Good afternoon everyone and welcome to the Blink Charging Company Second Quarter 2024 Earnings Call. At this time, all participants have been placed on a listen-only mode and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Vitalie Stelea. Sir, the floor is yours.

Thank you, Matthew. Welcome to Blink's second quarter 2024 earnings call. With us today, we have Brendan Jones, President and CEO; Michael Rama, Chief Financial Officer; and Michael Battaglia, our Chief Operating Officer. The discussion today 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 Blink's Investor Relations website. Today's discussions may also include forward-looking statements about our expectations. Actual results may be different from those stated. The most significant factors that could cause actual results to differ are included on Page 2 of the second quarter 2024 earnings deck. Unless otherwise noted, all comparisons are year-over-year. And now regarding our Investor Relations calendar. Blink will attend the J.P. Morgan Automotive Conference on the 8 of August in New York City. Blink will also attend the HC Wainwright Annual Global Investment Conference on the 10 of September in New York City. Our management will be meeting with investors at all of these events. Please also follow our announcements and our website for additional investor events in the future. And now I will turn the call over to Brendan Jones, Blink's President and CEO. Please go ahead, Brendan.

Thanks, Vitalie and good afternoon, everyone and thank you for joining us today to discuss Blink's second quarter's results. So let's just jump into it. Our total company revenue was $33.3 million with service revenue representing about $8 million, or approximately 20% of the total. Service revenue increased in Q2, 15% when compared to the second quarter of 2023. Gross margin in the second quarter was 32.2%. That's in line with our target guidance of 33%. During the quarter, we contracted, sold or deployed 4,106 chargers globally and dispersed nearly 33 gigawatts of energy across all Blink networks. Our total company revenue for the second quarter of 2024 increased when compared to the second quarter of 2023, despite some of the challenging market conditions that we encountered. On our first quarter earnings call, we mentioned that we had seen lower sales bookings in April. That trend persisted throughout the second quarter, primarily driven by a slight slowdown in EV sales. We believe the pressure on EV sales is a short-term factor but nonetheless, expect to see some impact to our revenue as we move through the balance of this year. We are confident, however, about the long-term outlook for the industry and, of course, for Blink. There are several reasons for our optimism. First, we continue to see a gap between the demand for charging and the available infrastructure to service this demand. If we look at data from S&P Global, 40% of all new vehicle model introductions in 2024 and 2025 will be EVs and that is on top of the vehicles already on the market. So 40% is a massive number and we are uniquely positioned as a company to build the infrastructure and provide the network services to meet the increased charging demand by all these vehicle launches. Additionally, we believe that fleets will continue to be a significant contributor to future demand. Fleet operators are beginning to prefer EVs over combustion engine vehicles because they can save 30% on total cost of ownership. This is tremendous savings even for the smallest of fleets. The fact that we now know that rideshare vehicles like Uber and Lyft are switching to EVs and driving up demand for DC and L2 charging is a very good data point and example of what we'll see in the future. Imagine the impact that EVs will have on very sophisticated fleets and the savings that will be delivered to their owners. Looking at the big picture, we are seeing sustainable growth in charging service utilization and some of our peers have been reporting the same trends. Consequently, as EV sales increase, it follows that demand for charging infrastructure will also grow with a higher number of electric commercial vehicles on the road. Blink's ability to close the gap in available charging sites represents a tremendous market and revenue opportunity for the company. And we made great progress in the second quarter this year. To name just a few of our accomplishments. In Europe, our Belgium team won the contract with Decathlon, the world's largest sporting goods retailer, to install, own and operate both L2 and DC fast chargers. This is very exciting for us as we can see ample opportunities for growth with Decathlon. Additionally, as a result of several key commercial contracts already in place in Europe, Blink has begun to expand our presence into Italy and Germany which are very lucrative EV markets. In the U.K., our team collaborated with the U.K.'s largest dedicated parcel delivery company called Evri to provide and install the first EV hub at an important sorting center. Additional sites are planned for the future. Now, if we pivot over to the U.S., our team achieved In Process status for the government FedRAMP certification. Now, In Process status is a designation for service providers who are actively working towards authorization. And when we receive final certification, which is estimated to be in the October, November time frame, Blink will have access as an approved provider to contracting opportunities with the general and service administration clients which opens up the door for thousands of sales. Recently, we became an official vehicle charger and network service provider to the state of New York and we also launched our Blink Care preventive maintenance program that will maximize charger uptime for our customers. If we look at Mexico, we were selected by the official BYD dealership group for EV charging products and services. BYD is an OEM that is gaining global momentum and we view this as a strategic opportunity in Mexico and around the world. As you can see, we are focused on leveraging our strong reputation in the marketplace to position Blink to compete and win in the short and midterm, while also continuing to structurally adjust the company for sustainable long-term growth. And when we look at the long-term market, between the rapid growth of EVs in China, European mandates and incentives that are already in place and the accelerated growth in developed European markets, combined with the need for the U.S. auto industry and American companies in general to stay competitive globally, we believe EVs will represent one of the key segments of global transportation now and well into the future. If you look at Slide 5, McKinsey currently forecasts over 28 million chargers are needed by 2030. And globally, EV infrastructure spending is expected to be about $260 billion by 2030, with about 90-plus percent of those chargers being L2. In fact, as the market matures, we're going to see more of the emphasis being placed on L2 applications. I will comment more on that at the end of the presentation. But right now, to give you some more details, I would like to pass the call to Mike Battaglia, our Chief Operating Officer. Mike?

