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spk01: Good afternoon and welcome to Blink Charging's third quarter 2022 earnings conference call. All participants are in listen-only mode. There will be an opportunity for analysts to ask questions at the end of today's presentation. If you should need assistance during the conference, please press star zero on your touchtone phone. Please note this conference is being recorded. A replay of this call will be available on the investor relations page of the company's website. At this time, I'd like to turn the presentation over to Vitaly Stilyev, Vice President of Investor Relations. Please go ahead.
spk06: Thank you, Kelly. And welcome, everyone, to Blink's third quarter 2022 earnings call. On this call today, we have Michael DeFarkas, Chairman and Chief Executive Officer, Brendan Jones, President, and Michael Rama, Chief Financial Officer. Today's discussions will include non-GAAP references, These are reconciled to the most comparable US 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 differ from those stated And the most significant factors that could cause actual results to differ are included on page two of the third quarter earnings deck. Unless otherwise noted, all comparisons are year over year. Now, regarding the investor relations calendar, Blink will be hosting investors at the upcoming Consumer Electronics Show, CES, between the 5th of January and the 8th of January of 2023 in Las Vegas. In addition, Blink Management will be participating in the annual Needham Growth Conference in January of 2023. I will now turn the call over to Michael D. Farkas, founder and CEO of Blink Charging. Go ahead, Michael.
spk03: Good afternoon, everyone. Thank you for joining us. As you can see, we delivered an extremely strong third quarter of 2022, highlighted by record revenue of $17.2 million. an increase of 169% over the third quarter of 2021. During the third quarter, our product sales grew by 177%, an increase of $10.8 million compared to Q3 of 2021. Service revenue grew by 123%. Within service revenue, Blink's network fees grew by over 600%. I repeat, over 600%. And this is our recurring revenue model with very, very strong gross margins. Our record third quarter results are reflective of our strong fundamentals driven by organic and strategic opportunities. And the third quarter we contracted sold or deployed 7,834 commercial and residential chargers. an increase of 160% compared to the same quarter of last year. Most of our competitors don't even have that many units on their entire network, let alone deployed last queue. Our success in part is rooted in our ability to fulfill customer orders relatively quickly. Our goal is to establish Blink as a reliable provider of choice, able to comply with our customers' tight deadlines even a world still impacted by supply chain issues. To that end, in Q3, we strategically substantially increased the investment in our inventory levels to ensure that we had the components, equipment, and products on hand to meet current and future customer and market demand. Subsequent to the end of the quarter, we had two major announcements. On October 11th, we announced our all new Blink network and Blink charging mobile apps, completely redesigned from the ground up. It's there to power our next generation best in class EV charging experience. More on that later. And on October 18th, in conjunction with the Secretary of Labor's visit to Blink headquarters, we announced our current plans to increase Blink's U.S. manufacturing capabilities to up to 100,000 chargers per year. Trust for the U.S. We are very excited about these announcements as these are important building blocks in our future success here in the United States and globally. Turning to slide five, Blink has sold, deployed, or installed nearly 59,000 chargers since the inception of the company. We have over 440,000 active users on Blink's networks. a number that has been consistently growing. Blink today has global manufacturing capabilities in the US, India, and Taiwan. And most importantly, our advanced hardware and our networks are compatible with the standards adopted by the majority of countries around the globe. A recent study from McKinsey published in April of this year shows that the United States alone could have 48 million EVs on the road by 2030. And globally, Bloomberg New Energy Finance recently pointed to the need for between 340 million and 490 million chargers by 2040. Remember, the entire global market today has a few million viable chargers deployed at best, and almost 500 million units are estimated to be needed. We view this as a massive growth trend in the marketplace and a tremendous opportunity for Blink. Turn to slide six, please. At Blink, we are dedicated to providing the best in