Q3 2024 Blink Charging Co Earnings Call

November 7, 2024

A question and answer session will follow the formal presentation if.

If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

Speaker Change: Please note. This conference is being recorded I will now turn the conference over to your host Vitale cilia VP of capital markets and F. P. M. A you may begin.

Yeah.

Thank you Holly and welcome everyone to <unk> third quarter 2024 earnings call with US today, we have Brendan Jones, President and CEO, Michael <unk>, Our Chief operating officer, and CEO elect and Michael Rama <unk> Chief Financial Officer.

Thank you for watching!

Music

Discussion today will include non-GAAP references these.

Speaker Change: These are reconciled to the most comparable U S. GAAP measures in the appendix of our earnings deck.

Speaker Change: You may find the deck, along with the rest of our earnings materials and other important content on Blake's Investor Relations website.

Speaker Change: Greetings. Welcome to the Blink Charging 3rd Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation.

Speaker Change: Today's discussion May also include forward looking statements about our expectations actual results may be different from those stated.

Speaker Change: The most significant factors that could cause actual results to differ are included on page two of the third quarter 2024 earnings deck.

Speaker Change: Unless otherwise noted all comparisons are year over year.

Speaker Change: Please follow our announcements and blinks Investor relations website for future Embeds events for investors.

Speaker Change: Thank you Holly and welcome everyone to <unk> third quarter 2024 earnings call with US today, we have Brendan Jones, President and CEO, Michael <unk>, Our Chief operating officer as he always liked and Michael Rama <unk> Chief Financial Officer.

Speaker Change: Now I'd like to turn the call over to Brendan Jones, <unk>, President and CEO Brendan. Please go ahead.

Brendan Jones: Thanks for tally and good afternoon, everyone and thanks for joining us here today.

Brendan Jones: During the third quarter 2024, we continued to execute on our strategic priorities and initiatives.

Speaker Change: A discussion today will include non-GAAP references.

Speaker Change: These are reconciled to the most comparable U S. GAAP measures in the appendix of our earnings deck.

Brendan Jones: Total company revenue was $25 $2 million with service revenue, representing $8 8 million or approximately 35% of the total company revenue.

You may find the deck, along with the rest of our earnings materials and other important content on Blake's Investor Relations website.

Speaker Change: Today's discussion May also include forward looking statements about our expectations actual results may be different from those stated.

Gross margin in the third quarter was 36% significantly exceeding our full year 2024 target guidance of 33%.

Speaker Change: The most significant factors that could cause actual results to differ are included on page two of the third quarter 2024 earnings deck.

Brendan Jones: Now during the third quarter, we contracted sold are deployed 6978 charges globally.

Speaker Change: Unless otherwise noted all comparisons are year over here.

Brendan Jones: Representing a 17% increase year over year, and a 70% increase sequentially.

Speaker Change: Please follow our announcements and blinked Investor Relations web site for future investor events for investors.

Brendan Jones: What is notable here is that the majority of this growth comes from L. Two Chargers built by Blink, where we command higher margins than third party manufacturing units further validating our vertically integrated model.

Speaker Change: Now I'd like to turn the call over to Brendan Jones, Blake's President and CEO Brendan. Please go ahead.

Brendan Jones: Thanks for tally and good afternoon, everyone and thanks for joining us here today.

Brendan Jones: During the third quarter 'twenty 'twenty four we continued to execute on our strategic priorities and initiatives.

Brendan Jones: On the energy side, Blink dispersed nearly 37 gigawatts of energy across all Blink networks globally compared to 16 Gigawatts in Q3 of 2023. This is a 126% year over year growth is largely driven by demand for charging in our markets and the <unk>.

Brendan Jones: Total company revenue was $25 $2 million with service revenue, representing $8 8 million or approximately 35% of the total company revenue.

Brendan Jones: Gross margin in the third quarter was 36% significantly exceeding our full year 2024 target guidance of 33% now.

Brendan Jones: <unk> number of units deployed on our networks sequentially, we saw energy disbursement grow 12% in just one quarter compared to 33 gigawatts dispersed in Q2 of 2024.

Brendan Jones: Now during the third quarter, we contracted sold are deployed 6978 charterers globally.

But what we think is most important to highlight is the progress we've made and continue to make to establish <unk> as a more profitable and better positioned company for future growth.

Brendan Jones: Representing a 17% increase year over year, and a 70% increase sequentially.

Brendan Jones: What is notable here is that the majority of this growth comes from L. Two Chargers built by Blake, where we command higher margins than third party manufacturing and its further validating our vertically integrated model.

In Q3, we reduced our cash burn by $3 $6 million.

Or a reduction of 27% compared to Q3 of last year.

Brendan Jones: On the energy side.

Brendan Jones: Year to date, we've reduced our cash burn by $45 million or 50% and let me repeat this again, we reduced our cash burn by $45 million from last year's tax spend and this excludes financing activities, so the efficiency and cost control.

Brendan Jones: Dispersed nearly 37 gigawatts of energy across all Blink networks globally compared to 16 Gigawatts in Q3 of 2023. This is 126% year over year growth is largely driven by demand for charging in our markets and the increased number of units deployed.

The initiatives, we've outlined and began implementing over a year ago are delivering meaningful cost reductions and we are pursuing additional opportunities to drive continued efficiencies moving forward.

Brendan Jones: On our networks.

Brendan Jones: Sequentially, we saw energy disbursement grow 12% in just one quarter compared to 33 gigawatts dispersed in Q2 of 2024.

Brendan Jones: But what we think is most important to highlight is the progress we've made and continue to make to establish splunk as a more profitable and better positioned the company for future growth.

Brendan Jones: Now if we jump to slide five you will see that what makes blink unique is our owner operated portfolio of Chargers that so strongly contribute to our gross margin in 2024 as of September 30th We had 6442 owned and operated Chargers and that is 20.

Brendan Jones: In Q3, we reduced our cash burn by $3 $6 million or a reduction of 27% compared to Q3 of last year.

Brendan Jones: 8% growth versus the same period last year as a reminder, in our owner operator model, we install maintain and also received the lion's share of the revenue.

Brendan Jones: Year to date, we've reduced our cash burn by 45 million or 50% and then let me repeat this again, we reduced our cash burn by $45 million from last year's tax spend and this excludes financing activities, so the efficiency and cost control.

Brendan Jones: When rated by our Chargers.

Brendan Jones: Substantial increase in owner operated units is one of the main drivers of service revenue growth in the third quarter.

Brendan Jones: All the initiatives, we've outlined and began implementing over a year ago are delivering meaningful cost reductions and we are pursuing additional opportunities to drive continued efficiencies moving forward.

Brendan Jones: These numbers DC fast Chargers have been gaining more and more momentum in fact revenue generated by Blink owned and operated DC fast Chargers went up 544% year over year not a huge number.

Brendan Jones: Now if we jump to slide five you will see that what makes blink unique is our owner operated portfolio of Chargers that so strongly contribute to our gross margin in 2024.

Brendan Jones: As of September 30th and across all of our networks now we had a total of 1278, DC fast Chargers, which provide important data on location pricing and utilization. We use this data to inform blink on how does successfully deployed blink one DC fast charge.

Brendan Jones: As of September 30th we had 6442 owned and operated Chargers and that is 28% growth versus the same period last year.

Brendan Jones: <unk> across the U S and in Europe.

Brendan Jones: As a reminder, in our owner operator model, we install maintain and also received the lion's share of the revenue.

Brendan Jones: Now if we look at product sales on our first and second quarter, earning calls we noted lower product revenues and we stated that this would continue through the third quarter as expected our third quarter product net revenues reflected muted delivery activity.

Brendan Jones: <unk> generated by our Chargers.

Brendan Jones: This substantial increase in overall operated units is one of the main drivers of service revenue growth in the third quarter, along these numbers D. C. Fast Chargers have been gaining more and more momentum in fact revenue generated by Blink owned and operated D. C. Fast Chargers went up 540.

Brendan Jones: That said product sales were faced with a very challenging comp in 2024, as we saw significantly stronger DC fast Chargers sales, particularly to automotive dealerships in 2023 compared to this year.

Brendan Jones: 4% year over year that'll be a huge number.

Brendan Jones: Most dealers, who wanted to acquire Chargers have them now.

Brendan Jones: So we have been replacing dealership sales by focusing on other sales verticals, such as multifamily dwellings commercial fleet local and state governments offices hospitals, and schools, which provide blink with a more profitable and sustainable revenue stream.

Brendan Jones: <unk> across the U S and in Europe.

Brendan Jones: Given the shift in product sales as you can see on page six we're now adjusting our full year overall guidance to $125 million to $135 million, we are maintaining our gross margin target of approximately 33% and we expect to achieve positive adjusted EBITDA in the.

Brendan Jones: Now if we look at product sales on our first and second quarter, earning calls and we know the lower product revenues and we stated that this would continue through the third quarter as expected our third quarter product net revenues reflected muted delivery activity.

Brendan Jones: That said product sales were faced with a very challenging comp in 'twenty 'twenty four as we saw significantly stronger DC fast Chargers sales, particularly to automotive dealerships in 2023 compared to this year, most dealers who wanted to acquire charters have them now.

