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Good afternoon everyone and welcome to the Blink Charging Company's First Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode and we will open for questions following the presentation. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Vitalie Stelea, VP of Investor Relations. Vitalie, over to you.

Thank you, Jenny, and welcome to Blink's first quarter 2024 earnings call. On this call today, we have Brendan Jones, President and CEO; Michael Rama, Chief Financial Officer; and Michael Battaglia, our Chief Operating Officer. The discussions today 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 the 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 and the most significant factors that could cause actual results to differ are included on Page 2 of the first quarter 2024 earnings deck. Unless otherwise noted, all comparisons are year-over-year. And now, regarding the investor relations calendar. Blink and the team will be attending the B. Riley Institutional Conference in Beverly Hills, California on the 22nd of May, the Stifel 2024 Cross Sector Investor Conference on the 4th of June in Boston, and the JPMorgan Energy, Power & Renewables Conference on the 17th of June in New York City. We will be meeting with investors during all of these events. Please also follow our announcements and our website for additional events in the future. And now I'd like to turn the call over to Brendan Jones, our President and CEO. Please go ahead, Brendan.

Sure. And thank you, Vitalie. Good afternoon, everyone. Thanks again for joining us today. Let's just jump right into the presentation. So let's go to Slide 4. So, 2024 is off to a strong start with revenues for the quarter growing to 73% year-over-year. That is a first quarter record of $37.6 million for Blink. Blink service revenue increased by 72% to $88.2 million. Now, our charging service revenue increased by 74% to $5 million compared to $2.9 million in the first quarter of 2023, representing a $2.1 million increase in charging revenue. We also recorded a 27% increase in network services fees to $2.1 million for the quarter. And our network servicing fees are reoccurring in nature and they represent what we call a reliable and high margin revenue stream for Blink. Blink's company-wide gross profit in the first quarter of 2024 was $13.4 million or 36% compared to $4.5 million or 21% of the first quarter of last year, representing a gross profit increase of $8.9 million or 195% in gross profit. We contracted, sold, or deployed 4,555 chargers globally in the first quarter of this year. Blink's chargers dispersed approximately 30 gigawatts of energy across all Blink networks globally in Q1 of 2024. As you can see from these numbers, our revenue is becoming increasingly diversified. We have a competitive advantage in our industry because we offer flexible business models and we can provide L2 and DC chargers as well as network and charging services. We can be nimble not only in our response to addressing customers’ needs but also in reacting to changes in the market which allows us to effectively manage revenue generation and profitability. Our first quarter was characterized by strong performance by the Blink team and is indicative of healthy customer demand. Furthermore, demonstrating our ability to leverage our manufacturing and logistical strengths to meet that demand, vertical integration is working for Blink. If we move to Slide 5, for 2024, we are keeping our full year 2024 revenue target unchanged at $165 million to $175 million. Now, while we had a strong Q1, which we by the way are very, very excited about, we are also seeing some lower bookings in April. We are closely monitoring the market and it's too early to tell if we will see an impact in the full year revenue targets. We regularly review our pipeline and will provide an update if necessary in the future. However, as a result of several companies exiting the charging space or reducing their presence along with confirmation of some very strong orders in the Q3 and Q4 time frame, we expect opportunities for additional growth in the second half of 2024. We are also maintaining our target of