Great. Thank you, Brendan and good afternoon to everyone on the call today. So I'd like to start by emphasizing that Blink continues to be uniquely positioned in the market as we offer flexible solutions to our customers. Whether they want to purchase equipment from us, combined with network services, or whether they want us to own and operate chargers for them, we can do both and many variations in between which not only positions us well competitively to win business but also provides revenue diversification, evidenced by the fact that nearly 1/4 of our current revenue is derived from recurring service streams. Since we own and operate, we have unique insights into a variety of charging locations which helps us design chargers and software services to anticipate and address our customers' needs. As Brendan mentioned earlier, our Q2 product sales reflected some softness that we mentioned on the first quarter earnings call and we expect to see continued pressure as we move through the back half of the year. That said, based on the visibility of our pipeline and our ability to successfully address the needs of diverse vertical markets, we anticipate order activity will turn around later this year and into 2025. At the same time, our service revenue showed continuous strong growth in the second quarter, making up 24% or nearly 1/4 of total company revenue. That is a 300 basis point improvement from 21% of total revenue in the second quarter a year ago and we continue to expect service revenue to grow as a percentage of our total revenue. For example, charging service revenue has increased by 13% year-over-year. When we look at the total number of owner-operated units by Blink, we had 6,094 units as of June 30, 2024. That is a 25% increase in a span of only 1 year. For the first half of 2024, we generated charging revenue of $10 million from Blink-owned chargers compared to $7.2 million in the first half of 2023. That's a 37% increase year-over-year. And energy dispersed through Blink-owned chargers in the first half of 2024 grew to 8.9 gigawatts, representing 55% growth year-over-year. Notable here is that DC fast chargers are becoming increasingly important within our portfolio of U.S. Blink-owned chargers. The revenue generated from our Blink owned DC fast chargers in the United States in the first half of 2024 increased nearly 8-fold compared with the first half of 2023. That's 8-fold. And with our L2 charging network, we have detailed visibility into high-traffic, profitable locations. We plan to capitalize on these insights by deploying Blink-owned DC fast chargers in a disciplined way so that we meet our return on capital criteria which targets positive station economics within 5 years or less after deployment. Operationally, Blink's gross margin for the second quarter of 2024 was 32%. The slight decrease in gross margin compared with the first quarter of this year was due to a higher mix of third-party manufactured chargers from legacy customers. Upon the launch of our new single port Blink manufactured series product in Q4 of this year, we anticipate a more favorable product mix that takes advantage of our strategy of vertical integration. For the first half of 2024, Blink's gross margin was a robust 34%. Moving on to Slide 8, you can see that cumulatively, as of the end of Q2 of 2024, Blink has contracted, sold or deployed 98,261 chargers since the company's inception. Geographically, 75% of the total company-wide number is attributed to North America and 25% to Europe and other international locations. Further, Blink continues to grow our market share due to our superior products and innovative and flexible business models. According to the U.S. Department of Energy, Blink has the third largest network of chargers in the United States. On Slide 10, the variety of products we offer appeals to a broad and diverse range of customers. Our Series 7 and 8 chargers, which are produced in-house at our Bowie, Maryland production facility, are the most popular Level 2 models among our customers. In short, we offer a full suite of EV charging hardware. Now, if we move on to Slide 11, it shows a representative group of our customer base, including many recognizable names across commercial entities, multifamily complexes, planned communities, health care facilities, fleets, and municipalities around the world, a very diverse customer base. As we've said before, we deploy the right charger at the right place at the right time. And as we continue into 2024, our priorities remain laser-focused on 3 things. Number one, continuing to pursue strategic partnerships in key vertical markets to gain market share. Number two, driving higher-margin software and recurring services revenues by increasing our Blink-owned network footprint and complementary software services. And finally, number three, continuing to manage costs across the business to position Blink for long-term success. Blink has the highest gross margins today among comparative peers and we intend to pursue further margin expansion. So with this, I'll pass the call on to Michael Rama, our Chief Financial Officer.