Brendan Jones: Half of 2025.

Brendan Jones: As we examine the first three quarters of 'twenty four Blink is encouraged by the improving EV sales trends, especially in September and October we believe the EV sales increases will create future sales opportunities for blink. According to Kelley Blue book EV sales in the U S grew 11.

Brendan Jones: Now.

Brendan Jones: So we have been replacing dealership sales and by focusing on other sales verticals, such as multifamily dwellings commercial fleet local and state government offices hospitals, and schools, which provide blink with a more profitable and sustainable revenue stream.

Percent year over year in the third quarter and reached record highs in terms of both sales volume and share of the U S. Auto market. An estimated 346000 Evs were sold in Q3 in the U S, which is an increase of 5% from Q2 of 2024.

Speaker Change: Globally E vs accounted for 88, 9% of all new car sales in the third quarter up from our previous high of seven eight in Q3 of 2023.

Speaker Change: With this promising EV industry data, we are energized about capturing the corresponding potential demand for EV charging infrastructure as clients look to provide charging services for their growing fleets.

Brendan Jones: Half of 2025.

Brendan Jones: As we examine the first three quarters of twenty-four Blink is encouraged by the improving E V sales trends, especially in September and October we believe the EV sales increases will create future sales opportunities for blank. According to Kelley Blue book EV sales in the U S grew 11.

Speaker Change: Employees customers and constituents.

Speaker Change: For the last several quarters as promised we have focused on optimizing blink to establishing systems and processes to ensure that blink is resilient when faced with charging market condition now what was it.

Brendan Jones: Percent year over year in the third quarter and reached record highs in terms of both sales volume and share of the U S. Auto market. An estimated 346000 Evs were sold in Q3 in the U S, which is an increase of 5% from Q2 of 2024.

Speaker Change: <unk> not done our team has made excellent progress towards that goal as evidenced by the significantly reduced cash burn compared with the reduction in compensation and G&A now with that stated I'm now going to pass it onto Mike Battalion, and he will go over some additional details for the third quarter Mike.

Brendan Jones: Globally E vs accounted for 898, 9% of all new car sales in the third quarter up from our previous high of seven eight in Q3 of 2023.

Mike Battalion: Great. Thanks, Brendan I'll.

Mike Battalion: Let's start with our operational results for this quarter. So on slide eight you can see that cumulatively as of the end of Q3 of 2024 blank has contracted sold are deployed over 105000 charter since the company's inception with 76% of these deployed in North America.

Brendan Jones: With this promising EV industry data, we are energized about capturing the school a corresponding potential demand for EV charging infrastructure as clients look to provide charging services for their growing fleets employees customers and constituents.

Mike Battalion: As Brendan mentioned in this quarter alone, we added 6978 contracted sold or deploy chargers to our cumulative number what's.

Brendan Jones: For the last several quarters as promised we have focused on optimizing blank to establish the systems and processes to ensure that blink is resilient when faced with charging market condition now what one of the jobs not done our team has made excellent progress towards that goal.

Mike Battalion: Whats important to mention here is that not all of these contracted chargers have been recognized into revenues yet due to revenue recognition rules. So a portion of the contracted charges will be reflected in product revenues in future quarters.

Brendan Jones: Evidenced by the significantly reduced cash burn compared with a reduction in compensation and G&A now with that stated I'm now going to pass it onto Mike Battalion, and he will go over some additional details for the third quarter Mike.

Furthermore, on slide nine we continue to take advantage of our scale and geographical presence to grow our pipeline.

Mike Battalion: According to the U S Department of energy Blink is the third largest charging network in the United States. We are also one of the leading providers in Western Europe.

Mike Battalion: Yeah, great. Thanks Brendan.

Mike Battalion: Let's start with our operational results for this quarter.

Mike Battalion: So on slide eight you can see that cumulatively as of the end of Q3 of 2024 blank has contracted sold are deployed over 105000 charter since the company's inception with 76% of these deployed in North America.

Mike Battalion: And we believe that as the number of Evs grow so will the demand for points charters in network services and so far we're seeing encouraging news from auto Oems for example, Tesla recently reported that it expects 2025 sales growth of more than 20%.

Speaker Change: As Brendan mentioned in this quarter alone, we added 6978 contracted sold or deploy chargers to our cumulative number.

Mike Battalion: Significant considering Tesla represents about half of EV market share in the U S and Tesla drivers represent our number one population plugging into Blink charging stations on a similar note General Motors has reported that it was finally, reaching scale on EV production.

Speaker Change: What's important to mention here is that not all of these contracted chargers have been recognized into revenue yet due to revenue recognition rules. So a portion of the contracted charges will be reflected in product revenues in future quarters.

Mike Battalion: GM is now America second best selling <unk> brand behind Tesla with acuity Q3 deliveries up 60% year over year and further an increasing number of affordable pre owned Evs are also making their way onto U S and European streets.

Speaker Change: Furthermore, on slide nine we continued to take advantage of our scale and geographical presence to grow our pipeline.

Speaker Change: According to the U S Department of Energy Blake is the third largest charging networks in the United States. We are also one of the leading providers in Western Europe.

Speaker Change: So on slide 10, we continue to offer a full suite of.

Hardware network and support products and services that reflect our core competency of vertical integration capabilities are blinking manufactured two 7% Chargers are our best selling level two models, which are produced here in the USA at our Bowie, Maryland production facility.

Speaker Change: And we believe that as the number of Evs grow so will the demand for blades charters in network services and so far we're seeing encouraging news from auto Oems for example, Tesla recently reported that it expects 2025 sales growth up more than 20%.

We have one of the newest networks in the industry that was built on micro services Tech stack that is very adaptable to our fleet customers and our service and warranty offerings increased uptime and improved experiences for our customers and hosts.

Speaker Change: Significant considering Tesla represents about half of EV market share in the U S and Tesla drivers represent our number one population plugging into Blake charging stations on a similar note General Motors has reported that it was finally, reaching scale on EV production.

Speaker Change: Now if we move over to slide 11, you can see a representative group of our customer base, including many recognizable names across multiple vertical markets and as we've said before we deploy the right track.

Speaker Change: <unk> is now America's second best selling easy brand behind Tesla with Q2, Q3 deliveries up 60% year over year and further an increasing number of affordable pre ltvs are also making their way onto the U S and European streets.

Speaker Change: At the right place at the right time.

Speaker Change: And to that end turning to slide 12 during the third quarter, we announced our collaboration with works to enhance the integration of EV charging into make synergy.

Speaker Change: So on slide 10, we continue to offer a full suite of.

Speaker Change: Hardware network and support products and services that reflect our core competency of vertical integration capabilities are blinking manufactured series seven and eight Chargers are our best selling level two models, which are produced here in the USA at our Bowie, Maryland production facility.

Speaker Change: Synergy fleets. This initiative will improve sleep management as commercial drivers will experience enhanced access to dependable inconvenient EV charging solutions as western services are accepted at 95% of retail fuel locations nationwide.

Speaker Change: Additionally, we formed a strategic alliance with create energy to establish a one stop shop for innovative grid management products that utilize things like solar and battery storage into charging deployments.

Speaker Change: We have one of the newest networks in the industry that was built on Micros services Tech stack that is very adaptable to our fleet customers and our service and warranty offerings increased uptime and improved experiences for our customers and hosts.

Speaker Change: And following the close of the quarter.

Speaker Change: <unk> was awarded a $2 million grant by the state of Illinois.

For the deployment of our owned and operated EV level to a DC fast Chargers.

Speaker Change: And our subsidiary envoy technologies, a provider of car sharing services and community based electric vehicles teamed with unlimited real estate group to bring car sharing at Fiat House, a new collection of luxury residences in New Jersey.

Speaker Change: And to that end turning to slide 12 during the third quarter, we announced our collaboration with works to enhance the integration of EV charging it's a mixed synergy suites. This initiative will improve sleep management as commercial drivers will experience enhanced access to dependable inconvenient EV charging solutions.

Speaker Change: Envoy also introduced the option for lucid ltvs as part of its broader car share program.

Speaker Change: Finally, a few days ago, we announced the establishment of a 100 million pound special purpose vehicle in the U K. So the deployment of brink charging infrastructure in conjunction with U K government Levy incentive funds. So Larry is very similar to the U S Navy program.

Speaker Change: As Western services are accepted at 95% of retail fuel locations nationwide.

Speaker Change: We see this as a tremendous opportunity to grow our business in the UK and Europe and eventually in the U S and the United Kingdom, We started to make progress on acquiring Levy funded contracts for example, the West West Yorkshire combined authority ranked link as number one out of 25 applicants, which we're certainly very proud of.

Speaker Change: And following the close of the quarter Blake was awarded a $2 million grant by the state of Illinois for the for the deployment of our owned and operated E V level to a DC fast Chargers and our subsidiary envoy technologies, a provider of car sharing services and community based electric vehicles teamed with unlimited real estate.

Speaker Change: So we made a great deal of business development progress this quarter, and we continue to aggressively pursue contracts and strategic partnerships to enhance our market position.

Speaker Change: Group to bring car sharing at Fiat House.

Speaker Change: And I'd also like to discuss the efforts we've taken to restructure blank and are continuously evolving market.