achieving positive EBITDA run rate by December of 2024, as well as our full-year 2024 gross margin target of 33%, which you've already seen that we've overachieved in the first quarter. If we jump to Slide 6, we have recently strengthened our balance sheet and are properly capitalized to achieve our adjusted EBITDA run rate target. Our cash and cash equivalents at March 31, 2024 were $93.5 million. Now let's move on to Slide 7. Let's take a minute on Slide 7 to discuss what is happening in the industry with demand for EVs and EV infrastructure. Despite reports that EV sales are slowing, Kelley Blue Book indicates that first quarter 2024 EV penetration was 7.3% of sales in the US, which is an increase of 2.6% versus Q1 of 2023. Sequentially, there was a bit of decline when you view EVs in terms of the number of vehicles sold as compared to Q4 of 2023. This decline is primarily due to Tesla volumes. As the other nine leading EV manufacturers, excluding Tesla, reported EV sales growth of over 50% in Q1 of 2024. And that includes Hyundai, Kia, Ford, Mercedes, Cadillac, BMW, and others. Additionally, we saw on March 27th, 2024, that Hyundai revealed an ambitious $50 billion investment to secure the top three spot in the EV market. We continue also to see growth in Europe and specifically the markets where we generate a significant amount of charging service revenue. In Belgium, the Netherlands, UK, and Ireland, EVs continue to gain significant momentum with robust growth. In Belgium, battery electric vehicle registrations increased nearly 50% in Q1 2024 versus Q1 2023. In the Netherlands, there was growth of nearly 20% versus last year. And in the UK, according to The Guardian newspaper, a record number of chargers were installed in Q1 of 2024. The UK also recorded a number of battery electric vehicle registrations this month of March, representing nearly 25% of all cars sold in the country. In the US, McKinsey currently forecasts over 28 million charges will be needed by 2030. And globally, EV infrastructure spending is forecasted to be about $260 billion by 2030, with about 90% of those chargers being L2. Now, moreover, industry data shows that EV infrastructure significantly lags behind the current EV fleets on the roads today in the US and also lags to some extent in Europe. We also see increasing consolidation in our industry with certain of our competitors choosing to reduce their presence or in some cases, even pull back entirely. Blink sees these as opportunities to grow and deploy our disciplined operating models in both the L2 and DC fast charger markets. Now let's pivot over Slide 8. You can see that cumulatively as of the end of Q1 of 2024, Blink has contracted, sold, or deployed nearly 95,000 chargers since the company's inception, on the way to exceed 100,000 very soon. Now if we look at that geographically, 77% of the total company-wide number is attributed to North America and then 23% to Europe and some other international locations. Now let's move over to Slide 9. You can see our innovative product portfolio and flexible solutions for both L2 chargers and high-powered DC fast chargers. The variety of products we offer appear to a -- appeal to a broad and diverse range of customers. Our Series 7 and 8 chargers, which are produced in-house in the US at our Bowie, Maryland facility, are the most popular Level 2 model among our customers. Now, if we move to Slide 10, it shows a representative group of our customer base, including many recognizable names across commercial entities, multifamily complexes, planned communities, healthcare facilities, fleets, and municipalities around the world. As we said before, we take advantage of places where vehicles idle and sit. And just last week, we announced that Blink was selected as one of the official electric vehicle chargers and network service providers for the state of New York. We are excited to have this opportunity to work in close cooperation with New York authorities to electrify the state and municipal fleets, provide public charging for employees, for residents, and for visitors of the city. So with that, I will now pass the presentation over to Michael Rama, our CFO. Michael, take it away.

