increase of 160% compared to the same quarter of last year.
Most of our competitors don't even have that many units on their entire network, let alone deployed last Q.
Our success in part is rooted in our ability to fulfill customer orders relatively quickly.
Our goal is to establish blink as it reliable provider of choice.
Able to comply with our customers tightened deadlines, even though worlds still impacted by supply chain issues.
And in Q3, we strategically substantially increased the investment in our inventory levels.
Sure that we had the components of equipment and products on hand to meet current and future customer and market demand.
Subsequent to the end of the quarter, we had two major announcements.
On October 11th we announced our all new Blink network and blinked charging mobile apps complete.
Completely redesigned from the ground up.
It's there to power our next generation best in class EV charging experience more on that later.
And on October 18th in conjunction with the Secretary of Labor as visit to Blink headquarters, we announced our current plans to increase blinks U S manufacturing capabilities.
The up to 100000 Chargers per year.
Just for the U S. We're very excited about these announcements as these are important building blocks in our future success here in the United States and globally.
Turning to slide five.
Blink has sold deployed or installed nearly 59000 Chargers since the inception of the company.
We have over 440000 active users on <unk> networks, a number that has been consistently growing.
Blake today has global manufacturing capabilities in the U S.
India and Taiwan.
And most importantly, our advanced hardware and our networks are compatible with the standards adopted by the majority of countries around the globe.
A recent study from Mckinsey published in April of this year.
Is that the United States alone could have 48 million Evs on the road by 2030.
Globally Blue.
<unk>, New energy Finance recently pointed to the need for between $340 million and $490 million Chargers by 2040.
Remember the entire global market today has a few million dollars viable charges deployed at best.
And almost 500 million units are estimated to be needed. We view this as a massive growth trend in the marketplace and a tremendous opportunity for blink.
Turning to slide six please.
Thanks.
Add blink, we are dedicated to providing the best in EV charging and we're proud of the new completely redesigned Blink network and blinked charging mobile apps.
Our state of the art infrastructure Tech stack and user centric approach allowed us to create a technology platform that can be augmented quickly and efficiently without disrupting our customers.
The mobile apps put EV drivers and control by giving them improved search capabilities for nearby amenities and Chargers by ZIP code city business category or address and it seamlessly integrates EV charging into everyday life.
Drivers can save favorite charge locations and manage payment information as well as your payment history and real time charging status.
I encourage everyone on this call to experience the new blend charging apps and network for yourselves and Thats by downloading it at the iOS App store or the Google Android App store.
On slide seven when it comes to who has benefits.
The entire experience has been redesigned with ease of use in mind.
The new cloud based Blink network allows site hosts the manager EV charging business in multiple languages that include English French Greek Hebrew and Spanish across 25 countries with additional languages to be added site.
<unk> will also have expanded functionality and creating dynamic pricing protocols responsive to various use cases locations and schedules.
Our new infrastructure will allow for the faster integration of our recent acquisitions, which will outline in our next slide.
Our legacy businesses currently operate on four separate networks in the near future all of our charges globally will operate on one network.
For networks can talk consolidated to one should translate into major savings and technological innovations.
Turning to slide eight.
Okay.
A recap of our recent acquisitions in June of 2022, we completed the acquisition of semiconductor.
Significantly expanding our charging networks in the United States.
This provides vertical integration and manufacturing capabilities in the U S and globally and allows blinked to comply with by American mandates.
In April of 2022, we acquired the UK based electric Blue, giving us access to the UK and Ireland fast growing markets and adding nearly 200 chargers to our global footprint.
So overall as you can see.
In Q3, we continued to position <unk> for significant current and future growth.
Our equipment, our new and updated networks and apps will serve as the foundation to launch new services and functionality in the future.
With that I'll turn the call over to Brendan Jones, President of Blink to discuss some of our recent developments.
Thank you Michael and good afternoon, everyone.
If we now go to slide 10 within the last 12 months blank has contracted sold deployed or acquired over.
Charters, but domestically and internationally, bringing.