EV charging, and we're proud of the new, completely redesigned Blink network and Blink charging mobile apps. Our state-of-the-art infrastructure, tech stack, and user-centric approach allowed us to create a technology platform that can be augmented quickly and efficiently without disrupting our customers. The mobile apps put EV drivers in control by giving them improved search capabilities for nearby amenities and chargers by zip code, city, business, category, or address, and it seamlessly integrates EV charging into everyday life. Drivers can save favorite charger locations and manage payment information as well as view payment history and real-time charging status. I encourage everyone on this call to experience the new Blink charging apps and network for yourselves, and that's by downloading it at the iOS App Store or the Google Android App Store. On slide seven, when it comes to host benefits, the entire experience has been redesigned with ease of use in mind. The new cloud-based Blink network allows site hosts to manage their EV charging business in multiple languages that include English, French, Greek, Hebrew, and Spanish across 25 countries, with additional languages to be added. Site hosts will also have expanded functionality in creating dynamic pricing protocols responsive to various use cases, locations, and schedules. Our new infrastructure will allow for the faster integration of our recent acquisitions, which we will outline in our next slide. Our legacy businesses currently operate on four separate networks. In the near future, all of our chargers globally will operate on one network. Four networks consolidated to one should translate into major savings and technological innovations. Turning to slide eight. A recap of our recent acquisitions. In June of 2022, we completed the acquisition of Semiconnect, significantly expanding our charging networks in the United States. This provides vertical integration and manufacturing capabilities in the US and globally and allows Blink to comply with Buy American mandates. In April of 2022, we acquired the UK-based Electric Blue, giving us access to the UK and Ireland's fast-growing markets and adding nearly 1,200 chargers to our global footprint. So overall, as you can see, In Q3, we continue to position Blink for significant current and future growth. Our equipment, our new and updated networks and apps will serve as the foundations to launch new services and functionality in the future. With that, I'll turn the call over to Brendan Jones, President of Blink, to discuss some of our recent developments.
spk07: Thank you, Michael, and good afternoon, everyone. If we now go to slide 10, within the last 12 months, Blink has contracted, sold, deployed, or acquired over 30,000 chargers both domestically and internationally, bringing the total charge account for the company to over 58,000 chargers since Blink's inception. We have a diverse mix of deployments in the United States and abroad, with 74% of the total company-wide chargers deployed in North America and 26% deployed internationally. If we now flip to slide 11, this is a partial list of our customers. But as you can see from the logos and verticals we operate in, this speaks to the breadth and depth of our products and services. We've won numerous multi-year contracts with a variety of well-respected commercial enterprises, healthcare facilities, multifamily complexes, planned communities, fleets, and municipalities. We are especially seeing strong demand from fleet customers. In fact, we were selected as a preferred provider by one of the world's largest delivery service companies, which we are very, very excited about. Overall, customers choose Blink because of our flexible business model and superior products. We are the only fully integrated charging provider in the U.S. market. Now, if we go on to slide 12, we had a great visit from U.S. Secretary of Labor Marty Walsh, and we subsequently announced that we are planning to expand our U.S. manufacturing footprint by adding another facility to produce chargers. This new facility is targeting about 10,000 DC fast chargers and approximately 20 to 40,000 L2 chargers per year. Our current target, which includes the approximately 40,000-unit expansion at our Bowie, Maryland facility, allows Blink's annual U.S. charging production capacity to increase to up to 100,000 units. In fact, we've already visited four different potential locations and held discussions with the local municipalities there, and we shared and discussed our plans. In the meantime, as Michael mentioned earlier, our team has focused on securing additional inventory in order to keep up with demand. Earlier this year, it became abundantly clear to us that the supply chain constraints would persist. We decided to proactively