Thank you, Brendan, and good afternoon, everyone. Turning to Slide 12, total revenue in the first quarter of 2024 grew 73% year-over-year to $37.6 million. Product sales in the first quarter of 2024 were $27.5 million, an increase of 68% over the same period in 2023. This was primarily due to customers purchasing greater volumes of our commercial charges. First quarter 2024 service revenues, which consists of charging service revenues, network fees, and carsharing revenues, were $8.2 million, an increase of 72% compared to the first quarter of 2023. The year-over-year growth was primarily driven by greater utilization of our chargers in the US and internationally. The increased number of chargers on Blink networks and revenues associated with our carshare programs. Our gross profit for the first quarter of 2024 was $13.4 million, an increase of 195% or $8.9 million over the same period last year. As a percentage of revenues, gross margin was 36% in Q1 2024 compared to 21% in the same period of the prior year. Importantly, we improved our gross margin in Q1 nearly 200% on revenue growth of 73%. This is primarily due to the shift to higher margin product, increased vertical integration of charger manufacturing, as well as higher gross margins from service revenues. Operating expenses in the first quarter of 2024 were $30.9 million, which is a decrease of 13% or an improvement of $4.5 million. This decrease is especially notable when compared to total operating expenses as a percentage of revenues, which showed nearly an 8,100 basis point improvement in operating expenses year-over-year. Within this number, compensation expense was down $7.8 million or 34% year-over-year and SG&A was down 8% or about $700,000 versus the same period last year. Excluding the impact of the non-cash charge related to a change in fair value of a consideration payable of $1.7 million, the actual reduction in overall operating expenses in Q1 would have been $6.2 million or 18% versus the prior year. This is the result of reductions in executive compensation and discipline, cost reductions, and cost avoidance actions achieved through continuous improvement efforts. Adjusted EBITDA for the first quarter of 2024 was a loss of $10.2 million compared to a loss of $17.8 million in the prior year period. This is an improvement of $7.6 million year-over-year. Sequentially, Q1 adjusted EBITDA improved $3.8 million compared to Q4 2023, and significant improvement from just one quarter. Adjusted EBITDA for the three months ended March 31, 2024, excludes the impact of stock-based compensation, acquisition related costs, estimated loss related to underperforming assets of a subsidiary, and the change in fair value related to a consideration payable. Now, earnings per share for the first quarter of 2024 was a loss of $0.17 per share, compared to a loss of $0.53 per share in the prior year period. As of March 31st, 2024, the weighted average share's outstanding was 99.9 million shares. As of March 31, 2023, the weighted average share is outstanding was 56.5 million shares. Adjusted earnings per share for the first quarter of 2024 was a loss of $0.13 per share compared to a loss of $0.49 per share in the prior year period. Non-GAAP adjusted earnings per share is defined as net income which excludes the amortization of intangible assets, acquisition related costs, estimated loss related to underperforming assets of a subsidiary and the change in fair value related to consideration payable divided by the weighted average share is outstanding. Now turning to Slide 13, you could see that Q1 2024 reflects significant progress in revenue growth when compared to the same periods in 2023 and 2022. Two years ago, our Q1 revenue was below $10 million. And in Q1 2024, it was about $38 million, a four times growth trajectory in just two years. However, what we believe is equally important about this quarter is that we generated a 36% gross margin and reduced our total operating expenses by over $4.5 million. So in Q1, revenue was up 73%, gross profit was up nearly 200%, and total operating expenses went down 13%. And if you now turn to Page 14, here we are showing the quarterly growth in our service revenues. Just three years ago, we had less than $350,000 in service quarterly revenues. In Q1 2024, we recorded $8.2 million of service revenues. That is a 24 times increase at a 189% CAGR. The impressive growth is due to the scale and synergies we obtained from acquisitions, as well as new and innovative ways to deliver our services. As for the balance sheet, cash and cash equivalents at March 31, 2024 were $93.5 million. We used $21.5 million of cash in operating activities in Q1 2024, that is nearly $3 million less than Q1 of last year. As of March 31st, 2024, we fully paid off promissory notes and interest of $45.5 million related to the SemaConnect acquisition. And subsequent to the end of the first quarter, Blink paid off $7 million of notes payable associated with the Envoy acquisition. Currently, we have no cash obligations -- no cash debt obligations on the balance sheet. In summary, we had a record Q1 for both revenue, gross margin, and adjusted EBITDA showing significant improvements. This is a result of meticulous planning and decisive actions that started two years ago. And we will now -- we will continue to structurally adjust Blink as we move forward. This concludes our -- my prepared remarks. I'll turn the call back over to Brendan. Brendan?