Bringing the total charges account for the company to over 58000 Chargers since blinks inception.
We have a diverse mix of deployments in the United States and abroad with 74% of the total companywide Chargers deployed in North America, and 26% deployed internationally.
Now flip to slide 11. This is a partial list of our customers, but as you can see from the logos and verticals. We operate in this speaks to the breadth and depth of our products and services.
We've won numerous multiyear contracts with a variety of well respected commercial enterprises healthcare facilities multifamily complex as planned communities fleets and Mr municipalities.
We are especially seeing strong demand from fleet customers. In fact, we were selected as a preferred provider by one of the worlds largest delivery service companies, which we are very very excited about.
Overall customers choose blinked because of our flexible business model and superior products. We are the only fully integrated charging provider in the U S market.
Now if we go on to Slide 12, we had a great visit from U S Secretary of Labor, Marty Losch, and we subsequently announced that we are planning to expand our U S manufacturing footprint by adding another facility to produce Chargers.
This new facility is targeting about 10000, DC fast Chargers and approximately 20% to 40000 L. Two charges per year.
Our current target, which includes the approximately 40000 unit expansion at our Bowie, Maryland City facility allows blinks annual U S charges production capacity increased to up to 100000 units in fact, we've already visited four different potential locations and held.
<unk> with the local.
Municipalities, there and we shared and discussed our plans.
In the meantime, as Michael mentioned earlier, our team has focused on securing additional inventory in order to keep up with demand.
Earlier this year, it became abundantly clear to us that the supply chain.
Fly chain constraints would persist we decided to proactively increase inventory to ensure we could meet our customers' needs and demands.
On slide 13, it details what we believe are industry, leading software and manufacturing.
Capabilities, we leverage our manufacturing engineering competencies to meet all EV charging needs.
Unique advantage and our competitive landscape is like.
Landscape that Blink cats, our approach has multiple benefits one it allows us to test and identify hardware and software capability early in the design process and two it gives us significantly more control over the supply chain inputs and manufacturing planning in our facilities in the U S.
S and globally.
Now if we move to slide 14, you can see examples of our innovative product portfolio. This includes our network HQ200, Charger, which provides up to 50 amps of level two charging for Holland.
For homeowners. This charter is already on sale with more information to be released within the coming weeks.
Networked MQ design.
Our growing commercial and fleet applications and the series eight charger is one of the only fully integrated Chargers with credit card capabilities that complies with the credit card swipe requirements in the state of California.
Notably this is not a bolt on solution, but a fully integrated charger that specific.
Specifically designed with this functionality in mind.
Next you can see the picture of our vision IQ.
200, charger with a new design to take advantage of advertising opportunities in urban and retail locations.
And the Blink E series is an intelligent affordable and scalable charging solution that.
Any location is compact design and it supports technologies like OCD to no bi directional charging and BTG.
In Q2 hundred will be used in our European and Israeli markets on Slide 15, you can see our current DC fast charger offerings. What is notable here is that we have products.
<unk> many applications in North America, Europe , South America, and even Asia markets. These range anywhere from a 30 kilowatt wall mounted charger to a 350 kilowatt kilowatt stationary charger and thats not yet we are working diligently to introduce <unk>.
More advanced DC charter to satisfy the expanding DC fast charging landscape.
You can see that we have a wide ranging portfolio of charging solutions to fit the needs of any customer public or private smaller large with the ability to penetrate numerous end markets.
Also before I conclude on slide 16, I'd like to just touch on our progress with the integration and synergies of our recent acquisitions of Blue corner electric Blue and semi connect.
All are going according to plan on the revenue side. This is something that we addressed in the early days. After the acquisition for example, both Blink and semi connect sales teams starting working together on lead generation complementing each other's efforts and product offerings. In addition, we've been working.
Diligently on converting some of the semi connects largest customers to the owner operator model.
Among them are large property management companies as well as large multifamily apartment owners. One example that comes to mind is Crow holdings co as a leading real estate investment firm with over $20 billion in assets under management, we just secured our second order of Chargers for a property.