Thank you, Mike and good afternoon, everyone. Turning to Slide 14. Total revenue in the second quarter of 2024 was $33.3 million, an increase compared to $32.8 million in the second quarter of 2023. Revenue in the first half of 2024 was $70.8 million which is an increase of 30% compared to $54.5 million in the first half of 2023. Product sales in the second quarter of 2024 were $23.6 million compared to $24.6 million in the second quarter of 2023. The first half of 2024 product sales were $51.1 million which is an increase of 25% compared to $41 million in the first half of 2023. Second quarter 2024 service revenue, which consists of charging service revenues, network fees, and car sharing revenues, was $8 million, an increase of 15% compared to the second quarter of 2023. For the first half of 2024, service revenue was $16.2 million, a 38% increase compared with the first half of 2023. The year-over-year growth was primarily driven by greater utilization of our chargers, the increased number of chargers on Blink networks, and revenues associated with our car sharing programs. Gross profit for the second quarter of 2024 was $10.7 million compared to $12.3 million for the same period last year. As a percentage of revenue, gross margin was 32% in the second quarter of 2024. Gross profit for the first half of 2024 was $24.1 million compared to $16.8 million for the same period last year. As a percentage of revenue, gross margin for the first half of 2024 was 34% compared to 31% in the first half of last year. Blink generates the highest gross margin in the industry among comparable peers and competitors. What is more important to emphasize next is the significant progress we have made in reducing our total operating expenses year-over-year. Blink's total operating expenses for the second quarter of 2024 were $31.4 million. That is a 41% reduction when compared with the second quarter of 2023, primarily driven by a 54% reduction in compensation expense and another 24% reduction in G&A expenses. This is the result of disciplined and continuous cost optimization and avoidance actions that we've implemented over the last 6 quarters. We are not done yet and we have additional measures being implemented now. As a result of these actions, our cash burn for the second quarter of 2024, excluding the onetime debt payment, was $12.6 million. Sequentially, that is a 32% and 38% reduction compared to the fourth quarter of 2023 and first quarter of 2024, respectively. On average, we've reduced our cash burn by more than 1/3 compared to our previous 2 quarters sequentially, excluding onetime debt payments. Adjusted EBITDA for the second quarter of 2024 was a loss of $14.7 million, compared to a loss of $13.5 million in the prior year period. Adjusted EBITDA for the first half of 2024 was a loss of $24.9 million compared to a loss of $31.3 million in the first half of 2023. Adjusted EBITDA for the 3 and 6 months ended June 30, 2024, excludes the impact of nonrecurring items such as acquisition-related costs, additional stock-based compensation expense, estimated loss related to underperforming assets of a subsidiary, change in the fair value related to a consideration payable, and onetime nonrecurring expenses. Now, EPS for the second quarter of 2024 was a loss of $0.20 per share compared to a loss of $0.67 per share in the prior year period. EPS for the first half of 2024 was a loss of $0.37 per share compared to a loss of $1.20 per share for the first half of 2023. For the 3 months ended June 30, 2024, the weighted shares outstanding was 101 million shares compared to 61.9 million shares outstanding for the 3 months ended June 30, 2023. Adjusted earnings per share for the second quarter of 2024 was a loss of $0.18 per share compared to a loss of $0.44 per share in the prior year period. Adjusted earnings per share in the first half of 2024 is a loss of $0.31 per share compared to a loss of $0.92 per share in the first half of 2023. Non-GAAP adjusted EPS is defined as adjusted net income or loss which excludes the amortization of intangible assets, acquisition-related costs, estimated loss related to underperforming assets of subsidiary, changes in fair value related to consideration payable and onetime nonrecurring expenses divided by the weighted average shares outstanding. Now, as for the balance sheet, cash and cash equivalents at June 30, 2024 was $73.9 million compared to $93.5 million at the end of the first quarter of 2024. During the second quarter, Blink paid off in full $6.9 billion of notes payable associated with the Envoy acquisition. Currently, we have no such debt obligations on the balance sheet. Now, turning to Slide 15. Here, I would like to revisit the significant decline in our total operating expenses as a percentage of revenue and the progress that we've made over the last 6 quarters. Total operating expenses were 170% of revenue in 2022. In 2024, we have reduced this number by 8,200 basis points which is more than half, demonstrating that our strategy of balancing our expenses while preparing for the future is working. Now this concludes my prepared remarks. I'm going to turn the call back over to Brendan Jones for a few final comments. Go ahead, Brendan.