Thanks, Michael. So now let's wrap this up. Obviously, you can all tell we are very pleased with our team's performance in Q1 of 2024. As you can see from the numbers Michael just reviewed, Blink continues its positive momentum in the marketplace. We showed again that we can deliver. We delivered 73% growth in revenues and 36% gross margin while improving adjusted EBITDA by $7.6 million. At the same time, we reduced our operating expense by 13%, which is a reduction of $4.5 million. Additionally, Blink now has zero cash debt. We paid off all of our cash debt obligations. Our number one priority right now is to continue to structurally adjust the company for future opportunities, as well as changes in the market conditions. Blink's synergy, cost cutting, and cost avoidance activities will continue throughout 2024. Our goal is profitability and cash generation that will ensure that Blink can grow sustainably into the future. We fundamentally believe that this is achievable, especially with our culture of continuous improvement that is already showing positive results. Again, very proud of our team and the effort this past quarter. But we are even more excited about the future of Blink. We remain committed to making Blink more flexible, adaptable, and most importantly for this industry, financially sustainable, as we continue to charge towards profitability. Now, that concludes our formal remarks. I think we're ready to turn it over for some questions. Thanks.

[Operator Instructions] Your first question is coming from Chris Pierce of Needham & Company. Chris, your line is live.

Hey, good afternoon, everyone. Thanks for taking the questions. On the April softness, was this -- I'm assuming this was before the Tesla news. I think calendar wise that lines up. But I'm just curious because the Tesla news, we're hearing a lot about the superchargers and the Level 3 chargers that they have out there. But they had been moving down into the Level 2 space and had won some hospitality deals with Hilton and I believe Best Western. So I guess, are you optimistic about those deals being reopened and that kind of creating a revenue opportunity for you guys? I just kind of want to get a sense.

Yeah, I mean, sure, we can't get into specifics. But, I think the thing that we can say factually is we've received quite a bit of inbound inquiries already when the news came out and we put ourselves in a position that we're poised to take advantage of them when they actually materialize into an offer order an order. So yes, it has created some momentum for us and we have the products and services and charges to take advantage of that and we intend to do so.

Is that Level 2 momentum or just broad based across Level 2 and Level 3?

We've actually received inquiries on both.

Okay, okay. And then just on the cash burn versus the cash balance and getting -- exiting this year positive adjusted EBITDA, I don't want to specifically ask about ‘25, but just kind of, it looks like there might be some tightness going into the end of the year based on Q1 cash losses. How should we think about the remainder of the year and kind of potential financing needs as you see it?

Yes. As we've stated, we have enough cash on the books to get through EBITDA positives. We're not going to make any statements just yet in terms of free cash flow for 2025, although we've said previously that is the goal. So it's that balance to when does that goal is achievable. We are investigating opportunities that we may have as we move into 2025. But as we said and said before, we will not be engaging in any equity raises or dilution-like activities throughout this year, but we will have more to come on that topic as we get into most likely Q3 and Q4 this year. Michael Rama, any additional follow-up to questions on that?

No, I think you -- not for me.

All right.

Okay, thank you.

Thank you very much. Your next question is coming from Craig Irwin of ROTH MKM. Craig, your line is live.

Hi, good afternoon, congratulations on a really strong revenue quarter. So, Brendan, you guys are crushing it on the gross margin side, right? You're well above the guide for 33% coming in almost 36% this quarter. Can you maybe talk a little bit about where this strength is coming from? And you maintained your guide for this year, so should we think about potential expenses or inefficiencies for gross margins as Bowie, Maryland starts to ramp? Are there other business mix items that you may be factoring in the guidance that has you give a number that's consistent with what you've guided before but lower than your recen…

Yeah, I mean, there's always continuing to work ourselves out of some legacy product and we've been doing a fairly efficient job of that. There's still a little bit to go, but it's nothing -- it's not a game changer. And we took some of that this quarter as well. So it really is two things that add up to this equation. It's continuing to push hard on vertical integration and take cost out of the equation. That's both in the US production side and on the parts manufacturing and sub-assembly side in India. Then also, it's pushing for an increase in Europe of more efficiencies and cost savings on the owner-operator model, where that revenue that we're generating off of chargers we own and operate continues to be a class-leading margin. And that also has a big positive effect. Not only is that revenue growing considerably month over month, quarter over quarter, year-over-year, but also it's becoming more profitable. When you compare us to other in the marketplace in terms of margin on owner operator, we're the gold standards. We set the bar for everybody else there. We're well above EVgo and others in terms of margin on the owner-operator side of the equation. So you wrap those two up together, you take a look at the networking fees that we get and that those are scalable from L2 to DC fast charger and then added software that we're going to be coming out in the market with around energy management and other services that we need in the marketplace to grow. And it continues to add to that margin. And that's why we really believe the flexible business model combined with operating in Europe and the United States and doing both the sales of hardware and services and networking services and the owner-operator models really making us flexible and adaptable as the market changes.