Speaker Change: New collection of luxury residences in New Jersey.

Speaker Change: <unk> also introduced the option for lucid ltvs as part of its broader car share program.

Speaker Change: <unk> just started this year, we established and communicated our companywide optimization and process improvement strategy and we've been executing on these initiatives throughout the year.

Speaker Change: Finally, a few days ago, we announced the establishment of a 100 million pounds special purpose vehicle in the U K. So the deployment appoint charging infrastructure in conjunction with U K government Levy incentive funds. So Larry is very similar to the U S. Navy program, we see this as a tremendous.

Speaker Change: Key indicator of our successful efforts is our cash burn rate, which excluding any financing activities in the first nine months of the year was reduced by 54.

Speaker Change: The $45 million that is a reduction of 50% over the same period last year.

Speaker Change: The opportunity to grow our business in the UK and Europe and eventually in the U S. In the United Kingdom, We started to make progress on acquiring Levy funded contracts for example, the West West Yorkshire combined authority ranked linkous number one out of 25 applicants, which we're certainly very proud of.

Said differently, we have reduced our year to date cash burn by half.

Speaker Change: Another TPI related to our optimization efforts as our improved total operating expenses, which saw a 22% year to date reduction excluding noncash impairment charges. The key drivers of this improvement were 37% reduction in compensation expenses and a 10% reduction in G&A expenses.

Speaker Change: So we made a great deal of business development progress this quarter, and we continue to aggressively pursue contracts and strategic partnerships to enhance our market position.

Speaker Change: But we're not done yet so in September we announced planned cost reduction activities designed to further position <unk> for both short term and long term success. These actions anticipate reducing global personnel count by 14%, which is expected to be completed during the first quarter of 2025.

Speaker Change: And I'd also like to discuss the efforts we've taken to restructure blank and are continuously evolving market.

Speaker Change: Before the start of this year, we established and communicated our companywide optimization and process improvement strategy and we've been executing on these initiatives throughout the year.

Speaker Change: We anticipate that this action will result in annualized savings of about $9 million.

Speaker Change: A key indicator of our successful efforts is our cash burn rate, which excluding any financing activities in the first nine months of the year was reduced by 54 excuse.

Speaker Change: We are also proactive in deploying new and innovative ways to increase revenue and further reduce costs. For example were very excited about our cooperative agreement with stable auto to employ their artificial intelligence and machine learning technology to improve utilization and efficiencies among our existing Blanco.

Speaker Change: Excuse me $45 million that is a reduction of 50% over the same period last year said differently, we've reduced our year to date cash burn bright path.

Speaker Change: Stations and future deployments and the potential benefits are impressive for example is AI predict substantial upticks in demand and utilization, we will enhance revenue opportunities through competitive pricing or increased throughput by adding high power DC fast Chargers to those sites. The model has already proved.

Speaker Change: Effective by increasing our revenue across more than 60 locations to date.

Speaker Change: And as Brendan said earlier, we've been disciplined in our approach to adopting practices and processes that will improve links agility in responding to changes in our industry and markets.

Speaker Change: We anticipate that this action will result in an annualized savings of about $9 million.

Speaker Change: <unk> made excellent progress to date, and we'll continue to execute on our strategies and priorities that will make blink an even stronger company.

Speaker Change: We are also proactive in deploying new and innovative ways to increase revenue and further reduced costs. For example were very excited about our cooperative agreement with stable auto to employ their artificial intelligence and machine learning technology to improve utilization and efficiencies among our existing Blanco.

Speaker Change: So with that I'll turn it over to Michael Rama, our CFO to go over financial results Michael.

Michael Rama: Thank you, Mike and good afternoon, everyone.

Michael Rama: Turning to slide 15, total revenue third quarter of 2024 was $25 2 million.

Michael Rama: Compared to $43 4 million in the same period 2023.

Speaker Change: Stations and future deployments the potential benefits are impressive.

Product sales in the third quarter of 2020 for $13 4 million compared to $35 1 million in the same period in 2023.

Speaker Change: For example is AI predict substantial upticks in demand and utilization, we will enhance revenue opportunities through competitive pricing or increased throughput by adding high power DC fast Chargers to those sites. The model has already proven effective by increasing our revenue across more than 60 locations to date.

Michael Rama: Third quarter 2000, 22024 service revenue, which consists of charging service revenues network fees and car sharing revenues was $8 8 million an increase of 30%.

Speaker Change: And as Brendan said earlier, we've been disciplined in our approach to adopting practices and processes that will improve blinks agility in responding to changes in our industry and markets.

Michael Rama: First nine months of 2024 service revenue was $25 million, a 35% increase compared with the same period of 2023.

Speaker Change: <unk> made excellent progress to date, and we'll continue to execute on our strategies and priorities that will make blink an even stronger company.

Gross profit for the third quarter of 2024 was $9 $1 million or 36%.

Speaker Change: So with that I'll turn it over to Michael Rama, our CFO to go over financial results Michael.

Michael Rama: Compared to $2012 8 million or 29% for the.

Michael Rama: Thank you, Mike and good afternoon, everyone.

Michael Rama: Same period last year.

Michael Rama: Turning to slide 15 total revenue in the third quarter of 2024 was $25 2 million.

Michael Rama: Gross profit for the first nine months of 2024 was $33 3 million or 35%.

Michael Rama: Compared to $43 4 million in the same period 2023.

Michael Rama: <unk> to $29 6 million or 30% for the same period last year.

Michael Rama: Product sales in the third quarter of 2020 for $13 4 million compared to $35 1 million in the same period in 2023.

Michael Rama: The increase in Q3, and Q and year to date 2020 for gross margin is primarily due to <unk> shift in product mix towards <unk> charges when compared to 2023.

Michael Rama: Third quarter 2000, 22024 service revenue, which consists of charging service revenues network fees and car sharing revenues was $8 8 million an increase of 30% for the first nine months of 2024 service revenue was $25 million, a 35% increase compared with the same peer.

Michael Rama: Our blink built LTE charges command, a lower average transaction price than DC fast Chargers, but a higher margin.

Michael Rama: Based on our analysis today, we believe blinked generates the highest GAAP gross margin in the industry among comparable peers and competitors in.

Michael Rama: <unk> of 2023.

Michael Rama: In addition, as Brendan and Mike emphasized earlier on the call. We continued to significantly reduce our total operating expenses.

Michael Rama: Gross profit for the third quarter of 2024 was $9 1 million or 36%.

Michael Rama: Operating expenses in the third quarter of 2024 or $97 3 million compared.

Michael Rama: Compared to $2012 8 million or 29%.

Michael Rama: Compared to $123 3 million in the prior year period operating expenses in the nine months ended September 32024 were $159 $6 million compared to $210 $3 million in the same period.

Michael Rama: Same period last year gross profit for the first nine months of 2024 was $33 3 million or 35%.

Michael Rama: Payers to $29 6 million or 30% for the same period last year, the increase in Q3, and Q and year to date 2020 for gross margin is primarily due to blinks shifts in product mix towards <unk> charges when compared to 2023.

In the prior year.

Michael Rama: Operating expenses in Q3 and year to date include noncash goodwill impairment charges of $69 $1 million.

Michael Rama: Our blink built LTE charges command, a lower average transaction price than DC fast Chargers, but a higher margin.

Michael Rama: It is very important it's very important that I mentioned here that the that the impairment charges are noncash and they do not I repeat I. They do not impact the operations of our business any structure performed excluding these impairment charges from our operator.

Michael Rama: Based on our analysis today, we believe blinked generates the highest GAAP gross margin in the industry among comparable peers and competitors in.

Michael Rama: In addition, as Brendan and Mike emphasized earlier on the call. We continued to significantly reduce our total operating expenses.

Michael Rama: Operating results from the third quarter, our total business operating expenses decreased year over year to $28 2 million.

Michael Rama: Operating expenses in the third quarter of 2020 were $97 3 million compared.

Michael Rama: For the nine months ended September 32024, Blink total operating expenses, excluding noncash impairment charges were $95 million a year to date year over year reduction of $25 $6 million or 22% in comparison with the same period in 2023, our cash.

Michael Rama: Compared to $123 3 million in the prior year period operating expenses in the nine months ended September 32024 were $159 6 million compared to $210 $3 million in the same period.

Cash burn for the third quarter of 2024, excluding financing activities was $10 1 million, a reduction of $3 $6 million or 27% compared to the third quarter of 2023 as mentioned before year to date, we reduced our cash burn by $45 million or 50%.

Michael Rama: In the prior year.

Michael Rama: Operating expenses in Q3 and year to date include noncash goodwill impairment charges of $69 $1 million.

Michael Rama: It is very important it's very important that I mentioned here that the that the impairment charges are noncash and they do not I repeat I, they do not impact the operations of our business any shape or form.

Michael Rama: We view this as the most significant metric in our cost avoidance optimization efforts adjusted EBITDA for the third quarter of 2024 was a loss of $14 million compared to a loss of $11 7 million in the prior year period adjusted.

Michael Rama: Excluding these impairment charges from our operating in our operating results from the third quarter our total.

Michael Rama: <unk> operating expenses decreased year over year to $28 2 million for the nine months ended September 32024 blank total operating expenses, excluding noncash impairment charges were $95 million a year to date year over year reduction of $25 $6 million.