Thanks, Michael. In the second quarter, Blink experienced growth primarily fueled by profitable and recurring revenue from services. There was some decline in product sales during this period due to the current EV sales environment. The overall EV market saw a slight dip in the first quarter followed by a modest increase in the second quarter, resulting in a flat performance for the first half of 2024. Our total revenue aligns with this trend. For the full year of 2024, Blink is revising its revenue target to between $145 million and $155 million. The company is also updating its timeline for achieving positive adjusted EBITDA to now occur in 2025. We are keeping our gross margin target of around 33%, aided by ongoing improvement initiatives. Highlighting a strong increase in service revenue alongside a significant reduction in expenses this quarter illustrates the resilience of our business model. Our top priority is to continually adapt to future growth demands while remaining agile and responsive to shifting market dynamics. We will continue our synergy efforts, cost-cutting, and avoidance strategies throughout 2024 and beyond. Additionally, we will further our vertical integration strategy by producing high-quality, Buy America compliant chargers at our Maryland facility while leveraging expanded manufacturing capabilities in the U.S. and globally to drive costs down, enhance synergies, and serve our customers worldwide. To recap, during the second quarter, we maintained our market share and expanded our charging network. Despite a temporary decline in EV sales performance, we are undeniably leading the charge in the significant infrastructure development for chargers that will be necessary for decades. Blink ranks as the third largest network in the U.S. with a growing presence in Europe, positioning us well to take advantage of the long-term EV trend. Our extensive product lineup and flexible offerings set us apart in the market, establishing Blink as a premier provider of electric vehicle charging solutions that cater to a diverse range of customers. In the second quarter, we also diversified our product sales by increasing our Level 2 charging equipment offerings. We believe that our strengthened emphasis on services, software solutions, and integration with the broader grid will help us expand our addressable market and boost revenue. Our efforts led to a 41% reduction in operating expenses compared to the second quarter of 2023 as we continue to pursue efficiencies, scale our business, and aim for sustainable adjusted EBITDA profitability. Given our unique vertically integrated model, we are confident that Blink is set for long-term growth and value creation for our stakeholders. We are dedicated to broadening our global charging network and committing to our mission of advancing energy transition through innovative charging solutions. Before concluding the call, I want to highlight that we believe we have built the strongest team in the charging industry. I extend my gratitude to our global team for executing our plan and serving our customers effectively. I also want to thank our customers and drivers for trusting Blink with their charging needs and for joining us in this energy and transportation revolution. Blink’s success is attributed to our team; they listen, learn, and lead in this industry. With that, we are ready to address any questions.

Thank you to our global team for implementing our plan and supporting our customers. I also appreciate our customers and drivers for trusting Blink with their charging needs and for being part of this transportation and energy revolution. Our success is due to our team's ability to listen, learn, and lead in this industry. Now, I think we're ready to take some questions, so I'll hand it over.

Brendan, could you discuss the demand trends throughout the quarter and how things have evolved in recent weeks? I was under the impression that the weakness you mentioned last quarter wasn't as significant as what has occurred since then. Can you tell us if things have worsened since that time, or if we have reached a low point and are experiencing usual demand patterns? Additionally, Bowie, Maryland is a valuable location with key customers who prefer American-made products. However, you indicated that there was a shift towards third-party manufactured products in the quarter. Is there a current market demand for something different? What insights can you provide about the revenue stream and what is influencing volume at this time?