Excellent, thank you so much for that. My second question is about the progress towards positive EBITDA at the end of the year. So if we're thinking, you know, it's not really a positive EBITDA quarter, but positive EBITDA month, so that you're breakeven, you need a fairly substantial move on either lower costs or higher margins if we assume that you execute at the high end of your guidance for revenue. So can you maybe help us understand how we balance lower SG&A costs and salaries and comp as you consolidate these five facilities down to one and reposition the business? I guess there's probably outside expenses too that you're eliminating. Can you maybe just help us frame this out? Consensus is a long way from breakeven EBITDA, right?

So where I can, there's certain activities we can't disclose yet because of the sensitivity of them, as you probably are aware. But we've announced that we are going to, and we'll have the spin-off completed this year, Blink Mobility, and that includes the BlueLA car service. So that is going to remove a large chunk of it in that simple action. Then also, we are engaged in cost reduction activities across a multiplicity of the businesses. That will be revealed more as we move into Q2 and indeed in Q3. Those include expense reductions. There is some structurally adjusting certain businesses and reorganizations that will result in savings on headcount, et cetera, in there, and there's also the closing of non-performing assets. We'll have an announcement shortly on one non-performing asset that we're eliminating. We've successfully sold it. It is below the line right now, but there's a significant net savings in terms of cash outlay on a monthly, quarterly, and yearly basis that will net. And we have at least one or two of those more to go. So when you add it all up, our team that monitors that, they have all these in the different slots and levers where they come in. We see ourselves right now at the current market rate and at the current revenue streams that are coming in, we see ourselves achieving the goal based on the cuts that we have planned, the spin-off, et cetera. So we still feel confident about that. Mr. Rama or Mr. Battaglia, any additional comments for Craig? It's a real good question that we expected.

No, my only additional comment would be, Craig, that -- and this is Michael Battaglia, that we continue to be focused on expense reduction across the business. The EBITDA positive goal is a number one goal of Blink. As long as the market cooperates with us on the top line, we have the plan in place to achieve.

Excellent. I really appreciate that answer. So just as a follow-up, it sounds like Blink Mobility is probably the biggest factor in the spin-off there. Can you maybe share with us what their expense burden was in ‘23 or what's a good sort of rough number for us to be thinking in ‘24 as we look at that? Maybe not the forward-looking number, but the historical number is probably the easier one to give.

Michael?

Yeah, I'll jump in on that one. Yeah, historically, between the combination of Envoy as well as BlueLA, it was burning about $4 million, bottom line EBITDA. So there's a good chunk that we're looking at that's going to be, once that gets solved, resolved, and all that stuff, that will be a positive impact to that EBITDA goal. And as we've mentioned, it's really look at these non-performing assets and really be able to position ourselves to really benefit to the strengths of what we do best. And that's an EV charging infrastructure.

Great, and then last question, if I could squeeze another one in, is the Post Office. You guys did a great job winning that contract. It looks like the two other vendors, well, they both outsourced, I guess. It depends on how you look at it. But it doesn't look like either one of them has Buy in America compliant product. I think the Post Office is talking about 14,000 chargers this year. How ready are you to serve demand from the post office? Do you believe it's accurate that the others do not have Buy in America compliant products to offer the Post Office at this time? Is there anything else we should probably look at to understand the potential in there?

So I'll say this. We can't comment on the other manufacturers and where they stand, right? We can say that we are in good standing in our relationship with the Post Office. We're in contact with them and they're in contact with us about what the future looks like for 2024. We have a lot of confidence in the communications that they're delivering to us and what we need to do to fulfill the orders that will come in in 2024. The details of it, we haven't got permission from the Post Office to release yet. So we have to kind of lay a little bit low on that. Mike Battaglia, any additional insight onto that other than what I just said?

Yeah, the only thing I would add is, Craig, you asked about production capacity and to answer your question directly, yes, we have the production capacity to fulfill what they're looking for.

Perfect. Thank you, gentlemen. Congrats on another really solid quarter. Impressive.

Thank you very much. Your next question is coming from Stephen Gengaro of Stifel. Stephen, your line is live.

Thanks, good afternoon everybody.

Hey, Stephen.