In Denver under the owner operated model customers. Appreciate this flexibility in our offerings as they chose to deploy.
Critical capital and allow blink to own and operate the chargers at their location.
Additionally, on the cost side of the equation. We are also on track we have completed a comprehensive study and are in the implementation phase now our management team is conscientious about controlling costs and maximizing synergies we are hiring very strategically as we are.
Implementing a G&A efficiencies and optimizing our sales and customer service functions.
The newly launched network and mobile application will be a tremendous component of our integration process as we bring legacy acquisition charges onto the new network and tech infrastructure, thus, reducing our overall <unk>.
And support cost spend.
All in all we're very very proud with the performance in the third quarter. Our fundamentals are strong as we delivered record and I say that again record results in Q3, even without realizing the full benefits and synergies from our recent acquisitions.
Our positioning bling for current and future growth driven by the fast adoption of electric vehicles and favorable regulatory environments. This includes the administration's seven 5 billion infrastructure plan and be in place in production in.
In the U S and numerous government programs in Europe and elsewhere. We are very very very excited on what's next for Blake I will now turn it over to our CFO Michael Rama to runs through some of the specific financial results for the quarter go ahead Michael.
Thank you Brendan and good afternoon, everyone.
Turning to slide 18 total revenue in the third quarter of 2022 grew to $17 2 million another record for the company and an increase of $10 $8 million or 169% compared to the third quarter of 2021.
The solid performance in the quarter was driven by organic growth underlying.
By the strong fundamentals in our business and the results from acquisitions of electric Blue and semi connect.
Year to date through September 32022, our total revenues were $38 5 million compared to $13 million for the first nine months of 2021 with an increase of $25 $5 million, we have nearly tripled.
Our revenue for the first three quarters when compared with the same period in 2021.
Product sales in the third quarter of 2022 were $13 4 million, an increase of $8 $5 million or 177% over the same period in 2021.
Customers purchased greater volumes of our commercial DC fast Chargers and residential Chargers.
Third quarter 2022 service revenues, which consist of charging service revenues network fees and ride sharing revenues were $3 1 million, an increase of 123% compared to the third quarter of 2023.
Year over year growth is primarily due to the increase utilization of our Chargers and an increased number of Chargers blinks networks.
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 service component of our revenue mix and growing our recurring revenue base in time.
As <unk> adoption accelerates and utilization of our charging stations improves we anticipate seeing a larger mix of revenues come from services.
Gross profit for the third quarter of 2022 was approximately $1 8 million or 28% of revenue. This compares to about $900000 or 14% of revenue in the third quarter of 2021 as you can see our gross profit doubled year over year as a percentage of revenue is primarily driven by strong.
<unk> performance in product sales service revenues and improved performance in ridesharing and warranty as we expand our in house production capacity, we expect continued improvements in our gross profit.
Operating expenses in the third quarter of 2022 were $29 3 million compared to $16 $7 million in the prior year period.
This increase was primarily due to higher expenses in the areas of accounting legal marketing Investor Relations and consulting also included in the operating expenses for the third quarter of 2022 is increased amortization of intangible assets associated with the acquisitions of semi connect and <unk>. This is an expense that will continue but is non.
Cash in nature.
Furthermore, the increase in operating expenses includes operating expenses from both.
<unk> and <unk> that were not included in the results for the third quarter of 2021.
Adjusted EBITDA for the third quarter of 2022 was a loss of $17 $6 million compared to a loss of $8 4 million in the prior year period due to the previously mentioned higher operating expenses adjusted EBITDA as a percentage of revenues for the third quarter and for the first nine months of 2020 to both improve.
<unk> by about one third when compared to the same periods. In 2021. This performance was achieved without the impact of synergies that we expect to realize going forward.
Adjusted earnings per share for the third quarter of 2022 was a loss of 47.
Compared to a loss of 36 in the prior year period non-GAAP adjusted EPS as defined as adjusted net income, which excludes significant noncash items, such as amortization of intangible assets and nonrecurring expenses such as acquisition related expenses divided by the number of shares outstanding.