Michael Rama: EBITDA for the first nine months of 2024 was a loss of $38 9 million compared to a loss of $43 million for the same period of 2023.

Earnings per share for the third quarter of 2024 is a loss of 86 per share compared to a loss of $1 74 per share in the prior year period and the nine months ended September 32024 of the earnings per share was a loss of $1 24 per share compared to a loss of $3 <unk> per share.

Michael Rama: Or 22% in comparison with the same period in 2023, our cash burn for the third quarter of 2024, excluding financing activities was $10 1 million a reduction of $3 $6 billion or 27% compared to the third quarter of 2023 as mentioned before year to date.

Michael Rama: <unk> in the same period of the prior year. Please note that the impact of the noncash impairment charges to our goodwill negatively impacted Q3 and year to date earnings per share by 68 and.

Michael Rama: We reduced our cash burn by $45 million or 50%. We view this as the most significant metric in our cost avoidance that optimization efforts adjusted EBITDA for the third quarter of 2024 was a loss of $14 million.

Michael Rama: $1 54.

Michael Rama: Respectively now adjusted earnings per share for the third quarter of 2024 was a loss of <unk> 16.

Michael Rama: Compared to <unk> 16 in the prior year period in the nine months ended September 30 of 2020 for the adjusted earnings per share was a loss of 47 per share compared to a loss of $1 15 per share in the same period of the prior year as for the balance sheet cash and cash equivalents at September <unk>.

Michael Rama: Compared to a loss of $11 7 million in the prior year period.

Michael Rama: Adjusted EBITDA for the first nine months of 2024 was a loss of $38 9 million compared to a loss of $43 million for the same period of 2023.

Michael Rama: Earnings per share for the third quarter of 2024 was a loss of 86 per share compared to a loss of $1 74 per share in the prior year period and the nine months ended September 32024 of the earnings per share was a loss of $1 24 per share compared to a loss of $3 <unk> per share.

<unk> 2024 was $64 6 million compared to $73 9 million at the end of the second quarter of 2020 for.

Speaker Change: This concludes my prepared remarks, I will turn the call back over to Brendan for a few final comments go ahead Brendan.

Brendan Jones: Thanks, Michael.

Michael Rama: In the same period of the prior year. Please note that the impact of the noncash impairment charges to our goodwill negatively impacted Q3 and year to date earnings per share by 68 and.

Brendan Jones: This quarter <unk> continued to deliver on our promise to structurally adjust the company.

Brendan Jones: We continued our shift towards vertical integration and taking advantage of the scale and higher margins.

Michael Rama: $1 50 force risk.

Michael Rama: Respectively now adjusted earnings per share for the third quarter of 2024 was a loss of 16th.

Brendan Jones: The products that are built and manufactured by Blake.

Brendan Jones: We continue to increase reoccurring service revenue by 30% year over year, this quarter and 35% year to date with the service.

Michael Rama: Compared to 16 <unk> in the prior year period in the nine months ended September 30 of 2020 for the adjusted earnings per share was a loss of 47 cents per share compared to a loss of $1 15 per share in the same period of the prior year as for the balance sheet cash and cash equivalents at September.

Brendan Jones: Our revenue representing nearly one third and growing of our total revenue.

Speaker Change: Blake the owned and operated charterer count grew by 28% year over year to enable this shift to higher margin and sustainable service revenue.

Michael Rama: 2024 was $64 6 million compared to $73 $9 million at the end of the second quarter of 2020 for.

Speaker Change: When it comes to product revenues, we transition our product sales from one time lower margin sales to longer term sustainable and more profitable sales as well.

Speaker Change: This concludes my prepared remarks, I can turn the call back over to Brendan for a few final comments go ahead Brendan.

Speaker Change: <unk> respond and adjust to changing market conditions.

Brendan Jones: Thanks, Michael.

Brendan Jones: This quarter. The link has continued to deliver on our promise to structurally adjust the company.

Speaker Change: Our significantly reduced cash burn and focus on continuous improvement combined with revenue enhancement will position blink as they truly prosperous company.

Brendan Jones: We continued our shift towards vertical integration and taking advantage of the scale and higher margins of the products that are built and manufactured by Blake.

Speaker Change: We have what we believe is the best team in the industry and with our vertically integrated go to market model. We believe that Blink is well positioned to drive long term growth and value for our stakeholders.

Brendan Jones: We continue to increase reoccurring service revenue by 30% year over year, this quarter and 35% year to date with service.

Brendan Jones: Revenue, representing nearly one third and growing of our total revenue.

Speaker Change: We'd like to thank our team across the globe, who is implementing our plan and taking care of our customers and we also want to thank our customers and drivers for trusting blink with their charging needs and being part of this transportation and energy Revolution now with that I believe you already too.

Speaker Change: Blake the owned and operated charterer count grew by 28% year over year to enable this shift to higher margin and sustainable service revenue.

Speaker Change: And when it comes to product revenues, we transition our product sales from one time lower margin sales to longer term sustainable and more profitable sales as.

Speaker Change: <unk> engaged in some questions so let's transition to that yes.

Speaker Change: Hey, Hey.

Speaker Change: Before we go into questions I, just want to jump in for a quick moment.

Speaker Change: As we respond and adjust to changing market conditions.

And for everyone on the call.

Speaker Change: Our significantly reduced cash burn and focus on continuous improvement combined with revenue enhancement will position blank as they truly prospers company.

Wanted to acknowledge that today is brendan's last Blink Blink earnings call as he moves toward is very much well deserved retirement at the end of 2025 and while his stay involved as a board member and adviser the entire <unk> team would like to thank him for his leadership during the past five years.

Speaker Change: And Brendan is certainly a well respected expert in the EV and EV charging industries and the company and team here of all benefited immensely from his knowledge and Mentorship, including me personally so.

Speaker Change: We'd like to thank our team across the globe, who is implementing our plan and taking care of our customers and we also want to thank our customers and drivers for trusting blank with their chartering needs and being part of this transportation and energy where evolution now with that I believe you already too.

Speaker Change: Thank you Brendon, we wish you all the best in your retirement and now we can with that we can we can go ahead with questions.

Speaker Change: Certainly at this time, we will be conducting a question and answer session.

If you would like to ask a question. Please press star one on your telephone keypad a.

Speaker Change: We are engaged with some questions so let's transition to that.

A confirmation tone will indicate your line is in the question queue. You May Press Star two if you would like to remove your question from the queue for.

Speaker Change: Yeah, Hey, Hey, Brad before we go into questions I, just want to jump in for a quick moment and for everyone on the call I just wanted to acknowledge that today is brendan's last Blink Blink earnings call as he moves toward is very much well deserved retirement at the end of 2025 and well he'll stay in <unk>.

Speaker Change: For participants using speaker equipment and may be necessary to pick up your handset before pressing the star keys once again Thats star one to ask a question. Please.

Speaker Change: Please hold while we poll for questions.

Speaker Change: <unk> as a board member and adviser the entire billing team, we'd like to thank him for his leadership during the past five years and Brendan is certainly a well respected expert in the EV and EV charging industries and the company and team here of all benefited immensely from his knowledge and Mentorship, including me personally. So thank you Brendan we wish you all the best in your retirement.

Yeah.

Speaker Change: Your first question for today is from Craig Irwin with Roth Capital Partners.

Speaker Change: Good evening and thanks for taking my questions first I should say Brendan it's been a real pleasure to work with you. Good luck in your retirement and Mr. <unk> I'm sure you're going to do a fantastic job as CEO of this company so very happy here.

Speaker Change: And now we can with that we can we can go ahead with questions.

Speaker Change: Certainly at this time, we will be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.

Very happy to have a smooth transition.

Speaker Change: My question is my first question is really I guess, a two part question.

Speaker Change: Can you maybe just update.

Speaker Change: A confirmation tone will indicate your line is in the question queue. You May Press Star two if you would like to remove your question from the queue for.

Speaker Change: Everybody on the mix of level two versus level III Chargers that youre selling and you know.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys once again Thats star one to ask a question. Please.

Speaker Change: The amount of federal subsidies versus state subsidies that have contributed to the sales of these products over the course of the last year.

Yeah. Thanks, Thanks, Craig and thanks for the time works to start so.

Speaker Change: Please hold while we poll for questions.

Speaker Change: Okay.

Speaker Change: Regarding the mix of LTE to <unk>, Let me talk about 2023, just a little bit and then I'll talk about 2024.

Speaker Change: Your first question for today is from Craig Irwin with Roth Capital Partners.

Speaker Change: So 2023 was a very unique year.

Speaker Change: In terms of the markets that we're serving and the single biggest market that wound up being excellent for US was the automotive channel as it related to <unk>.

Speaker Change: Dealer infrastructure programs that were rolled out by the Oems now all of those programs had both an <unk> and an <unk> component to them and it was very heavily weigh.

Speaker Change: My question is my first question is really I guess, a two part question.

Speaker Change: Can you maybe just update them.

Speaker Change: Weighted to L. Three as well so.

Speaker Change: Everybody on the mix of level two versus level III charges that youre selling.

Speaker Change: Our our mix last year was.