So a couple things for me. The first is when we think about the different pieces of revenue. I'm going to think of product sales, but then the charging service revenue. How should we think about the relative growth of those pieces as we go forward? And I'm talking about multiple quarters or even the next couple years. Like, should we think about products outgrowing that piece? Or do you think you'll start to see the charging service revenue, because of EV density picking up, start to kind of accelerate?

Well, I'll take a shot at it and then I'll let the rest of the team try and answer it as well, Stephen. But certainly what we've seen on the trend analysis, and I'm going to focus on service revenue first, is that utilization in Europe continues to increase significantly, month over month, quarter-over-quarter, and year-over-year. And we continue in Europe to win awards to install more chargers under that model. So we're going to see that revenue continue to grow, especially as we max out utilization on certain stations and have to add more. However, when we go back to the data and looking at the US alone and looking at who's in the space today with full service solutions. Who is one-stop shop and can provide network installation, chargers and a flexible model to do that. And that's on the product side and we're one of the most well positioned ones, plus the vertical integration that we have allows us to do that in high margins. So we do see product continuing to deliver a lot of revenue. And we see growth there, but we think the growth is going to be higher on the owner operator model than it will be on the product model over time. The difficult part is when does that inflection point come? And we haven't -- well, we've done some internal analysis on that. We have nothing substantial enough to report out as here's when the inflection point will be and when it’s going to eclipse the other. Michael and Michael, any comments?

This is Michael Rama. I would just add that we've seen just in Q1 itself this year is I think a little bit of a shift towards a little -- mix on hardware or product sales to service, we're on about 70% now, where we had used to be 75% to 80% on the product side, and now service is closer to 30%. So we're starting to see an increase in that service side of it as a percentage of overall revenue trend.

Okay, that's helpful. And then the one other question, and this is probably a sort of three year view plus, I mean, should we think about the growth in your business kind of just paralleling EV sales growth? I mean, is that a reasonable way to think about the North American business? Or do you think there are parts that either outpace or underperform that [Technical Difficulty]?

Yeah, I think it's a reasonable assumption to say that some but not all of the growth will go in parallel to EV sales. But as you -- we also know that as we're moving more into energy services and SaaS options such as load management, building management, load curtailment, integration into microgrids, et cetera, those are different services will provide standalone revenue as part of the overall package of network services. So the SaaS end of the business is going to continue to grow. And we can only say what we're working on right now, what I just outlined, but we expect that new things in the future may come in to energy management. Internally, we have a whole task force and strategy group that's focused on energy management as a standalone item. And we believe that we'll see more out of that particular channel in the future. And then there's going to be other SaaS things. Since we manage our own network and we deliver other software services and it's our development center in the US, Europe and in India, the SaaS applications will continue to grow. So, Michael Battaglia, any other comment on that?

No, I would just add that one of the beautiful things about Blink is that we approach the market where the market is and where the customer is and what the customer wants. And we keep going back to this, but our business models enable us to do that. So when we think about the mix between product sales versus owner operator, things like that, that's largely going to follow the market opportunities. That said, the focus of the organization is on repeatable, high margin, recurring revenue. So that, as we know, is more directed towards things like service, it's things like Blink-owned owner-operator chargers out in the field. So our focus always is that. But we will continue to deliver to the market what the market's asking of us.

Great, no, that's good color, gentlemen, thank you.

Thank you very much. Your next question is coming from Sameer Joshi of H.C. Wainwright. Sameer, your line is live.

Great, thanks. Good afternoon, everyone. Thanks for taking my questions. Just if you could give us a little bit more insight into your developments on the energy management solutions. I know you referenced it for the previous question, but should we expect these to be standalone or grid adjacent applications or charging adjacent applications?