Now turning to slide 19, our revenues and gross profit performed very well in the third quarter of 2022, continuing to continuing the upward trend that we've seen over the past several quarters now in part boosted by.
Results from recent acquisitions as we execute on our flexible solutions of owner operated strategy sell hardware or facilitate the installation of Chargers and continue to further vertically integrate the key components such as hardware design and manufacturing. We believe that we are well positioned to continue to capture market share.
And drive revenue growth.
I have to say that today in today's.
Today's inflationary environment customers appreciate our flexible business model the customers themselves can decide on how to deploy their capital.
Moving to our cash position at September 32022, the company had approximately $57 million of cash. It is notable here that we have been proactive in increasing our inventory levels in the third quarter by nearly $7 million sequentially to ensure proper levels of product on hand to mitigate supply chain risks and.
To support our rapid growth in demand.
We're very pleased with the results for the third quarter not only did we achieve record revenues. We also showed significant improvements in our operating results. These are a testament to our flexible operating model and the strong demand for products that satisfy a wide variety of customers from homeowners ret and residents and multiplex multifamily units.
The sophisticated fortune 50 fleet customers as we continue to integrate the recent acquisitions and leverage the operating efficiencies to drive continued growth I will now turn the call back over to Michael <unk> for a few final comments go ahead Michael.
The third quarter of 2022 was another monumental quarter for Blake.
We achieved significant year over year top line growth driven by organic and strategic opportunities.
Launched a newly completely redesigned networking apps.
And we announced plans to increase manufacturing in the United States.
Brink is unique in our industry because we are the only fully vertically integrated EV charging provider in the U S.
While competitors typically offer products with charging services Blink designs manufacturers owns the network that operates our Chargers deploys the hardware and we also own a substantial amount of our equipment in the field.
In addition, we offer a modern tech stack and we provide business models that best serve our customers.
We have a hardware solution for every type of location, where there's single and multifamily residential fleet and workplace retail commercial and even high traffic travel corridors and.
And with multiple deployment methodologies to get those chargers out there, giving us unparalleled optionality the property owners that none of our competitors can match for example, if a property owners simply wants to buy equipment.
Certainly do that however, we prefer the value added structure provided by our owner operator model, creating a substantial long term exclusive recurring revenue model for Blink.
Before I conclude there is one last thing I'd like to share with you.
As Blake has done with level two charges in the past.
Blink and the combined <unk> are going to do with DC fast Chargers in the future.
I'm very proud to show you. The current design of our new D. C. Supercharger that is under development.
In addition to having superior aesthetics. This will be our best in class type charger compatible with the highest voltage vehicle architectures like the 800 volt architecture, you're seeing some of the most advanced EV is being released.
Pricing and availability will be off the charts.
We can't wait to tell you more about it in the future with that we will now open the call for questions.
Certainly the floor is now open for questions. If you have any questions or comments. Please press star one on your phone at this time, we ask that while posing your question. Please pickup your handset if listening on a speaker phone to provide optimum sound quality. Please hold just one moment, while we pull for questions.
Your first question is coming from Steven <unk> with Stifel. Please pose your question your line is live.
Thank you and good afternoon everybody.
Good afternoon good afternoon.
I think theres two things the first would be around the product margins.
You delivered I think about 35% profit margins they were up I don't know.
Seven 800 points sequentially, when we think about the product side of the business and obviously youre a integrated here this summer business semi connect business.
Should we think about the progress and those margins going forward or was there any anomalies here or is this a is this a trend that we should see.
<unk> I understand the supply chain issues inflation et cetera, but how should we think about those margins going forward.
I am very simply we're going from a path of us having third parties manufacture equipment for us.
Doing it internally.
So it's going to be very impactful to the blink business.
Moving forward.
And when we think about the.
And by the way I just wanted to be very clear that that's not happening overnight.
As you mentioned there are issues with the supply chain. So we're looking to get equipment from all of our different vendors today, but the ultimate goal is for us to produce our own goods and that brings us up a couple of notches.
