Blink Charging Co.

Greetings and welcome to the Blink Charging Company second quarter 2023 earnings call. At this time all participants are on a listen only mode and a question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference please press star zero on your telephone keypad and please note this conference is being recorded. I will now turn the conference over to your host Vitaly Spilea, Vice President of Investor Relations. Sir, the floor is yours.

Thank you, Ali. Welcome to Blink's second quarter 2023 earnings call. Today on the call, we have Brendan Jones, President and CEO, and Michael Rama, Chief Financial Officer. The discussions today will include non-GAAP references. These are reconciled to the most comparable U.S. GAAP measures in the appendix of our earnings debts. 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 could cause actual results to differ are included on page two of the second quarter 2023 earnings deck. Unless otherwise noted, all comparisons are year over year. Now, regarding the investor relations calendar, Blank will be participating in the JPMorgan Automotive Conference in New York City on August the 10th, Barclays CEO Energy Power Conference on September the 5th through September the 7th in New York City, and HC Wainwright 25th Annual Global Investment Conference on September the 11th through September the 13th. And please follow our announcements for additional investor events in the future. I will now turn the call over to Brendan Jones, President and CEO of Blink Charging. Please go ahead, Brendan.

Thanks, Vitaly. Good afternoon, everyone, and thanks for joining us today. Before we get into the good results from Q2, I would like to provide a quick refresher on Blink and our capabilities. Now, Blink is the only fully integrated US full-service EV infrastructure provider. And what that means is we control our own design, our own manufacturing, our network services. Our products have been designed to meet any charging needs and with best-in-class reliability. Now, in addition to all that, we are unique in the marketplace because we have diverse and synergistic revenue streams. Not only do we sell a variety of chargers and network services, but we also own and operate chargers with flexible offerings. In fact, whether we sell or operate them, there is virtually no difference from an operational standpoint. We use the same processes and contractual relationships to undertake commissioning, deployment, service, maintenance, and uptime monitoring. Overall, we believe that our vertical integration and ability to drive synergistic revenue streams provides us with a competitive advantage and positions blank for sustained growth and improved profitability as we continue to scale the business. So now let's transition and let's talk about the performance during Q2. If we move to slide six, we are pleased to say that we delivered a record quarter. far exceeding any previous quarters in Blink's performance history for the company. Our second quarter 2023 revenues increased nearly threefold to $32.7 million when compared with $11.5 million in the second quarter of 2022. Our second quarter revenue growth of more than 100% was almost exclusively organic, and was driven by strong demand for our products and an unprecedented growth in services. Our service revenue increased by 211% to 7 million, and our charging service revenue increased almost 200% to 4.4 million, compared to 1.5 million in the second quarter of 2022. Now, that is nearly a $3 million increase in revenue at a 68% gross margin, which includes the depreciation expense. And importantly, our network fees, which are reoccurring in nature, increased by an impressive 253% to 1.7 million. Blink's ability to generate high margin revenue that is reoccurring in nature is another solid building block as we move towards achievable, towards achieving profitability. Now, Blink's company-wide gross margin in the second quarter of 2030 was another absolute record, coming in at 37% compared to 17% gross margin in the second quarter of 2022. Our strong revenue margins in service definitely helped here. However, the majority of the positive margin came from Blink manufactured chargers sold during the quarter, and our efforts in the areas of expense management, cost avoidance in our manufacturing process. As we scale our business and increase volumes, we believe we can do even better. Our margins will continue to improve as we move forward. In the second quarter, we contracted, sold, or deployed 5,830 chargers globally. And it's important to mention here, that DC fast chargers are increasingly becoming a larger portion of our revenue mix. Blink chargers dispersed during this quarter 16 gigawatts of energy across all of Blink's networks globally. Now, if we look even deeper, as you can see, the second quarter was Blink's strongest ever, and another record-setting quarter for the company. We have been laying the groundwork to build our footprint and capture market share and customers for more than three years. This quarter is a testament to the success of our strategy and the strength of our business model. We believe that these positive results demonstrate that our strategy is working. Importantly, we are optimistic that as the focus on building EV infrastructure intensifies, The momentum in our industry and our ability to capitalize on favorable market conditions will continue. We don't view the results of this quarter as a one-off. Rather, we believe there is a tremendous opportunity to continue this momentum. With that in mind, if we flip over to slide six, you can see that we are increasing our revenue target for 2023. We are now targeting revenue in the range of $110 to $120 million versus our previously stated target range of $100 to $110 million. This new target is based on our current visibility of the marketplace, our pipeline, and our sales backlog. We are also reiterating our annual gross margin target in excess of 30% for the full year of 2023. with expected margin accretion in 2024. Now let's move over to slide seven. And this is a big topic. It's achieving profitability and how this is a key priority for this management team. Today, we are announcing that we are targeting positive adjusted EBITDA run rate by December of 2024. We've waited to provide this target until we had visibility to provide