increase inventory to ensure we could meet our customers' needs and demands. On slide 13, it details what we believe are industry-leading software and manufacturing capabilities. We leverage our manufacturing engineering competencies to meet all EV charging's needs, a unique advantage in our competitive landscape that Blink has. Our approach has multiple benefits. One, it allows us to test and identify hardware and software capability early in the design process. And two, it gives us significantly more control over the supply chain inputs and manufacturing planning in our facilities in the U.S. and globally. Now, if we move to slide 14, you can see examples of our innovative product portfolio. This includes our network HQ200 charger, which provides up to 50 amps of level two charging for homeowners. This charger is already on sale with more information to be released within the coming weeks. The networked MQ design are growing commercial and fleet applications, and the Series 8 charger is one of the only fully integrated chargers with credit card capabilities that complies with the credit card swipe requirements in the state of California. Notably, this is not a bolt-on solution, but a fully integrated charger that we specifically designed with this functionality in mind. Next, you can see the picture of our Vision IQ 200 charger with a new design to take advantage of advertising opportunities in urban and retail locations. And the Blink EQ series is an intelligent, affordable, and scalable charging solution that fits any location It's compact design, and it supports technologies like OCP 2.0, bidirectional, charging, and V2G. The EQ200 will be used in our European and Israeli markets. On slide 15, you can see our current DC fast charger offerings. What is notable here is that we have products to satisfy many applications in North America, Europe, South America, and even Asia markets. These range anywhere from a 30 kilowatt wall mounted charger to a 350 kilowatt stationary charger. And that's not it. We are working diligently to introduce a more advanced DC charger to satisfy the expanding DC fast charging landscape. You can see that we have a wide ranging portfolio of charging solutions to fit the needs of any customer, public or private, small or large, with the ability to penetrate numerous end markets. Also, before I conclude, on slide 16, I'd like to just touch on our progress with the integration and synergies of our recent acquisitions of Blue Corner, Electric Blue, and Semiconnect. All are going according to plan. On the revenue side, this is something that we addressed in the early days after the acquisition. For example, both Blink and Semiconnect sales teams starting working together on lead generation, complementing each other's efforts and product offerings. In addition, we've been working diligently on converting some of Semiconnect's largest customers to the owner-operator model. Among them are large property management companies as well as large multifamily apartment owners. One example that comes to mind is Crow Holdings. Crow is a leading real estate investment firm with over $20 billion in assets under management. We just secured our second order of chargers for a property in Denver under the owner-operated model. Customers appreciate this flexibility in our offerings as they chose to deploy critical capital and allow Blink to own and operate the chargers at their location. Additionally, on the cost side of the equation, we are also on track. We have completed a comprehensive study and are in the implementation phase now. Our management team is conscientious about controlling cost and maximizing synergies. We are hiring very strategically as we are implementing a GNA efficiencies and optimizing our sales and customer service functions. The newly launched network and mobile application will be a tremendous component of our integration process. as we bring legacy acquisition chargers onto the new network and tech infrastructure, thus reducing our overall IT and support cost spend. All in all, we are very, very proud with the performance in the third quarter. Our fundamentals are strong as we delivered record, and I say that again, record results in Q3, even without realizing the full benefits and synergies from our recent acquisitions. We are positioning Blink for current and future growth, driven by the fast adoption of electric vehicles and favorable regulatory environments. This includes the administration's $7.5 billion infrastructure plan and the Inflation Reduction Act in the U.S., and numerous government programs in Europe and elsewhere. We are very, very, very excited at what's next for Blink. I will now turn it over to our CFO, Michael Rama, to run through some of the specific financial results for the quarter. Go ahead, Michael.