When it comes to having to procure equipment and components and so on and will ultimately lead to we believe higher margins in the future.
Okay. Thank you and then the other one.
I've asked you this before and I'm, just I'm trying to get a sense.
Think about the.
Services revenue line.
And the traction there I understand you'll be adoption is a big driver.
But.
How should we think about the number of units that are driving.
That business, because I guess.
It evolves here I would imagine those margins get get better in the utilization goes up.
About.
Sort of the whether the numbers are going up because you're getting more throughput at your existing.
Installed base or if it just simply a function of the installed base going up.
It's actually a combination of both.
We're seeing higher utilization at our current Chargers and we're getting more obviously.
More charges out in the field.
And any guidance on how to sort of model that going forward.
<unk>.
It's obviously a high margin business, we're trying to do so I'm trying to get a sense of how to think about that number.
Michael you want to maybe give you yes.
Better visibility on that what color, yes, no we're expecting as EV penetration continues to expand we expect.
That number or services is not only.
Charging revenues, but also network activity right, so as well as some other ancillary services. So as more units are connected more online more connected to their networks.
And.
As well as more EV adoption and penetration in service.
Utilization increases.
We expect that to continue to increase and go higher.
As we've always said that's kind of our sweet spot.
Operator and really.
Generating revenues high gross profit revenues from the service side of the business.
Okay, great. Thank you for the details.
You're welcome.
Yes.
From Matt Summerville with D. A Davidson. Please pose your question your line is live.
A couple of questions first just with respect to capacity can you remind us what your current in house capability is between Maryland, India and I think you mentioned, Taiwan and how this new capacity comes online will it be in waves will it be all at once and just remind around the timing.
And then what the ultimate run rate is and how quickly you think you can be actually producing at capacity and then I have a follow up.
Okay. So let's start first with.
U S based capacity and what it looks like today. So right now we're between 10 to 11000 units out of the.
Facility and that's the current state.
As we mentioned during the acquisition the plan is to increase that to upwards of 50000 those plans are in.
The first phase of that plan is increasing the ships.
From what they are now at a standard one shipped to up to two shifts and then moving the three ships to up the cap capacity. There. The subset of that plan is a little bit more square spirit has added to that facility to get us up to that 50 Mark.
When you think about the relationship between buoy in India, India becomes the parts manufacturer of all the components that are needed in all of those components or subsystems put together and who in the finished product is out from there. So that's how we get to the 50000 those plans are as I said in.
Play the second or phase two of the Big Master plan is to acquire some additional land within the United States.
Then.
Once we acquire that land to go ahead and build or buy a parcel with a building on it and then and that facility will begin to construct the DC fast Chargers and add additional <unk> capacity to meet the expected market demand as Michael outlined in his original comments.
Comment on it now light on in parallel everything is not going to happen at once so we'd have to maintain our global manufacturing presence third party contract suppliers, such as light on and on.
A third party.
Partners in Europe simultaneously. So there was a high level on all of that let me know.
If you need any clarity as we move forward.
No.
That's helpful. Thank you Brendan and then just kind of a housekeeping item relative to the 17 two in revenue that you guys generated this quarter.
Michael can you disclose what the acquisitive contribution was so we can kind of get to an organic growth number for Blake. Thank you.
Yes, I'll provide.
Between semi and <unk> for the quarter it generated about $6 5 million in revenues.
No.
It was a good contribution.
And it was so but we still had good organic growth as well for the quarter.
Great. Thank you guys.
Your next question is coming from Chris <unk> with B Riley. Please ask your question your line is live.
Hey, guys. Thanks for taking my questions here maybe.
Maybe just.
A bit more on personnel some of the acquisition.
Are any of the services revenue coming from either you'd be charging or semiconductors that.
Mostly in the product side.
We're getting both we're getting service as well as product.
Their network fees as well as the.
Charging revenues from.
Theres also as an owner operator model that also.
Producers charging revenues as well.
Got it okay.
So the charging services revenue that's coming from company owned stations and networks could be network.