Speaker Change: It's not from a from a revenue standpoint, it was actually much much higher on the <unk> side from the unit side. It obviously is still higher on the.

Speaker Change: And you know the amount of federal subsidies versus state subsidies that have contributed to the sales of these products over the course of the last year.

Speaker Change: On the level two side, given the average selling prices.

Speaker Change: Yeah. Thanks, Thanks, Craig and thanks for the words to start so.

Speaker Change: So we had a much larger mix of DC fast Chargers sales last year than we did this year. So when you look at our Q3 and you look at the product sales number.

Speaker Change: Regarding the mix of L. L. Three let me talk about 2023, just a little bit and then I'll talk about 2024.

Speaker Change: That was primarily impacted by lower DC fast charging sales. So the mix of product is actually healthier for <unk> from a margin perspective, because we're selling more <unk>. It's more blinked manufactured product the margins are higher than when we sell a DC fast Chargers.

Speaker Change: So 2023 was a very unique year.

Speaker Change: In terms of the markets that we were serving and the single biggest market that wound up being excellent for US was the automotive channel as it related to.

Speaker Change: Dealer infrastructure programs that were rolled out by the Oems now all of those programs has both an L. Two and an <unk> component to them and it was very heavily weigh.

Speaker Change: But obviously the revenue gets impacted so the challenge before us and what the team is working on is obviously to fill that gap more.

Speaker Change: Weighted to L. Three as well so you know our mix last year was.

Speaker Change: So that we can make.

Make up the full amount and beyond of that revenue now.

Speaker Change: It's not from a from a revenue standpoint, it was actually much much higher on the <unk> side from the unit side. It obviously is still higher on the on.

Speaker Change: Regarding federal and state subsidies.

Speaker Change: One of the I would say strengths of Blink is that we don't heavily rely on federal and state subsidies. So the vast majority of our revenue on a quarterly basis is through what I'll call non <unk>.

Speaker Change: The level two side, given the average selling prices.

Speaker Change: So we had a much larger mix of DC fast Chargers sales last year than we did this year. So when you look at our Q3 and you look at the product sales number.

Supportive channels that are federal and state or nongovernmental.

Speaker Change: Channels so.

Speaker Change: That was primarily impacted by lower DC fast charging sales so that the mix of products is actually healthier for Blake from a margin perspective, because we're selling more L. Two it's more blank manufactured product the margins are higher than when we sell a DC fast Chargers.

Speaker Change: We can follow up and certainly provide a.

Speaker Change: Mix, a number on that but I can tell you, it's pretty it's pretty low.

Speaker Change: Yeah, and just to elaborate a bit for you on that Craig So.

Speaker Change: When we're talking about government programs, we have engaged it right and there has been a few but theyre not the majority.

Speaker Change: But obviously the revenue gets impacted so you know the challenge before us and what the team is working on is obviously to fill that gap more.

Speaker Change: You know, we're going to collect you know somewhere around $7 million next quarter, but that doesn't get counted as revenue.

Speaker Change: So that we can make.

Speaker Change: Make up the full amount and beyond of that revenue now.

Speaker Change: We invested the capital in prior years and last year to put those charges in the ground and different market. Most of them are DC fast Chargers, but we're just going to recapture the rep. The capital we put in and we can't count them as revenue on the books.

Speaker Change: Regarding federal and state subsidies.

One of the I would say strengths of Blake is that we don't heavily rely on federal and state subsidies. So the vast majority of our revenue on a quarterly basis.

Speaker Change: But it does give us a reduced.

Amount of cash we need or additional cash on the books for more capital products, but.

Speaker Change: As through what I'll call non <unk>.

Speaker Change: Supportive channels that are federal and state or nongovernmental.

And we've continued to do well with or without the federal product programs.

Speaker Change: Channels so.

Speaker Change: We can follow up and certainly provide a.

Speaker Change: Excellent. Thank you for that so my next question I guess.

Speaker Change: Mix, a number on that but I can tell you, it's pretty it's pretty low.

Speaker Change: Yeah, and just to elaborate a bit for you on that Craig. So you know when we're talking.

Speaker Change: Driving around I observed a lot of blinked Chargers in plate in front of places like Dunkin Donuts and Starbucks shrank.

Speaker Change: Talking about government programs, we have engaged it right and there there's been you know a few but theyre not the majority.

Speaker Change: You know, we're going to collect you know somewhere around $7 million next quarter, but that doesn't get counted as revenue.

They're serving customers in places where people will stop in and wait and maybe just relax for a few minutes as they move about three days.

Speaker Change: You know we invested the capital in prior years and last year to put those chargers in the ground and different market. Most of them are DC fast Chargers, but we're just going to recapture the rep. The capital we put in and we can't count them as revenue on the books, but it does give US you know are reduced.

Speaker Change: Those corporate partnerships seem to be benefiting the development of your network can.

Speaker Change: Can you maybe.

Speaker Change: Talk us through.

The funnel that you've developed over the last couple of years, and whether or not political changes are likely to impact.

Speaker Change: The amount of cash we need or additional cash on the books for more capital products, but.

Speaker Change: The commitment of these different corporation.

Speaker Change: Different.

Speaker Change: And we continued to do well with or without the federal product programs.

Speaker Change: Obviously not government not state entities that have supported the deployment of your products.

Speaker Change: Okay excellent. Thank you for that so my next question I guess.

Speaker Change: Yes, So Craig are you talking about so I'm going to take the second part of the question first so you're talking specifically about the election change in administration things like that.

Speaker Change: You know I.

Speaker Change: Driving around I observed a lot of blinked Chargers in plate in front of places like Dunkin' Donuts.

Well no what I'm, what I'm pointing to is it.

Speaker Change: Hey, there's a lot of brands out there that you may or may not have announced.

Speaker Change: And and Starbucks right.

Speaker Change: But we see the new brink product installed outside right and these corporate entities have.

Speaker Change: They're serving customers in places where people will stop in and wait and maybe just relax for a few minutes as they move about four days.

Speaker Change: Long term mandates for environmental.

Speaker Change: Those corporate partnerships seem to be benefiting the development of your network can.

Speaker Change: For responsibility that our unimpeded by the by the changes are anticipated changes in D C.

Speaker Change: Can you maybe.

Speaker Change: And we can see them continuing to be actually very good customers sure going forward. So can you maybe just elaborate on that and talk a little bit about the breadth of customers that you're reaching them.

Speaker Change: Talk us through.

Speaker Change: The funnel that you have developed over the last couple of years and whether or not political changes are likely to impact the commitment of these different corporations. These.

Speaker Change: And whether or not the number of those customers and adoption rates are actually growth.

Speaker Change: Different.

Speaker Change: Over the next.

Speaker Change: Obviously not government not state entities that have supported the deployment of your products.

Speaker Change: Orders in years, yes, Okay got it so.

Speaker Change: First of all.

Speaker Change: Our.

Speaker Change: Yes, So Craig are you talking about so I'm going to take the second part of the question first so you're talking specifically about the election changed administration things like that.

Speaker Change: What I'm, what I'm pointing to is it.

Speaker Change: And the business development team, specifically is dedicated to exactly what youre talking about so we identify the vertical markets that we believe are strong.

Speaker Change: Hey, there's a lot of brands out there that you may or may not have announced.

Speaker Change: You know, we see the new link product installed outside right.

Speaker Change: And these are corporate entities have a long term mandates for.

Speaker Change: Our strong areas for EV charging and we have a strategic account plan and obviously the business development team goes after those so.

Speaker Change: Environmental responsibility that our unimpeded by the by the changes are anticipated changes in D. C. And you know we can see them continuing to be actually very good customers sure going forward. So can you maybe just elaborate on that and talk a little bit about the breadth of customers that you're reaching them and whether or not the number of those.

Speaker Change: Whether it is a big hotel chains or.

Speaker Change: Whether it is C stores like it like you've kind of pointed out and retail like Dunkin' Donuts and things like that so we have an existing book of business that is really quite strong in terms of the logos and we have obviously had that up on the up on the screen during the during the presentation.

Speaker Change: Customers and adoption rates are actually growth over the next quarter.

Speaker Change: Quarters and years, yes, Okay got it so first of all.

Speaker Change: So our objective is to do more with our existing customer base at the same time that we're looking for opportunities to expand.

Speaker Change: Not to go into too much detail, but our sales team is kind of structured in two different ways. One is we have a dedicated business development team and then we have a territory sales team and the business development team specifically is dedicated to exactly what you're talking about so we identify the.

Speaker Change: Into large scale organizations. So our objective is always to approach.

Speaker Change: A brand that has that really has a strong footprint around the country and then present to them our multiple business models that.

Speaker Change: Markets that we believe are strong.

Speaker Change: Our strong areas for EV charging and we have a strategic account plan and obviously the business development team goes after those so you know whether it is a big hotel chains or whether it is C stores like like you've kind of pointed out and retail like Dunkin' Donuts and things like that so we haven't.

Speaker Change: Whatever it is they're looking to do now one of the things that's been really encouraging for us this year.

Speaker Change: Is the increased number of DC fast Chargers that we've deployed under our owner operator model. So we've always historically been.