a target as realistic and as attainable as possible. We have seen and are seeing the demonstrated success of synergies, vertical integration, proactive cost saving actions, comprehensive product portfolio, and positive trends in the revenue backlog. We had a very positive second quarter, but we are not done yet. This team remains focused on further reducing our operating expense and burn rate through expense management, cost avoidance, and revenue enhancement actions. In the second quarter of 2023, our operating expense increased related to significant growth since the second quarter of last year, and also due to significant one-time chargers, which Michael Rama will detail for you later in this call. Over the past three years, Blink has acquired six companies, Since the beginning of 2023, we have identified and moved forward with more than $8 million in operating expense reductions. We will see additional reductions as we continue combining the functions and integrating the acquired entities into Blink. For 2023, we also expect additional ongoing expense savings for sunsetting legacy networks and leveraging the newly launched Blink networks. not only are we eliminating legacy networks like we just did with Semiconnect Network in June, but our new Blink network is expected to require less maintenance and ongoing costs than some of our competitors with older and more fragmented systems. In addition, we have more opportunities in the GNA area, especially when it comes to streamlining functions under one ERP system in implementing shared services services for core functions. Over the last few months, we have adopted a culture of continuous improvement, and this approach is becoming the mindset across our organization. We do not look at this approach as just a one-time solution, but as the embrace of a data-driven, continuous, methodical, and sustainable improvement plan throughout all aspects of our businesses. In fact, we have been working with one of the leading global consulting firms and identified numerous actions with a disciplined plan to achieve additional business savings and revenue enhancement strategies. We remain intent on our goal to focus on our core competencies, which include our intent to unlock the potential value provided by the spinoff of our car sharing business. We acquired Envoy in the second quarter and already identified over $1 million of ongoing yearly synergies from combining the two entities of Envoy and Blink Mobility. We continue to execute on our plan to IPO Blink Mobility by the end of this year's. Next, let's jump over to slide eight, and we can see the growth to date and the forecasted growth for electric vehicles and the EV chargers globally. We believe we are only at the beginning of this long runway. There are over 1 billion vehicles in the world today, with the auto industry adding anywhere from 70 to 90 million vehicles every year. If less than half of those become electric by 2044, then the forecasted charger numbers are nearly 500 million chargers by 2040, and that seems very reasonable. And this represents global growth in excess of 30 times. When it comes to the U.S. market, you see on slide nine, you can see that the market is projected to grow to over 30 million charges by 2030 and over 90 million charges by 2040. This is approximately $100 billion in investment by 2040. We think it is especially important to note that according to McKinsey, PricewaterhouseCoopers, or Bloomberg New Energy Finance, the vast majority of chargers, over 90% of them, are forecasted to be level two chargers, and we agree with this assessment. The industry is still developing, and it's changed greatly over the last 15 years, and it's growing. A new debate now has started in which charging standard will become the predominant one in the U.S.? Is it CCS or is it NACS? This question has been in the news recently as we saw significant numbers of OEMs commit to NACS. Now, as it relates to Blink, we are happy to say that we are agnostic and we are able to provide and support whichever standard becomes predominant. We view the adoption of NACS as a positive development for Blink. we look at our customers and our segmentation by OEM. Tesla drivers are our number one customer group for level two chargers today. And this is partially due to the fact that Tesla has by far the largest market share of EVs in the United States. With our newly unveiled 240 kilowatt DC fast charger, which will support both NAC and CCS standards, we believe Blake is in position to capture additional sales and service revenue. Now if you pivot a little to DC Fast Chargers on slide 10, you can see that DC Fast Chargers are a growing part of our business with about 987 DC Fast Chargers contracted and sold in the first half of 2023. And about 10 million in revenue this year so far can be attributed to DC Fast Chargers sales. Now let's jump over to slide 11. You can see examples of our innovative product portfolio, which has advanced and flexible solutions for both level two chargers and high-powered DC fast chargers. With these offerings, we service both residential and a variety of commercial customers and are prepared for the increased demand, whether it be due to NEVI or natural inflections of customer preference for EVs. Let's jump to slide 12. Within the last 12 months, Blink has contracted, sold, deployed, or acquired over 5,830 chargers, both domestically and internationally, bringing the total charge account for the company to nearly 79,000 chargers since Blink's inception. 78% of the total company-wide chargers is attributed to North America and 22% to international locations. Now, on slide 13, we show a partial sampling of our customers. They represent well-established commercial entities, multifamily complexes, planned communities, healthcare facilities, fleets, and municipalities around the world. We are very proud of our contract with the United Postal Service. And as a reminder, the contract goes up to a volume of 41,500 charges over the next next three years, and Blink has been quite successful, and these numbers are reflected in our financial results. Fleets are becoming a wider segment of our business as government and commercial enterprises are converting to EVs to save on operating costs. So with that, I'm going to turn it over to Michael Rama, our CFO. Michael, take it from there.