spk04: Thank you, Brendan, and good afternoon, everyone. Turning to slide 18, total revenue in the third quarter of 2022 grew to $17.2 million, another record for the company, and an increase of $10.8 million, or 169% compared to the third quarter of 2021. The solid performance in the quarter was driven by organic growth underlying by the strong fundamentals in our business and the results from acquisitions of Electric Blue and Semiconnect. Year to date through September 30th, 2022, our total revenues were $38.5 million compared to $13 million for the first nine months of 2021. With an increase of $25.5 million, we have nearly tripled our revenue for the first three quarters when compared with the same period in 2021. Product sales in the third quarter of 2022 were at $13.4 million, an increase of $8.5 million, or 177% over the same period in 2021. as customers purchased greater volumes of our commercial, DC, fast chargers, and residential chargers. Third quarter 2022 service revenues, which consists of charging service revenues, network fees, and ride-sharing revenues were $3.1 million, an increase of 123% compared to the third quarter of 2023. The year-over-year growth is primarily due to the increased utilization of our chargers and an increased number of chargers on blank networks. We combine these three service revenue line items into one amount to differentiate between the product and service aspects of our business, and this approach also aligns with our company's strategic goal of increasing the service component of our revenue mix and growing our recurring revenue base. In time, as EV adoption accelerates and utilization of our charging stations improves, we anticipate seeing a larger mix of revenues come from services. Gross profit for the third quarter of 2022 is approximately $4.8 million, or 28% of revenue. This compares to about $900,000, or 14% of revenue in the third quarter of 2021. As you can see, our gross profit doubled year over year as a percentage of revenues, primarily driven by stronger performance in product sales, service revenues, and improved performance in ride sharing and warranty as we expand our in-house production capacity we expect continuing improvements in our gross profit operating expenses in the third quarter of 2022 were 29.3 million dollars compared to 16.7 million dollars in the prior year period this increase is primarily due to higher expenses in the areas of accounting legal marketing investor relations and consulting Also included in the operating expenses for the third quarter of 2022 is increased amortization of intangible assets associated with the acquisitions of Semiconnect and EB. This is an expense that will continue but is non-cash in nature. Furthermore, the increase in operating expenses includes operating expenses from both Semiconnect and EB that were not included in the results for the third quarter of 2021. Adjusted EBITDA for the third quarter of 2022 was a loss of $17.6 million compared to a loss of $8.4 million in the prior year period due to the previously mentioned higher operating expenses. Adjusted EBITDA as a percentage of revenues for the third quarter and for the first nine months of 2022 both improved by about one-third when compared to the same periods in 2021. This performance was achieved without the impact of synergies that we expect to realize going forward. Adjusted earnings per share for the third quarter of 2022 was a loss of 47 cents compared to a loss of 36 cents in the prior year period. Non-GAAP adjusted EPS is defined as adjusted net income which excludes significant non-cash items such as amortization of intangible assets and non-recurring expenses such as acquisition related expenses divided by the number of shares outstanding. Now turning to slide 19, our revenues and gross profit performed very well in the third quarter of 2022. continuing the upward trend that we've seen over the past several quarters now, in part boosted by results from recent acquisitions. As we execute on our flexible solutions of owner-operated strategy, sell hardware, or facilitate the installation of chargers, and continue to further vertically integrate the key components such as hardware design and manufacturing, we believe that we are well-positioned to continue to capture market share and drive revenue growth. I have to say that in today's inflationary environment, customers appreciate our flexible business model as customers themselves can decide on how to deploy their capital. Moving to our cash position, at September 30, 2022, the company had approximately $57 million of cash. It is notable here that we have been proactive in increasing our inventory levels in the third quarter by nearly $7 million sequentially to ensure proper levels of product on hand to mitigate supply chain risk and to support a rapid growth in demand. We are very pleased with the results for the third quarter. Not only did we achieve record revenues, we also showed significant improvements in our operating results. These are a testament to our flexible operating model and the strong demand for products that satisfy a wide variety of customers. from homeowners, retin residents, and multifamily units to sophisticated Fortune 50 fleet customers, as we continue to integrate the recent acquisitions and leverage the operating efficiencies to drive continued growth. I will now turn the call back over to Michael Farkas for a few final comments. Go ahead, Michael.