Speaker Change: A level two focused company with owner operator charters and we will continue to be focused in that area, but we have a pretty substantial core number of charging stations right now on the DC side that we're very encouraged by the results and you mentioned Dunkin' Donuts actually a great example of.

Speaker Change: Existing book of business that is really quite strong in terms of the logos and we have obviously had that up on the up on the screen during the during the presentation and so our objective is to do more with our existing customer base at the same time that we're looking for opportunities.

We have a few stores with DC fast Chargers, Dunkin' and they're doing really really well. So our pipeline continues to grow among those larger corporate accounts at the same time that our territory sales teams are looking for those more local opportunities.

Speaker Change: To expand.

Speaker Change: Into large scale organizations. So our objective is always to approach.

Speaker Change: A brand that has that really has a strong footprint around the country and then present to them our multiple business models that.

Speaker Change: In their own their areas.

Speaker Change: Yes, So let me if I may add a couple of comments to that because I think it's a great question Craig.

Speaker Change: At whatever it is they're looking to do.

When we look at what we call additionality and that's the existing base of customers. We have today, we had last year and we keep growing into the future.

Speaker Change: Now one of the things that's been really encouraging for us this year.

Speaker Change: Is the increased number of DC fast Chargers that we've deployed under our owner operator model. So we've always historically been.

Speaker Change: Theres definitely was an impact this year as it related to.

Speaker Change: The declines we saw in EV vehicle sales that started in late Q1, we're definitely prevalent in Q2 for sure because that was decreased sales year over year.

Speaker Change: And what happens with the commercial side is different from the residential side, there's a bit of a lag effect when they start seeing the news that EV sales are increasing and they're much more resident to then engage in more commercial contracts to add to their.

Speaker Change: We have a few stores with DC fast Chargers, Dunkin' and they're doing really really well so our pipeline continues to grow.

Speaker Change: Those larger corporate accounts at the same time that our territory sales teams are looking for those more local opportunities.

Speaker Change: The amount of charges they have at their workplace at their retail locations.

Speaker Change: In their own their areas.

Speaker Change: Yeah. So let me if I may add a couple of comments to that because I think it's a great question Craig.

Speaker Change: Along the highway et cetera. So that's why it's really really important right now that Blink is on point as all the good news happens right now around sales and the projections because youre going to see an uptick in the installation of commercial charges, which is our sweet spot, we do in home Chargers, but even home Cha.

Speaker Change: You know when we look at what we call additionality and that's the existing base of customers. We have today, we had last year and we keep growing into the future.

Speaker Change: You know, there's definitely was an impact this year as it related to you know the declines we saw in EV vehicle sales that started in late Q1, we're definitely prevalent in Q2 for sure because that was decreased sales year over year and what happened.

Speaker Change: <unk>.

Speaker Change: The margin is much looser, that's more of a direct impact when you sell the car and then you see an increase in home commercial and waits for the units.

Speaker Change: Operator increase it looks at the sales trend then you know our customers and clients. They say, okay, we need to add charters or we need new Chargers and that's what we're expecting now as we move forward.

Speaker Change: And with the commercial side is different from the residential side, there's a bit of a lag effect when they start seeing the news that EV sales are increasing they're much more resident to then engage in more commercial contracts to add to their the the amount of Chargers they have at their workplace at their retail locations.

Perfect Perfect last question, if I may is around is around cash.

Speaker Change: You've got about 65 on the balance sheet and you guys have made huge progress. This year in your release, you say a $45 million reduction in.

Speaker Change: You know along the highway et cetera. So that's why it's really really important right now that blank is on point as all the good news happens right now around sales and the projections because youre going to see an uptick in the installation of commercial charges, which is our sweet spot we do in home Chargers, but.

In cash use this year versus last year.

Speaker Change: Can you maybe talk us through the key things for us for everyone to look at.

Speaker Change: As we look at the continued progress you make on.

Speaker Change: Reducing cash needs.

Speaker Change: The end of the year and over the next few quarters.

Speaker Change: Yes, so Craig.

Home Chargers.

Speaker Change: The margin is much lute looser, that's more of a direct impact when you sell the car and then you see an increase in home commercial it waits for the units to operate to increase it looks at the sales trend then you know our customers and clients. They say, okay, we need to add charters or we need new charters and that.

Michael Rama: Michael Rama mentioned we.

Michael Rama: We burned about $9 million in cash in Q3, which was.

Michael Rama: Down significantly not not just from last year, but.

Prior quarters and that was a.

A result of really the cost reduction and aggressive cost reduction actions that we employed and they came from two areas. One was compensation expense, which was down 37% and other G&A expenses, which were down 10%. So when you look at our $9 million cash burn and you look at the cash that we have on hand, we haven't.

Speaker Change: That's what we're expecting now as we move forward.

Speaker Change: Perfect Perfect last question, if I may is around is around cash.

Speaker Change: You've got about 65 on the balance sheet and you guys have made huge progress. This year I know in your release, you say a $45 million reduction.

Michael Rama: Nice runway ahead of us that we don't have to.

Speaker Change: In cash use this year versus last year.

Michael Rama: Capital markets for any for any capital in the short run so we feel pretty good about about where we are and the good news is that we have options. We have options in the future should we need it should we need to raise more capital.

Speaker Change: Can you maybe talk us through the key things for us for everyone to look at.

Speaker Change: We look at the the continued progress you make on a you know reducing cash needs to the end of the year and over the next few quarters.

Speaker Change: Excellent well I'll say congratulations on the gross margins that really is a bright spot and it points to you guys are showing discipline in the market. Thanks for taking my questions.

Speaker Change: Yeah, So Craig.

Speaker Change: As Michael Rama mentioned, we.

Speaker Change: We burned about 9 million in cash in Q3, which was down.

Speaker Change: Down significantly not not just from last year, but up from prior quarters and that was a result of you know really the cost reduction and aggressive cost reduction actions that we employed and they they came from two areas and one was compensation expense, which was down 37% and other G&A expenses, which were down 10%. So when you.

Speaker Change: Your next question is from Sameer Joshi with H C Wainwright.

Speaker Change: Hey, good afternoon, and Brendan thanks.

Brendan Jones: All you have done for the company.

Speaker Change: This has been good to work with you.

Brendan Jones:

Brendan Jones: And of course, Mike welcome to the noodles.

Speaker Change: You look at our $9 million cash burn and you look at the cash that we have on hand, we have a nice runway ahead of us that we don't have to.

Brendan Jones: I just have a question two questions.

Brendan Jones: The announcement on the actual true.

Speaker Change: 100 million pound.

Speaker Change: <unk> being set up.

Speaker Change: Capital markets for any for any capital in the short run so we feel pretty good about about where we are and the good news is that we have options we have options in the future.

Can you just explain a little bit.

Speaker Change: It will work and.

Speaker Change: Is there a way or is there a chance that you would do something like that in other geographies.

Speaker Change: We need to should we need to raise more capital.

Speaker Change: Oh yeah.

Speaker Change: Yeah. So thanks, Amir so all I'll start and then.

Speaker Change: Well, Michael Rama to jump in anyway. So this SPV with Axel trove is an off balance sheet.

Speaker Change: Your next question is from Sameer Joshi with H C Wainwright.

Speaker Change: Legal entity that is funded a couple of different ways in this instance.

Speaker Change: Hey, good afternoon, and Brendan thanks.

Speaker Change: It has it has its purpose is to support the Levy program in the U K and again as I kind of briefly mentioned in the comments that the Levy program in the UK is very very similar to the <unk> program in the U S. So there are there is funding that is coming from levy, which will populate the SPV and then.

Speaker Change: For all you've done for the company. It has been good to work with you.

Speaker Change: And of course, Mike welcome.

Speaker Change: Neutral.

Speaker Change: Hum.

Speaker Change: I just have a question two questions the announcement on the actual true Oh.

Speaker Change: An axle trover and investors will fund the balance and then it gives us the ability to sell charging stations into the SPV recognize that revenue and then also to recognize ongoing network services things like.

Speaker Change: The 100 million pound.

Speaker Change: SB me being set up.

Speaker Change: Can you just explain a little bit it was it will work and.

Speaker Change: Is there a way or is there a chance that you would do something like that in other geographies.

Speaker Change: Yeah. So thanks Amir so all I'll start and then allow Michael walnuts to jump in anyway. So this SPV with actual trove is an off balance sheet.

Speaker Change: That.

Speaker Change: Potentially some revenue from utilization things like that so.

Michael Rama: Michael anything to add to that.

Michael Rama: I would also add that you know obviously this is.

Speaker Change: Legal entity that is funded a couple of different ways in this instance.

Speaker Change: We're using this program to kick it off we're evaluating other opportunities within Europe as well as seeing how this could play out in the U S as well so.

Speaker Change: You know kind of a test pilot wanted to see how this runs through but I think it is.

Additional way to finance with no dilution and <unk>.

Speaker Change: And being able to still recognize like I said, the revenues and build on.

Speaker Change: And minimize the risk if you will.

Speaker Change: And actual trover and investors will fund the balance and then it gives us the ability to sell charging stations into the SPV recognize that revenue and then also to recognize ongoing network services things like.

Speaker Change: Right right. So the SBB will be the owner operator of this.

Speaker Change: Yeah.

Speaker Change: I think it will be.