I'm going to start with the last question, then remind me to return to the first question. Regarding product, the change is not in customer demand. Instead, in our fully vertically integrated model, we encountered an issue with what's called a single plug unit. We have a cost-effective dual plug unit that lowers acquisition costs for our customers, but when a single port charger is required, we have traditionally relied on a third-party product. The demand for that has slightly increased, forcing us to use the third party at a lower margin for that specific product, which has been consistent in our history. We are working to phase this out. Our replacement charger, which we are producing either in Bowie, Maryland or sourced globally from our manufacturing facility in India, will take its place. This will help resolve some of the legacy margin issues we currently face. It's important to note that we still maintain best-in-class margins despite this situation. The industry saw first quarter sales at around 73%, much lower than the end of calendar year '23. These numbers improved slightly to just over 8% for Q2 but remained flat overall. We had previously anticipated that industry volume would rise by over 10% in certain indexes. This was primarily a factor in the lower activity and higher volumes in L2 charging, as well as some DC charging, which is an important revenue source for us. In the U.S., political uncertainty and criticism of EVs added to this scenario. However, we see positive trends moving forward. Our customers with active contracts continue into Q4, and some announcements today extend into the first quarter of next year. They may have made some delays, but they are not stepping back, which is very encouraging. We observe a slight rebound in the vehicle market, and OEMs continue to invest in charging and electric vehicles. Hyundai recently announced a significant investment in Taiwan to enhance their component strategy for increased EV sales. While we are currently in a soft spot, we believe this situation will improve. There may be some slowdown in Q3, but we expect the industry to bounce back in Q4 and beyond.

I appreciate the joke. I would really like to discuss the linearity in the quarter and how things are trending after the quarter.

Okay. In terms of which part of the business?

Can you discuss the revenue progression? I realize there's typically a surge at the end of the quarter, but regarding the softness you mentioned, many of us didn't fully anticipate how significant it would be when you last reported. It was early in the quarter, and visibility tends to improve over time. How does the quarter's progression compare to your usual experience? What changes prompted you to adjust your guidance based on the evolving market conditions?

We adjusted our guidance because we did not see the expected strength in the second quarter. Consequently, we had to make that change. However, our numbers show that sales are improving month-over-month. We will not provide quarter-over-quarter guidance at this time. Mike Battaglia, do you have any additional insights on this?

Yes. So as we started off the quarter, we saw that softness and that seemed, to use your term, the linearity of it continued through May and June. As you had pointed out, we always see a bump in the last month of the quarter, and we saw that bump. It just wasn't as strong as we've seen in prior quarters. So that's really primarily what drove it and that's what caused us to adjust the full year.

Understood. Then the 33 gigawatts in network throughput, that's a chunky number. That's a nice growth number and it's nice to see that drive 15% growth in the service revenue. Can you maybe talk a little bit about utilizations across the network? Are there areas of the network maybe where you need to supplement available charge posts? Are there some bright spots out there as far as opportunities for investment, given the strong growth in network throughputs?

So I think I understood the question. If I'm not answering correctly, hit me or Mike or Mike will jump in and answer. So I mean, in terms of the back off in long-term investments, we're not seeing it. We're engaged right now and we'll have some announcements on some pretty lucrative owner-operator deals that we're fully involved in in both the United States and Europe. We're seeing an uptick on a percent of activity. And what we measure by that is we look at revenue coming and it's had this balance about, in Europe, 80%-20%, meaning 80% it's owner-operator and 20% is usually sales. In the U.S. 25% is usually owner-operated and then the rest 75% is sales. What we've witnessed in Q2 is a significant uptick in owner-operator investments. And the good thing for Blink is that fits under what's called our hybrid model. And that's where we pay for the charger, the maintenance, the upkeep, the swapping out of the charger, the site host pays for the installation and then we split the revenue on a 60-40. Right now, that picked up significantly, as Mike indicated in his numbers. The other spot we're going to keep focusing on and where we're seeing growth right now is in multifamily and fleet. So fleet operators aren't slowing down as much. And as you all know, we still have a very lucrative contract with the post office. We can't comment directly on what we'll see in that. But that contract remains in place and we have confirmation that we'll be getting additional orders on that, although the dollar amount and the time frame we're not at liberty to disclose at this time. Michael, any additional color on that? Battaglia, that is.