spk03: The third quarter of 2022 was another monumental quarter for Blink. we achieved significant year-over-year top-line growth driven by organic and strategic opportunities. We launched our newly completely redesigned network and apps, and we announced plans to increase manufacturing in the United States. Blink is unique in our industry because we are the only fully vertically integrated EV charging provider in the US. While our competitors typically offer products or charging services, Blink designs, manufactures, owns the network that operates our chargers, deploys the hardware, and we also own a substantial amount of our equipment in the field. In addition, we offer a modern tech stack and we provide business models that best serve our customers. We have a hardware solution for every type of location, whether single or multifamily residential, fleet and workplace, retail, commercial, and even high traffic travel corridors. and with multiple deployment methodologies to get those chargers out there, giving us unparalleled optionality to property owners that none of our competitors can match. For example, if a property owner simply wants to buy equipment, we'll certainly do that. However, we prefer the value added structure provided by our owner operator model, creating a substantial long-term exclusive recurring revenue model for Blink. Before I conclude, There's one last thing I'd like to share with you. As Blink has done with level two chargers in the past, Blink and the combined SEMA are going to do with DC fast chargers in the future. I'm very proud to show you the current design of our new DC supercharger that is under development. In addition to having superior aesthetics, this will be our best in class type charger, compatible with the highest voltage vehicle architectures like the 800-volt architecture you see in some of the most advanced EVs being released. Pricing and availability will be off the charts. We can't wait to tell you more about it in the future. With that, we will now open the call for questions.
spk01: Certainly. The floor is now open for questions. If you have any questions or comments, please press star 1 on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on a speakerphone to provide optimum sound quality. Please hold just one moment while we pull for questions. Your first question is coming from Stephen Jangara with Stifel. Please pose your question. Your line is live.
spk08: Thank you and good afternoon, everybody. Good afternoon. I think there's two things for me. The first would be around the product margins. You delivered, I think, about 35% product margins. They were up I don't know, 700, 800 points sequentially. When we think about the product side of the business, and obviously you've integrated here the SEMA business, SEMA Connect business, how should we think about the progress in those margins going forward? Is there any anomalies here, or is this a trend that we should see improvements? I understand there's supply chain issues, inflation, et cetera, but how should we think about those margins going forward?
spk03: Very simply, we're going from a path of us having third parties manufacture equipment for us to doing it internally. So it's going to be very impactful to the Blink business moving forward.
spk08: And when we think about the... And by the way, I just wanted to be very clear, that's not happening overnight.
spk03: You know, as you mentioned, there are issues with the supply chain, so we're looking to get equipment from all of our different vendors today, but the ultimate goal is for us to produce our own goods. And that brings us up a couple notches when it comes to having to procure equipment and components and so on, and will ultimately lead to, we believe, higher margins in the future.
spk08: Okay, thank you. And the other one, and I've asked you this before, and I'm trying to get a sense, when we think about the services revenue line and the traction there, and I understand EV adoption, the big driver, et cetera, but how should we think about the number of units that are driving that business? As it evolves here, I'm gonna imagine those margins get better and the utilization goes up, but is there any way to think about whether the numbers are going up because you're getting more throughput at your existing installed base or if it's just simply a function of the installed base going up?
spk03: It's actually a combination of both. We're seeing higher utilization at our current chargers and we're getting more, obviously a lot more chargers out in the field.
spk08: And any guidance on how to sort of model that going forward? I mean, it's, it's obviously a high margin business. We're trying to get, so I'm trying to get a sense of how to, how to think about that number.
spk03: Michael, you want to maybe give a little bit better visibility on that?
spk04: Yeah. No, we're expecting as EV penetration continues to expand, we expect that number of services is not only it's charging revenues, but also network connectivity, right? So as well as some other ancillary services. So as more units are connected, more online, more connected to networks and as well as more EV adoption and penetration and service revenue utilization increases, we expect that to continue to increase and go higher. That's our, as we've always said, that's kind of our sweet spot and really generating revenues, high gross profit revenues from the service side of the business.