Yes, okay, so youre getting network from them as well and potentially.
<unk>.
Networks from ones that you don't own as well would be kind of a way to kind of parse it out.
That's correct.
Okay and kind of other the other one that we didn't mention there, but it's in there as a service contract revenue you get on non Blink cones equipment.
That applies so all in all the different iterations.
Networking services and service contract revenue.
Okay.
That all makes sense can you provide maybe an update on the size of the <unk> station kind of footprint.
Any kind of rough ballpark of where utilization is today.
Youre discussing kind of improvements that we're seeing lately.
Michael utilization yet.
Yes.
Seeing a network where we are.
We mentioned in our comments Theres four networks now.
Close to a 44000 units on all the combined networks between links and connect all the networks that we have for the various companies that we've acquired.
And and.
And utilization.
We continue to see increases in utilization as Theres more EV penetration.
Still similar to how the adoption of the EDI.
It is penetrating from a vehicle standpoint, but also we're seeing even higher.
Utilization in Europe is still so so all is trending I guess, it's trending in the positive direction and we are encouraged.
With the third quarter produced.
Okay, maybe just the last one I think last call you talked about.
Work with some consultants around.
Synergies with Sam I, just wanted to see if any update on kind of quantifying the cost that you think you could get there.
Timelines around kind of the broader roadmap of the combined which I think was kind of part two of that engagement.
Yes, so I'll pick up that that part so in terms of realizing synergies were at.
We are.
On the sales.
Side of it we're already actively involved in combining the organizations together that.
Activity is already happening as we outlined in the call we're already exposing both businesses and sales teams with now becoming one.
Sales team with a multiple group of products.
He started the cross population of them selling the 17th selling so Blake the owner operator model and all of that is where were really long term revenue streams.
As Youre aware the model that we put together as a learning model. So it keeps refreshing itself and getting more data on where the most optimal sites are there one or later model, we're able to cross apply that data and look at the semi connect portfolio and find that.
Those sites, where the return on investment is going to be quite good over time, and we've already started to capture business as we outlined as a result of that so sales synergies moving on operational synergies are moving forward right now we have a dedicated team.
Analysis report.
And all of those operations.
Related to support call Center Network operations Center service and maintenance all of those are underway and we'll realize the true benefits and synergies as we move into 2023.
Got it I appreciate all the color there I'll hop in the queue. Thanks.
Your last question is coming from Sameer Joshi with H C. Wainwright. Please pose your question your line is live.
Yes, good afternoon.
Thanks for taking my questions.
So just a couple of.
Two questions on that result.
The network fees.
Yes.
They are substantially higher.
Was this mainly because of the acquisition or was there some organic growth in the network.
Hi, Jeff.
Yes, it was actually both.
The same accountant connect acquisition, but also the organic growth that's driving the network activity and the.
Expansion of our.
More chargers and more adoption into the net.
Networks.
Okay.
Yes.
Yeah, Yeah and then.
Between the.
And the operating expenses, we see compensation and general administrative costs sort of like swap the compensation went up in general in G&A cost went down in the quarter sequentially.
Is there something that.
You'd want to point out.
Going on.
Yes, yes in the in the comp.
It wouldn't be included in compensation expense is share based compensation.
So sequentially, we had higher share based comp that got.
<unk> accounted for it in the third quarter because of that.
<unk>.
Grants and equity that was.
That was.
Granted during the I think.
The second quarter, but certain achievements.
Accomplished in those programs. So so a majority of that is going to be the share based comp that went up not cash if you will.
And then the lower G&A get to see that the G&A. It's so were working on.
We're working hard so it's showing.
We're working on the G&A, we're where we're trying to.
We're working to integrate and see where we could.
The more scalable.
We're going to see some of those.
It reflected early on.
Understood. So we can see some operating leverage leverage not just by increasing revenues, but also reduce costs.
So thats the expectation, yes, as we move forward.
Our opex as a percentage of revenues is expected to decrease this SBA.
Expand and penetrate and.
And it really integrate.
The acquisitions.
Got it.