I've been with Blink for four years, and I've really appreciated how our analytical capabilities keep improving. We're currently focusing on our existing customer base to identify locations that need more chargers. This presents us with a great opportunity. We can either expand chargers at sites we own or take over chargers from hosts who want to add more but may not have the budget. We're exploring both options. Additionally, we're paying more attention to high-utilization DC fast charger sites in a responsible manner. There's definitely room for growth in the owner-operator and high-utilization areas.

And I would only add to that which is really interesting in this space is the advent of AI and our engagement with companies that are focusing on equations that equal higher revenue on a site basis with better station economics, right placement; that is really fascinating to see what those numbers bear out. And we'll have more on that as we move out into additional quarters with our engagement with those types of companies.

Great. Congratulations on a really strong job bringing down the frictional costs. It's impressive. You've got them down so much year-over-year.

Sure. Thanks.

Your next question comes from William Grippin from UBS.

And my first question was just wondering if you could give us an update on where you stand with the Blink Mobility spin-off. I think you had referenced that last quarter.

Yes, that's a great question. We met with the team handling the company's spin-off yesterday. The S-1 filing is nearly complete; we just need to make a few adjustments. Roth is the selected company assisting us with the spin-off. The presentations for the investor roadshow are finished, and we are currently monitoring market feedback regarding the viability of an IPO. Additionally, we're focused on reducing expenses company-wide. There are significant opportunities to lower costs, especially within the BlueLA model. These initiatives are now in progress, and we will provide a timeline update on when we can expect to see those changes reflected in the numbers. While the IPO market isn't strong right now, we remain optimistic about the fundamentals of the spin, especially as we approach the latter part of Q3 and into Q4, anticipating a favorable window for the spin-off. Mr. Rama, do you have any additional insights on this?

No, I think it's the market. We had to look at the market, how it's being perceived and the timing and stuff like that.

Yes.

All right. Appreciate that color. And then just last one for me here. But on the DCFC segment, could you elaborate a bit on how you're thinking about positioning or investing in that part of the market as throughput continues to increase across DCFC networks?

Yes, definitely. Owning and operating DC fast chargers is entirely different. Our approach has been effective for the company, and we don't aim to establish a presence just for the sake of it. Other companies might be doing that, but we won't install a charger unless it has positive financial projections or meets a favorable return on investment. Generally, we aim for a payoff within four years or less. If there's a DC fast charger project with government funding available that we can participate in, we will move forward with it, and we're starting to see some of those opportunities now. Even without grant money, if we identify a project with a strong return, we'll pursue it. Unlike some competitors, we don’t operate on a cost of sale model. Our goal with DC fast chargers is to achieve a return on investment in the short term, typically within four to five years. We're beginning to see positive results in that regard. Last year was very strong for sales of DC fast chargers, but this year is quite different. If you analyze the figures, you'll see we've successfully shifted from relying heavily on DC sales to increased service revenue and L2 sales. We anticipate that DC sales will rebound, primarily in fleet applications and for larger commercial enterprises, along with ongoing developments in highway infrastructure. Our focus for DC installations is now more on owner-operated sites and strategically located chargers in urban areas where people live and use their electric vehicles.

Your next question is coming from Stephen Gengaro from Stifel.

So just curious, when you look at the charging revenue side, can you give us any sense for sort of Tesla versus non-Tesla charging at Blink stations?

Yes. I mean, if we look at plug-ins, right, Tesla still remains our number 1 brand that's plugging in but the percentage is reducing over time. And that's not because there's anything wrong with Tesla. That's because there's more vehicles out there from competitors. So Tesla, especially on the...

Tesla still leads in our charging statistics, but its share is gradually decreasing. This isn't due to any shortcomings on Tesla's part; rather, it's a result of the increasing number of vehicles from other manufacturers.

Say that again.

Oh, no, that was what I was getting at. Are you seeing growth on the non-Tesla side, I guess it's sort of the root of the question.

Yes, the entire industry is experiencing changes. Several OEMs will adapt, and Tesla isn't facing any issues. They need to offer significant incentives because their fleet of EVs is somewhat outdated. With many new models entering the market, competition is intensifying, which is beneficial for the industry as it helps reduce costs. All the data shows that GM, Hyundai, Kia, and BMW have all seen an increase in EV sales, while Tesla's sales have plateaued and, in some instances, declined. This trend is positive. We mentioned that 40% of new vehicle launches will be EVs, and with the growing market competition, we expect Tesla's share to decrease, although it will likely remain the top brand using our stations.