spk08: Okay, great. Thank you for the details. You're welcome.
spk01: Your next question is coming from Matt Somerville with DA Davidson. Please pose your question. Your line is live.
spk02: Thanks. A couple questions. First, just with respect to capacity, can you remind us what your current in-house capability is between Maryland, India, and I think you mentioned Taiwan, and how this new capacity comes online? Will it be in waves? Will it be all at once? And just remind around the timing of it. and then what the ultimate run rate is, and how quickly you think you can be actually producing at capacity. And then I have a follow-up.
spk07: Okay, so let's start first with U.S.-based capacity and what it looks like today. So right now we're between 10,000 and 11,000 units out of the Buhi facility, and that's the current state. As we mentioned during the acquisition, the plan is to increase that to upwards of 50,000. Those plans are in the first phase of that plan is increasing the shifts from what they are now at a standard one shift to up to two shifts and then moving to three shifts to up the capacity there. The subset of that plan is a little bit more squished footage added to that facility to get us up to that 50 mark. When you think about the relationship between Bowie and then India, India becomes the parts manufacturer. of all the components that are needed, and all those componentries and subsystems are put together, and boom, the finished product is shifted out from there. So that's how we get to the $50,000. Those plans are, as I said, in play. The second or phase two of the big master plan is to acquire some additional land within the United States. Then once we acquire that land, go ahead and build or buy a parcel with a building on it. And then in that facility, we'll begin to construct the DC fast chargers and add additional L2 capacity to meet the expected market demand, as Michael outlined in his original comment. Now, Lydon, in parallel, everything is not going to happen at once, so we'd have to maintain our global manufacturing presence through third-party contract suppliers, such as Lydon and our third-party suppliers. in Europe simultaneously. So there's a high level on all that. Let me know if you need any clarity as we move forward.
spk02: No, that's helpful. Thank you, Brendan. And then just kind of a housekeeping item. Relative to the 17.2 in revenue that you guys generated this quarter, Michael, can you disclose what the acquisitive contribution was so we can kind of get to an organic growth number for Blink? Thank you.
spk04: Yeah, I'll provide, you know, between SEMA and EB for the quarter, it generated about $6.5 million in revenues. So it was a good contribution, and it was, you know, but we still had good organic growth as well for the quarter. Great. Thank you, guys.
spk01: Your next question is coming from Chris Souther with B. Reilly. Please pose your question. Your line is live.
spk09: Hey guys, thanks for taking my questions here. Maybe just a bit more on parsing out some of the acquisitions. Are any of the services revenue coming from either EB charging or Semiconnect or is that mostly in the product side?
spk04: We're getting both. We're getting service as well as product with their network fees as well as the
spk09: charging revenues from uh eb is also as an owner operator a model that also produces charging revenues as well okay okay and so you know the charging you know services revenue that's coming from you know company-owned stations and networks could be you know networked and all that yep Yeah, okay. So you're getting network from them as well, and potentially networks from ones that you don't own as well would be kind of a way to kind of parse it out?
spk07: That's correct. Okay. Yeah, and the other one we didn't mention there, but it's in there, is the service contract revenue you get on non-blink-owned equipment that applies to all the different iterations. So it's networking services and...
spk09: service contract revenue okay uh that'll make sense um can you provide maybe an update on the size of the blinktone station kind of footprint and you know any kind of you know rough ballpark of where utilization is today if it's you're discussing kind of improvements that we're seeing lately michael yeah utilization yeah yeah you know we're seeing on the network where we have
spk04: As we mentioned in our comments, there's four networks now. You know, there's close to 44,000 units on all the combined networks between Link, Semiconnect, and all the networks that we have for the various companies that we've acquired. And the utilization, you know, we continue to see increases in the utilization. You know, there's more EV penetration, you know, still similar to how the adoption of the EV, you know, is penetrating from an EV vehicle standpoint, but also, you know, we're seeing, uh, even higher, you know, uh, you know, utilizations in Europe still. So, uh, so, uh, all, all is trending. I, like I said, it's trending in the positive direction and we're encouraged, uh, you know, what the third quarter produced.