Yeah, so I'll answer, Sameer, first at about a 30,000 foot view and Mike might give you some more color commentary. So it's a two-staged -- it's a two-faceted approach. There's European energy management service and US energy management service primarily as we're looking at it. The needs in Europe are actually significantly different at this point in time than the needs in the US. So the team is already developing these features and benefits. I'm not going to give you a release date yet because that would be premature, but we already have some of them in place today. And on top of that, we're adding to fleet management services. So, they'll be standalone in terms of -- you have to have the network to activate them in most cases, but they will fit into either model that we do. You can do them on the owner operator, the hybrid model, or the sales model, and one will benefit Blink and the other will benefit the customer. So their application, it has to be with the network. So it wouldn't be standalone as the piece of software that you can buy right now. At first, it's going to help to service the network and generate business. Because what we're seeing in the RFPs that are coming out, you have to have these in order to win the business. And that business that we're seeing is part of a full-service RFP for full-service -- for the chargers, for the network, for the installation, for the energy management, all wrapped into one. Mike, any additional on that?

No, Brendan, I think you covered it nicely.

All right, thanks.

Occasionally, the CEO is smart, right? Occasionally.

Just another question, and this was also referenced earlier, but it seems the product margins are nearly 40% this quarter. Are there further -- is there further move to improve these margins going forward and is that sort of a part of your getting to a positive adjusted EBITDA by the end of this year?

Well I certainly hope we can improve them. I don't want to commit to anything just yet. As you know we're -- we continue to be conservative so we can meet expectations properly as a company. Yeah, we do have some. We're not seeing a lot of commoditization in the commercial space as of yet, and we are seeing an uptick in the need for quality product. But we also have to balance that, again to the needs for DC fast chargers which ebb and flow a little bit more. And when you have higher orders on the DC side, you do reduce some of your margin. Now, we are -- we've already succeeded in some margin protecting activities. The first was bringing on our DC 9 charger which we produce ourselves and we have a higher margin on that but we're working on our own DC fast charger but we'll have that made by a third-party manufacturer. So if the balance is primarily L2 and those are the commercial chargers that we're very adept at building, yes, you'll see improvement. But on the whole, we have to be a little conservative. While we'll move to 80% vertical integration when we convert European L2s over to Blink manufacture, we'll still have a lot of high revenue DC fast chargers moving out and those won't be at those high margins that we have the L2. Michael, I might have convoluted that a little bit. Any color or commentary or clarification on that?

I could jump in, Brendan. Actually, I have just a couple of quick comments on that. So one is we have a couple of different levers that we can pull in terms of margin expansion. One of them is SKU consolidation which we're working on. So simplifying in order to sell more of fewer SKUs for economies of scale, purchasing power, things like that. The second is, while we have our manufacturing facility in Bowie, Maryland that's providing Buy America compliant chargers, we also have the ability to produce finished goods in India. And that represents another lever we haven't pulled yet for margin expansion of our L2 product line. So there are a couple of different things that we can do to continue to work on that. I think as Brendan indicated, we're holding to our guidance. We had a good Q1, and so we'll see where that takes us.

Understood, thanks for that. And then one last one on costs. Will you remind us what constitutes other operating expenses? I think they were slightly elevated this quarter. How should we look at it if we are projecting it for the rest of the year?

Yeah, I'll jump in on that. We had over $2 million, we had $1.7 million that ran through operating expenses for adjustment to fair value, I'll call it an accounting adjustment towards fair value of bringing up the consideration payable to Envoy that's in stock, so that we had increased that liability. So that was another $1.7 million. We pulled that out from an adjusted EBITDA standpoint because it's really not an operating, it's a GAAP adjustment if you will. And so then we also had another $0.5 million that we had to take a charge on underperforming assets related to a subsidiary. So that in conjunction is about $2.5 -- $2.2 million just in the quarter that's non-recurring.

Okay. And the $6.4 million other operating expenses likely elevated related to like $3 million to $4 million in the previous quarters?

Yeah, it could be timing on some activities and stuff like that. So we had a little bit more probably in the T&E that we may have, and some trade shows that you had that we were at in the first quarter and some of that. But the meaningful items is the -- the items that are -- that I just alluded to.

Got it. Thanks a lot and congratulations on the great quarter.

Thanks, Sameer.

Thank you very much. And your last question is coming from Noel Parks of Tuohy Brothers. Noel, your line is live.

I just had a couple. I wanted to just touch back on maybe a little bit of what's happening on sort of the grants function. And I just wondered if you had any updates you could share around NEVI funding and just maybe where that's showing up in your business, what sort of visibility you might have there.