Great. And just a quick one. When you think about just kind of revenue growth as you think about 2025, should we just sort of think about how we're modeling EV adoption and EV sales to kind of use as a proxy, at least in the near term?

Certainly there's a higher correlation between L2 sales on both the in-home and municipal and even to some degree on the fleet level as the total industry volume, whether commercial or privately owned vehicles, there's a correlation there. You can't deny it now. And there's a lag between when that hits and then when it hits the infrastructure company in the revenue, right? However, on the utilization side, there's much more of a direct instant thing. So, our utilization went up over time because those units in operation that were sold throughout 2023 and 2024 are now utilizing our stations and they're finding more. So the more stations we add in the ground and we saw a 4,000 unit increase in this month alone, then the more revenue we're going to get on the utilization side. And you see that bearing out in the numbers. So it's really 2 different things you have to manage. There's that very direct correlation between sales and the selling of product. And then there's an increase, no matter what, because more cars are on the road and that's the unit in operation as opposed to total vehicle sales equation. So UII is driving increased utilization and driving increased revenue for us right now.

Your next question is coming from Sameer Joshi from H.C. Wainwright.

Can you hear me?

Yes.

Yes. Okay. I would like to just dig a little deeper on the car charging revenues actually. It seems like sequentially 1Q to 2Q, they've been relatively flat or slightly down. Are you facing any uptime challenges due to maintenance or any utilization differences or shortcomings? Like, what is the reason for that flat revenue growth?

Yes, there will be some variability in the numbers, primarily where we are upgrading chargers. This includes removing older chargers and replacing some of the initial Blink chargers with newer ones. During the extended maintenance or replacement periods, you will notice changes in the numbers. The goal is to counterbalance this by increasing the number of chargers being added to the network. However, as we remove older legacy chargers, especially those that are not operational or maintained by the site hosts, we will see a decrease in the overall numbers. Mike, do you have any additional insights on this?

No, Brendan, I think you got it.

All right. Okay. And then should we expect maybe in the near term, next 2 to 3 to 4 quarters, a higher revenue mix, revenues coming more from Europe, not relatively but as a proportion year-over-year or just because of the challenges in the U.S.? Or how should we look at that as a revenue stream?

When providing guidance on this topic, I can confidently say that overall utilization is increasing over time. There is some seasonality to it, which we are currently entering. It typically begins at the start of summer, experiences a significant drop in August, and then rebounds for the rest of the year. We anticipate an increase in the percentage of revenue from Europe as part of our total Blink revenue because that is the trend. Europe generally has a higher penetration rate, and as more countries strive to boost their electric vehicle adoption to compete with leaders like Norway, Belgium, the Netherlands, Germany, and the U.K., we do expect that revenue from Europe will improve. I'm not sure if it will reach 50%, but it's certainly going to be better than the current 24%.

Yes. 24%, yes.

Okay, 24% today; we definitely see. Just to clarify, that's on owner-operated revenue, not on sales revenue. Sales revenue will improve over time, but we expect it to keep pace with the U.S., while service revenue will definitely increase in Europe over time.

Understood. And just one last one. On the 2024 operational priority slide, I think during the first quarter there were mentions of implementing SaaS solutions and some energy management solutions development. Have those been like deprioritized? Or how should we look at that?

No, absolutely. How about reemphasized?

Just want to make sure. Yes.

We are indeed adding resources in the U.S., Europe, and our development center near Delhi to ensure timely market delivery. We have established a base package for energy management services and are currently working on enhanced packages. We will provide updates as we progress through the quarters, and we expect to begin launching these products soon. This area is a significant strategic focus for the company, so you will see an increase in resources over time, not a decline.

Our last question comes from Noel Parks from Tuohy Brothers.

How is everything going?

We're good. How are you?

Thanks. I wanted to discuss your comments on multifamily and fleet, which appear to be consistent strong performers in terms of demand across various submarkets. Specifically, regarding commercially owned multifamily, is it that they are frequently in an upgrade or renovation cycle? Similarly, with fleets, is the vehicle retirement cycle a key factor that keeps them focused on capital investments, including the need for EV charging?