spk09: Okay. Maybe just my last one. Um, I think last call you talked about, um, you know, working with some consultants around, you know, synergies with SEMA. I just wanted to see if, you know, any update on, kind of quantifying, you know, the costs that you think you can get there and then, you know, timelines around kind of the broader roadmap of the combined, which I think was kind of part two of that engagement.
spk07: Yeah, so I'll pick up that part. So in terms of realizing synergies, we're at the, you know, we're on the sales side of it. We're already actively involved in combining the organizations together. That activity is already happening. As we outlined in the call, we're already exposing both businesses and sales teams, which is now becoming one sales team with a multiple group of products. We've already started the cross-population of them selling, of the summit team selling the blank owner-operated model. And of that is where we're really predicting long-term revenue streams. Because as you're aware, the model that we put together is a learning model, so it keeps Refreshing itself and getting more data on where the most optimum sites are for the owner-operated model. We're able to cross-apply that data and look at the Semiconnect portfolio and find those sites where the return on investment is going to be quite good over time. And we've already started to capture business as we outlined as a result of that. So sales synergies moving on. Operational synergies are moving forward right now. We have a dedicated team after an initial break. analysis reports, which will be combining all those operations as they relate to support, call center, network operations, center, service, and maintenance. All those are underway and we'll realize the true benefits and synergies of them as we move into 2023. Okay.
spk09: I appreciate all the call there. I'll hop in the queue. Thanks.
spk01: Your last question is coming from Samir Joshi with HC Wainwright. Please pose your question. Your line is live.
spk05: Yeah, good afternoon, and thanks for taking my question. So just a couple of questions on the actual results. The network fees are substantially higher. Was this mainly because of the acquisition, or was there some organic growth in the network fees as well?
spk04: It was actually both. It was between the Semiconnect acquisition, but also the organic growth that's driving the network activity and the, you know, the expansion of our, you know, more chargers and more adoption into the networks. Networks. Yeah.
spk05: Yeah. Yeah. And then between the, in the operating expenses, we see compensation and general administrative costs sort of like swap the compensation went up and the general G and A costs went down during the quarter sequentially. Is there something that you want to point out there, what's going on?
spk04: Yeah. Yeah. In the comp, you know, what's included in compensation expense is share-based compensation. So sequentially we had higher share-based comp that got accounted for in the third quarter. because of grants and equity that was granted during the, I think it was the second quarter, but certain achievements were accomplished in those programs. So a majority of that is going to be the share-based comp that went up, not cash, if you will. And it's good to see that the G&A, so we're working hard, so it's showing. Yeah. we're, you know, we're, we're working on the, on the GNA where we're, we're trying to, you know, we're going to send, we're, we're, we're working to integrate and, and, and see where we could, you know, uh, be more scalable. And that's starting to see some of those reflect or reflected early on.
spk05: Understood. So, so we can see some operating leverage, leverage, not just by increased revenues, but also by reduced costs.
spk04: That's the expectation. Yes. As we move forward, you know, the, our OPEX as a percentage of revenues is expected to decrease just as we expand and penetrate and really integrate the acquisitions into Blink. Got it.
spk05: And then just stepping back, the $7.5 billion of which is coming through the state's What kind of visibility do you have on individual state programs and how they are implementing it or planning to implement it? If you have any insight that we may not know about, that would be great.