Speaker Change: Just a quick follow up.

Speaker Change: Is there any option for financing our customers buy.

Speaker Change: And installed the systems or this is purely for the SPV financing.

Speaker Change: That.

Speaker Change: Potentially some revenue from utilization things like that so.

Speaker Change: Owner an owner.

Speaker Change: Great their modeling.

Michael Rama: Michael anything to add to that.

So in this initial SPD.

Michael Rama: I would also add that you know obviously this is a.

So the cadence of the owner operator model.

Speaker Change: We're using.

Speaker Change: For it.

This program to kick it off where we are.

Selling into the STB and then running.

Speaker Change: Valuation other opportunities within Europe, as well as seeing how this could play out in the U S as well so.

Running this program with lending, but it certainly could be.

Speaker Change: In future Spv's, it certainly can be used.

Speaker Change: Kind of a test pilot and wanted to see how this runs through but I think it's.

Speaker Change: To what you said.

Speaker Change: It is just no way to finance with no dilution and.

Speaker Change: Right right.

Speaker Change: Okay. Thanks for that.

Speaker Change: And being able to still recognize like I said, the revenues and build on it.

For the.

Speaker Change: Outlook for the year.

Speaker Change: Sure.

Speaker Change: There's a $10 million delta which implies.

Speaker Change: And minimize the risk if you will.

Speaker Change: Right right. So the SBB will be the owner operator of this.

Speaker Change: Fourth quarter 10 million Delta.

Speaker Change: What are some of the puts and takes are backward make it go to the lower end versus the high end.

Speaker Change: Yeah.

Speaker Change: B W.

Speaker Change: A quick follow up is there is there.

Speaker Change: We'd like to understand what is at play here.

Speaker Change: Any option for financing our customers to buy and install the systems or this is purely for the SPV financing.

Speaker Change: Between the low end to the high end.

Speaker Change: Yes. It is.

Speaker Change: Actually very straightforward Samir is all concentrated in the product sales side. So we see a good trajectory on the owner operator model as we demonstrated in Q3 and really throughout this year.

Boehner on all owner operator model.

Speaker Change: So in this initial SPD will slow the cadence to the owner operator model.

Speaker Change: Our services revenue has increased very very nicely throughout the year, we expect that to continue so the delta as you say is really.

Speaker Change: For.

Speaker Change: Selling into the C D and then running.

Speaker Change: Running this program with Levi, but it certainly could be.

Speaker Change: In future Spv's, it certainly could be used.

Concentrated in the product sales side, we have some opportunities that could swing that to either either end of that range.

Speaker Change: So to what he says.

Speaker Change: Right right.

Speaker Change: Okay. Thanks for that.

Speaker Change: Understood.

Speaker Change: For the.

Speaker Change: And then.

Speaker Change: Outlook for the year.

Speaker Change: Just a quick one on Opex I think.

Speaker Change: There's a 10 million delta which in place.

Speaker Change: We take out the one time charges.

Speaker Change: Fourth quarter than million Delta.

Speaker Change: Opex is sort of sequentially a little bit lower.

Speaker Change: What are some of the puts and takes are backward make it go to the lower end versus the high end just would like to understand what is at play here.

Also compared to the previous two quarters actually.

Speaker Change: What does the operating expense level expected going forward and how should we be looking at it.

Speaker Change: Between the low end to the high end.

Speaker Change: Yeah, it's a it's actually very straightforward Samir is all concentrated in the product sales side. So we see a good trajectory on the owner operator model as we demonstrated in Q3 and really throughout this year.

Michael Rama: Yes, Michael if you want to jump in.

Michael Rama: Yeah, No obviously you know in Q3.

It was sequentially lower in Q3 than the other quarters. We're also however.

Speaker Change: Our services revenue has increased very very nicely throughout the year, we expect that to continue so the delta as you say is really.

Michael Rama: It was mitigated a little bit by some severance and severance accruals that we had a record and paid during the quarter as we announce the cost cutting measures. So they expect expectation is to still continue to see declines or decrypt.

Speaker Change: Concentrated in the product sales side, we have some opportunities that could swing that to either either end of that range.

Michael Rama: Definitely the declines in the operating expenses and we really came out where we talked about a $9 million annual opex savings in the plant. So we expect to see that push through on a on a move forward basis, especially as we enter 2025.

Speaker Change: Understood.

Speaker Change: And then.

Speaker Change: Just a quick one on Opex I think if we take out the one time charges.

Speaker Change: Opex as a sort of sequentially a little bit lower.

Speaker Change: Oh, Okay. So the third quarter also included some of those severance payments as well that is correct yes.

Speaker Change: Also compared to the previous two quarters actually.

Speaker Change: Yes, it did.

Speaker Change: What does the operating expense level expected going forward and how should we be looking at it.

Speaker Change: I would add to that.

Speaker Change: Is.

Speaker Change: We're still executing on some of our priorities so of Michael and Michael.

Speaker Change: Yeah, Michael do you want a job.

Speaker Change: Outlined we saw the.

Michael Rama: Yeah, No obviously you know in Q3.

Speaker Change: The.

Speaker Change: <unk>.

Speaker Change: Overall costs go down and the cash burn go significantly down.

Speaker Change: It was sequentially lower in Q3 than the other quarters. We're also however, it was mitigated a little bit by some severance and severance accruals that we had a record and paid during the quarter as we announce the cost cutting measures. So they expect expectation is to still continue to see declines.

Speaker Change: Then add in those cost savings at the 14% reduction. We then add office everybody lose side of sometimes is the spin of mobility, which is right now on track.

Speaker Change: And then it looks like we're going to be able to execute that.

Speaker Change: Yep.

Speaker Change: Either at the end of December into Q1.

Speaker Change: Definitely the declines in the operating expenses and we really came out where we talked about a 9 million annual opex savings in the plant. So we expect to see that pushed through on a on a move forward basis, especially as we enter 2025.

Speaker Change: That takes some additional.

Speaker Change: The amount.

Speaker Change: The amount of expenses off the books as well. So we have other activities. We also have additional synergies that we still haven't closed down on.

Speaker Change: Oh, Okay. So so the third quarter also included some of those severance payments as well that is correct. Yes, yes. It did I would add to that.

Speaker Change: That you know.

Speaker Change: It takes a long time to combine six companies, we're almost done with it but there's still some opportunities there.

Speaker Change: When we look at this topic it really it is about how do you establish a culture of continuous improvement.

Speaker Change: Yes.

Speaker Change: We're still executing on some of our priorities so of Michael and Michael.

As we move forward, we look for more efficient systems more efficient ways to do business more global and our mentality to cut costs and cut duplication across the board and that emphasis is going to continue well into the future because now we've made it a blink it's part of our culture.

Speaker Change: As outlined so you know we saw the.

Speaker Change: <unk>.

Speaker Change: Overall costs go down and the cash burn go significantly down. We then add in those cost savings at the 14% reduction. We then add office everybody lose side of sometimes is the spin of mobility, which is right now on track.

Speaker Change: Our identity.

Speaker Change: Now you got a bounce back and you got to enhance revenue simultaneously or the equation doesn't work and we're certainly working on both.

Speaker Change: And then it looks like we're going to be able to execute that either at the end of December into Q1.

Speaker Change: That takes some additional.

Speaker Change: Understood.

Speaker Change: Thanks, a lot for taking my questions.

Amount of expenses off the books as well. So you know we have other activities. We also have additional synergies that we still haven't closed down on.

Speaker Change: And good luck.

Thank you.

Speaker Change: Your next question for today is from Kumar <unk> with Stifel.

Speaker Change: That.

Speaker Change: You know it takes a long time to combine six companies, we're almost done with it but there's still some opportunities there.

Speaker Change: Hey, Thanks for the question broadly on here on for Stephen Chin Girl instead.

Speaker Change: I just had a quick question surrounding trying to get a better sense of product margins.

Speaker Change: When we look at this topic it really it is about how do you establish a culture of continuous improvement.

The impact of the new Maryland facility and kind of how we should think about these margins over the next several quarters and then just had a quick follow up after that thanks.

Speaker Change: As we move forward, we look for more efficient systems more efficient ways to do business more global and our mentality to cut costs and cut duplication across the board and that emphasis is going to continue well into the future because now we've made it a blank it's part of our culture. It's our.

Speaker Change: Yeah. Thanks, Joe Good question so.

Speaker Change: So there's really two elements to this one obviously in the third quarter, we reported 36% gross margins.

Speaker Change: I'm sure, you've probably noticed that or.

Speaker Change: What we have maintained for full year is 33% so.

Speaker Change: Our identity.

Speaker Change: Now you got a bounce back and you gotta enhanced revenue simultaneously or the equation doesn't work and we're certainly working on both.

Speaker Change: We think that there is potentially.

Speaker Change: Some upside to that but as we go into the future, we feel comfortable with where our margin profile sits at the moment. So we feel like we're going to continue to maintain.

Speaker Change: Understood.

Speaker Change: Thanks, a lot putting machines.

Speaker Change: And good luck.

Thank you.

Speaker Change: Your next question for today is from Kumar <unk> with Stifel.

Speaker Change: What we achieved in the third quarter and then we're going to look at Hey, what are some of the margin expansion opportunities and one of them is what I had mentioned in my comments with stable auto and as we get smarter.