Sure. What I'm going to do is let Mike answer this because he lives and breathes that on a daily basis. So, Mike?

Thanks, Brendan. Regarding multifamily, nearly a third of Americans live in apartment buildings, and the percentage is similarly high in Europe, indicating a significant market size. When we analyze fleets, several factors come into play. Firstly, as vehicles age and are retired, there is a noticeable shift toward battery electric vehicles. Secondly, as the market gains experience with battery electric vehicles, it becomes clear that total ownership costs are more favorable. This is largely due to lower maintenance and fuel costs. Additionally, many fleets are striving to achieve carbon reduction goals, further driving demand. Therefore, we have a positive outlook on the fleet market.

Mike, did you want to add to the multifamily dwelling part?

Yes, I touched on it at the beginning but what specifically.

Yes, part of this question was multifamily dwellings.

Yes.

Yes, sure thing. Absolutely. Just the point about the size of the market is helpful.

Yes.

I was wondering about a core aspect of your business that has evolved, particularly through acquisitions. It often comes back to your business model and the flexibility you provide to a diverse range of customers. I hope that this concept remains clear and relevant. Could you share some recent examples of a new, significant potential customer that has approached you and how you navigated through the various business models to achieve their desired outcome for adoption? Mike, do you want to take that?

Yes, thanks, Brendan. So, Noel, we are currently experiencing a situation that serves as a prime example. There are two approaches to this. One is a customer who focuses on electric vehicle charging and realizes that they are not an EV charging company but rather a retailer. They prefer to concentrate on their retail business while allowing us to handle the EV charging aspect. They still benefit from a revenue share in this arrangement. The other approach, which we're seeing more frequently, involves a significant healthcare company in the United States that previously owned their charging stations nationwide. They recognized that they did not want to bear the responsibility of maintenance and uptime because their primary focus is on delivering healthcare, not managing EV charging stations. We are currently in the process of taking over all of their level 2 charging stations across the country. We believe this indicates a growing trend where customers who already have EV charging stations will prefer to outsource management to a provider rather than handle it themselves.

But the thing I'll add to that, to Mike's comment is what's key is we already know from the utilization data of those chargers in health care locations that once we take them over, it's a profitable equation and it's revenue accretive for us. So it's not like we're getting into a bad deal. We're getting into a good deal and we're getting the chargers for free. And that's what a flexible model does for you. It allows clients who've made 1 decision 3 years down the road to pivot to another decision in a seamless way.

Great. And just the last one for me. You talked about preserving gross margin through continuous improvement activities. I wonder if you could just talk a little bit about what some of those recently have been or are planned.

Yes. It's been over a year since we launched our continuous improvement and cost reduction efforts across the company in a focused manner. We began this initiative softly early in 2023 and then expanded it globally to all business units. Now, it's integrated into everyone's daily responsibilities. For example, a member of our tech team, whose main role isn't cost-cutting, identified some vendors and compared them with another vendor to secure better technology at a lower cost. After conducting a comparative analysis and collaborating with purchasing, we achieved annual savings of approximately $300,000 to $350,000 from that effort. These types of initiatives and successes are now widespread throughout the company. We are also addressing several duplicate systems that have a firm sunset schedule set for 2024, which will allow us to eliminate the expenses associated with maintaining those systems. We are systematically phasing them out, having already succeeded in aligning finance systems from the U.S. to Europe, and we are currently working on CMS and network systems. Additionally, we are making strategic decisions to close underperforming business units and have already done so in various countries around the world. It would not be prudent for us to invest more resources into those areas, so we are reallocating those funds to higher GDP countries. We have more updates to share as we progress through the year, but we've already achieved substantial savings; for example, after ceasing operations in one country, we saved $800,000 within a year. These activities will continue company-wide, and this approach has become central to what it means to be a Blink employee, and we will keep enhancing these efforts as we move forward.

Thank you. That concludes our Q&A session. I'll now hand the conference back to Vitalie Stelea for closing remarks. Please go ahead.

We thank you all for joining us on the call and the webcast today and for your interest in Blink Charging. If there are any additional questions or requests to meet with management, please e-mail us at [email protected] and we look forward to engaging with you in the future.

Thanks, everyone.

Thank you. Everyone, this concludes today’s call. You may disconnect at this time and have a wonderful day. Thank you for your participation.