spk07: Yeah, so, you know, all states now have been approved under the federal program. So the NEVI plans they submitted are approved. Now it's back to the state to move forward with their implementation program. No state has moved forward with RFP yet. Most are in the very beginning stages of RFI. So it is how they're going to define who the players that are active in the state. They're going through that analysis, and then individually they're adjusting and being additive to the NEVI scorecard on what they want for their state. No state can reduce the requirements as outlined by NEVI or the scorecard. We are in conversations with the multiplicity of states as they're asking preliminary information. We're meeting with as many states as possible to discuss the blank and leaked capabilities under NEVI, and we continue making progress on that. But as of yet, we're not seeing anything being issued yet, and we'll see how aggressive it is in Q1 of next year. We're anticipating the bulk of NEVI to be played out as you get into Q3 and then into Q4 and then indeed into 2024 as well. And as you know, the program is deemed to stretch further out, and the funding is available further out. So we're being aggressive, keeping up to speed, working with the states, and we'll continue to do so in the months and quarters that follow. Thank you.
spk05: Yeah, no, that's good to know. Thanks for that insight, and glad that you are the forefront. Just one last question about this new supercharger design. Will it be ready for CES, at least in a conceptual form or something?
spk07: Most likely not.
spk05: Yeah, that's a lie. Sorry, go ahead.
spk07: I said most likely not, but we may surprise you.
spk05: Okay. No, good to know. And congrats on all the progress over the last several quarters. Thanks.
spk04: Thank you.
spk01: We have a follow-up question coming from Steven Gengaro with CIPOL. Please pose your question. Your line is live.
spk08: Thanks. Thank you for taking the question. Just could you remind me, as we think about the fourth quarter and just sort of the moving pieces on the top line, can you just remind us about sort of seasonality and different kind of puts and takes we should be thinking about that impact the fourth quarter?
spk03: Go ahead, Michael.
spk04: No, no, no, no. Obviously we'll, You know, as we saw with the sales that got reported over the 7,800, you know, expect, you know, it's kind of an indicator where we think the quarter could start at, but obviously the unknown is going to be the weather, you know, so some areas could be impacted and it just depends. So it could be a little variable that we're not unsure of at this point in time. But Michael, you might have more color to that.
spk03: Yeah, other than that, again, you know, the industry is growing and there is, you know, a lot of incentives coming nationwide and even, you know, areas globally to get charging equipment deployed. There's also mandates in certain areas now, new construction and so on. So, you know, we're staying on top of all of that and the industry is growing. And, you know, if you heard what I said earlier, you know, Bloomberg predicts that by 2040, you're going to need about a half a billion charging stations globally. So, you know, we've got to get from where we are today, which is only a couple million chargers that are deployed today, you know, viable chargers, and get to that, you know, almost 500 million number to be able to really support, you know, e-mobility globally. So we're seeing tremendous growth. We're seeing tremendous demand. We expect that growth to continue for the foreseeable future.
spk08: Okay, thank you. From a season out, from a fourth quarter perspective, are there, I mean, when you talk about weather, I mean, I think about some new car sales maybe rising. I mean, is there any sort of normal seasonal patterns in the fourth quarter? Is it just kind of overwhelmed?
spk03: Sometimes. You know, remember, we're installing equipment out in the elements. There are certain areas where it's very, very difficult if the ground is very, very cold. So the seasons do impact deployments. So, again, it could impact negatively. And if we have a really mild winter, it could allow us to accelerate our growth. But, yeah, typically in these times, because it is a lot of outdoor work and these units are deployed in the elements, it could impact things based on weather.
spk08: Great. Now, that's helpful, Carl. I was just sort of trying to think about the fourth quarter, but I appreciate the color.
spk03: Other than that, we see massive growth. Again, there's a lot of amazing automobiles on the road today that really satisfy a lot of different consumers' needs and desires. You're seeing the highest end of the market being electrified, and you're seeing the lowest end of the market being electrified now. It is the future of mobility and we need to make sure that there's enough charging infrastructure available to fuel all these cars that are coming into the marketplace. It's that simple. Excellent. Thank you everyone for your time.
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