Speaker Change: Hey, Thanks for the question, which was around here on for Stephen Chin Girl.

Speaker Change: I just had a quick question surrounding trying to get a better sense of product margins.

Speaker Change: <unk>.

Speaker Change: The impact of the new Maryland facility and kind of how we should think about these margins over the next several quarters and then just had a quick follow up after that thanks.

Speaker Change: Efficiencies in.

Speaker Change: Blink on stations and where are the revenue enhancement opportunities and those translating directly into margin and so there is certainly more things that we can do.

Speaker Change: Yeah.

Speaker Change: Yeah. Thanks, Joe Good question so.

Speaker Change: So there's really two elements to this one obviously in the in the third quarter, we reported 36% gross margins.

Speaker Change: We've actually done a very very good job of pairing down our third party product.

Speaker Change: Third party product sales. So it was very very heavily skewed in the third quarter towards blinked manufactured product and that that will just that will continue so theres, probably a little more room in there.

Speaker Change: I'm sure you probably notice that our.

Speaker Change: What we have maintained for a full year is 33% so.

Speaker Change: We think that there is potentially.

Speaker Change: Some upside to that but as we go into the future, we feel comfortable with where our margin profile sits at the moment. So we feel like we're going to continue to maintain.

Speaker Change: On the product sales side, as we really try to transition away from third party products nearly completely.

Speaker Change: As well as some of those other things I mentioned with like stable auto.

Speaker Change: Thank you.

Speaker Change: What we achieved in the third quarter and then we're gonna look at Hey, what are some of the margin expansion opportunities and one of them is what I had mentioned in my comments with stable auto and as we get smarter about.

Speaker Change: The follow up was I was wondering if you could talk a little bit more about the current charter uptime across the installed base I know a lot of people talk about the charge off time and so I was just kind of curious about the steps you take to ensure uptime remained high.

Speaker Change: Efficiencies in Blanco and stations and where are the revenue enhancement opportunities and those translating directly into margin and so theres certainly more things that we can do.

Yeah, Yeah, great. So there is two aspects to maintaining uptime.

Speaker Change: And it's somewhat unique to blend and that we have a population of Chargers again over 6000.

Speaker Change: We've actually done a very very good job of pairing down our third party product.

Speaker Change: We own and operate directly.

And the.

Speaker Change: Third party product sales. So it's you know it was very very heavily skewed in the third quarter towards blinked manufactured product and that that will just that will continue so theres, probably a little more room in there.

Speaker Change: Responsibility for the upside of those charters falls off blank.

Speaker Change: E Com very proactively service those chargers replacement, whatever we need to do in order to keep them up and running and again, because we own and operate them and because we derive revenue from electricity sales from those Chargers were inherently motivated to keep those up and running so our uptime on point on charters is X.

Speaker Change: On the product sales side as we really try to transition away from third party products are nearly completely.

As well as some of those other things I mentioned with like stable auto.

That makes sense. Thank you.

Speaker Change: The challenge comes when you have a population and this is an industry issue. This is not unique to blink.

Speaker Change: The follow up was I was wondering if you could talk a little bit more about the current charter uptime across the installed base I know a lot of people talk about the charge off time, and so I was just kind of curious about the steps you take to ensure uptime, I guess, where I'm anti <unk>.

Speaker Change: The issue comes when you have a population of charters and its thousands of charters out in the wild so to speak and they are owned by whoever bought them and so while our network and our systems.

Speaker Change: Yeah, Yeah, great. So there's two aspects to maintaining uptime.

Speaker Change: Densify, which of those chargers are up or down the maintenance whatever it might be we can't force a site post.

Speaker Change: And it's somewhat unique to blink and that we have a population of Chargers again over 6000.

Speaker Change: We own and operate directly.

To either fix the charterer or replace a charge and so what we do is we focus our efforts on awareness, we try to be proactive in bringing the situation to that site hosts and providing them options, if theyre not going to invest in keeping that charter up and running.

Speaker Change: And the.

Speaker Change: Responsibility for the upside of those charters falls off blank.

Speaker Change: We can very proactively service those chargers replace them whatever we need to do in order to keep them up and running and again, because we own and operate them because we derive revenue from electricity sales from those Chargers were inherently motivated to keep those up and running so our uptime on point on charters is X.

Speaker Change: Often times, we can provide them an option for bluelinx to take over that charger and if its an appropriate site that passes through our analytical models. We can say you know what will replace the charter for no cost and we will take over the revenue on that charter as well. So that is also a key initiative within the company.

Speaker Change: The challenge comes when you have a population and this is an industry issue. This is not unique to blink.

Speaker Change: The issue comes when you have a population of charters as thousands of charters out in the wild so to speak and they are owned by whoever bought them and so while our network and our systems.

Speaker Change: As to do things like that.

Speaker Change: Got it I appreciate that thanks for the color I'll pass it on.

Your next question is from Noel Parks with Tuohy brothers.

Speaker Change: Densify, which of those chargers are up or down the maintenance whatever it might be we can't force a site closed.

Speaker Change: Hi, good afternoon.

Speaker Change: One general question.

Speaker Change: Thinking about your owner operator model versus.

Speaker Change: To either fix the charterer or replace the charge and so what we do is we focus our efforts on awareness, we try to be proactive in bringing the situation to that site hosts and providing them options if theyre not going to invest in keeping that charters are up and running.

Your other delivery methods.

Speaker Change: Is there.

Speaker Change: An appreciable difference in sales cycle that youre seeing.

Speaker Change: Those types of business.

Speaker Change: Okay.

Speaker Change: Yes, good question.

Speaker Change: Okay.

Speaker Change: Often times, we can provide them an option for blinked to take over that charger and if its an appropriate site that passes through our analytical models. We can say you know what will replace the charterer for no cost and we will take over the revenue on that charter as well. So that is also a key initiative within the company.

Speaker Change: Generally speaking the owner operator model has a shorter sales cycle because whether it is an opportunity through what we call our hybrid model, where we co invest with the site hosts or it's even faster if if through our turnkey model and we're blinked funds.

Speaker Change: As to do things like that.

Speaker Change: The full capex, so it's a bit shorter on the.

Speaker Change: Got it I appreciate that thanks for the color I'll pass it on.

Speaker Change: On the owner operator side versus the sell side.

Speaker Change: Your next question is from Noel Parks with Tuohy brothers.

Speaker Change: Yeah, and I'd only add to that.

You've got what we call site hosts dynamics at play.

Speaker Change: Hi, good afternoon.

Speaker Change: So if we have a big aside notice and he has agreed to buy Chargers right.

Speaker Change: You know one general question.

Speaker Change: Thinking about your owner operator model versus your your other delivery methods.

Speaker Change: And we can ship and those chargers, but it's truly up to the site as well he.

Speaker Change: Is there.

Speaker Change: An appreciable difference in sales cycle that you're seeing between those types of business.

Speaker Change: Engages with his own installation companies if he doesn't use one and get those in the ground and get them in operational and actually decide when he is going to receive the chargers and so that we can we can get.

Speaker Change: Yeah.

Speaker Change: Yeah. Good question.

Speaker Change: Again revenue recognition when it's an owner operated model once we inked the deal with the site hosts agreement with the site, we have complete control to Mike's point, and we can install the chargers and as fast as we can get them permitted installed up and operating and turn them into revenue generators, so that dynamic really shifts on the.

Speaker Change: The full capex, so it's a bit shorter on the.

Speaker Change: Our model and the lead time shifts dramatically.

Speaker Change: On the owner operator side versus the sell side.

Speaker Change: And I'm, just going to add one thing to that because it is actually a good segue.

Speaker Change: Yeah, and I'd only add to that.

Speaker Change: Wanted to just remind everyone that the core of blinked and our stated strategy that we have been consistent with it.

Speaker Change: You know you've got what we call site hosts dynamics at play.

Speaker Change: So if we have a big so I noticed that he has agreed to buy Chargers right.

Is to continue to grow the owner operator aspects of our business. So that it becomes the dominant revenue model for the company and the reason why we want to do that is because that is typically high margin consistent recurring revenue that we believe adds a lot.

Speaker Change: And we can ship and those chargers, but it's truly up to the site as well he engages.

Speaker Change: Value to the company.

Speaker Change: So we're going to continue to move in that direction. In fact, we may continue we're in fact, we may move more aggressively into that.

Speaker Change: In that direction, we will continue to do both but the goal of the company is to move in that direction and it's to continue each year for the revenue mix between owner, operator and sales to tilt more towards the owner operator model.

Speaker Change: Okay.

Speaker Change: Great. Thanks, a lot.

Speaker Change: There appear to be no further questions in queue I would like to turn the floor back to Kelly for closing remarks.

Kelly: Well, thank you Holly and thank you all for joining us today on the call.

Kelly: And for your interest in <unk> charging in the latest quarter that we've reported for.

Kelly: For additional questions or any other request to meet with management or learn more about our products. Our facilities. Please feel free to email us at IR at <unk> charging dot com and we look forward to engaging with you in the future over the coming quarters. Thanks again.

Kelly: Thanks, everybody bye bye.

Speaker Change: This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.

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