Blake so.
Got it and then just stepping back.
Seven 5 billion $5 billion of which is coming to the states.
The kind of visibility do you have on individual stage programs and how they are implementing that are planning to implement that if you have any insight that you may not know about that could be good.
Yes.
All states now have been approved.
Under the federal program.
The <unk> plant that submitted.
Now it's back to the state.
To move forward with the implementation program no.
Sage has moved forward with RFP yet most are in the very beginning stages of RFID. So it is what theyre going to how they're going to define further.
Players that are active in the state.
And through that analysis, and then individually they are adjusting and being additive to the Navy scorecard on what they want for their state no state can do.
Acquirements as outlined by the scorecard.
We're in conversations with the multiplicity of stay as they.
We're asking preliminary information, we're meeting with as many states as possible.
Scott.
Capabilities under heavy and we continued making progress on that but as of yet.
We're not seeing anything being issued yet and we will see how aggressive. It is in Q1 of next year. We're anticipating the bulk of navy to be played out as you get into Q3, and then into Q4 and then indeed into 2024.
And as you know the program is being stretched further out and the funding is available further out so we're being aggressive.
<unk> keeping up to speed working with the states and we'll continue to do so.
Months and quarters that follow.
Yes, no. That's good to know thanks for that insight and glad that you are.
Hello, Frank.
Just one last question about.
This new supercharger design.
Will it be ready for CES at least in a conceptual oklahoma or something.
Most likely not.
Okay.
Yes.
Yes.
Very good.
I think most likely not but we may surprise you.
No.
Congrats on all the progress over the last several quarters.
Thanks.
Thank you.
You have a follow up question coming from Steven <unk> with Stifel. Please pose your question your line is live.
Alright. Thanks, Thank you for taking the question.
Just could you remind me as we think about the fourth quarter and you sort of.
The moving pieces on the top line.
Could you just remind us about sort of seasonality and different kind of puts and takes we should be thinking about that impact the fourth quarter.
Okay.
Yes.
Yeah go ahead Michael.
No no no no obviously.
As we saw with the sales that got reported over 700 800 expect.
That's kind of an indicator of where we think the quarter. Good good start at but obviously.
No one is going to be the weather.
Some areas could be impacted and it just depends so that it could be a little variable.
Unsure of at this point in time, but.
But michael more color to that.
Other than that again, the industry is growing and there is a lot of incentives.
Nationwide and even areas globally to get charging equipment deployed there's also mandates in certain areas now new construction and so on.
We're staying on top of all of that in the industry is growing.
If you heard what I said earlier Bloomberg predicts that by 2040, youre going to need about a half a billion.
Charging stations globally.
So we've got to get from where we are today, which is only a couple million Chargers that are deployed today viable Chargers.
And get to that.
Almost 500 million number.
To be able to really support E mobility globally. So we're seeing tremendous growth, we're seeing tremendous demand.
We expect that growth to continue for the foreseeable future.
Okay.
But from a seasonality from a fourth quarter perspective are there.
But when you're talking about weather.
I think about sort of new car sales maybe rising.
Is there any is there any sort of normal seasonal patterns in the fourth quarter to just kind of over one times.
Remember, we are installing the equipment out in the elements.
There are certain areas, where it's very very difficult.
If the ground is very very cold.
So the seasons do impact deployments.
So again.
It could impact negatively in if we have a really mild winter it could allow us to accelerate our growth, but yeah. Typically in these times because it is a lot of outdoor work.
And these units are deployed.
The elements it could impact things based on weather.
No.
It's helpful. Carr, just sort of trying to think about the fourth quarter, but I appreciate the color.
Other than that we see massive growth again.
There is.
A lot of amazing automobiles on the road today that really satisfy a lot of different consumers' needs and desires.
Youre seeing the highest end of the market being electrified and youre seeing the lowest end of the market being electrified now.
It is the future of mobility, and we need to make sure that there's enough charging infrastructure available to fuel all these cars are coming into the marketplace.
So that simple.
Excellent. Thank you everyone for your time.