Yeah, we've won a couple NEVI sites already, But there's a key thing as a covering statement that we should use. All of our forecasting and data analysis right now that we're looking at, it's devoid of winning grants in the future. We believe that to become a sustainable company, we can't rely on government funding because it may or may not be there. And there may be less opportunities or more opportunities depending on how we fit into particular programs and RFPs that the states or the federal government put out there. So with that said, we do look for NEVI opportunities that really fit Blink. And what I mean by that is we will not be a plant, a flag company. And what that means is we win an award we put a station there just because we won the award. If the site doesn't have positive station economics and we don't get a positive return for our shareholder in a set amount of time, we will pass on the NEVI opportunity regardless of the state and the amount of funding provided. The ones that we have won and there's only a few of them that we've won, they already passed that litmus test, meaning that we're going to get a return on that investment and we can show positive growth in revenue over a period of time to our stakeholders. Now, we do participate and we're already heavily involved in the second part of, it's not the NEVI, but $7.5 million and there's another $2.5 million set aside for other projects and we're already fully engaged. Thanks, Mike. And Mike, actually you're better to answer the CFI part. So you want to follow up there?

Yeah, yeah, no problem. So there's -- as Brendan indicated there's two pieces to NEVI. There's the DC fast charging side. And then there's this other $2.5 billion for what's called CFI. And the CFI money is thought to be geared towards Level 2 community charging. That money is not just -- it’s not allocated in the same way that the DC money is. So what happens is local municipalities, states et cetera, they apply for these funds, they have a project or projects in mind, and then they get approval, they get funding, and then what they will do is RFP out to companies like Blink to win those projects. So those are starting now, and our real focus as a heavily focused L2 company is to pursue those. So those are just right at the very beginning cusp of money being released, those RFPs being issued. So while we're going to continue to pursue the DC side, we are most definitely running hard at the CFI side.

Great. Thanks for that detail. And, I was just wondering, thinking about the network and sort of the, as you have more time operating a broader set of networks, as far as the customer charging experience, just wondering what sort of feedback you might have had in recent quarters. And were there any goals or enhancements on the horizon, I don't know, either for the app or the onsite software that you have in mind?

Yeah, continuous improvement. We're analyzing feedback from everywhere. We've analyzed equipment that we may need to sunset because it's not functioning properly due to firmware or software issues. We just launched Blink Care which is a preventative maintenance program that helps improve the quality of stations out in the field that just launched the other day. We're also working on an effort to consolidate platforms as Mike spoke to earlier, and what that does, it limits your problems with points of connection between software, firmware, and a multiplicity of platforms, vertical integration is helping with that. So we have a plan that is both operational and technology-minded to day over day, week over week, year over year, improve our quality scores. We're already signing them to tick up, but we're paying attention to the industry, the feedback. We're very, very active in the space. Mike is leading that effort. So, Mike, any comments from you on quality and quality improvement initiatives?

Yeah, so one of the hottest issues in the industry is charger uptime, customer experience charging, obviously mitigating and eliminating broken chargers. So as Brendan indicated, that falls under my purview, and it is something that is reviewed, analyzed constantly, literally on a daily basis where we look at the population of chargers that are healthy, that are unhealthy. We have -- we do deep dives into the nature of the issues that are causing a charger to be down, offline, whatever it might be. But this is a multifaceted issue which sometimes folks overlook because there are some challenges associated with someone else owning the charging stations. So we have a lot of control over the charging stations that we own ourselves and our uptime is very high on those stations. When you sell a charging station to someone and if they don't maintain it, it's very difficult to, in some respects, enforce that if you will. So we are trying many different things from a marketing perspective, from a field services perspective, to ensure that the entire portfolio of blink chargers in the market are at their optimized reliability.

Great, thanks. Sounds perfect.

Thank you very much. Well, we have reached the end of our question-and-answer session. I will now hand back over to Vitalie for any closing remarks.

Thank you, Jenny, and thank you all for joining us on the call today and for your interest in Blink, especially as we announced our another record first quarter. To summarize the quarter in a few numbers, our Q1 revenue was up 73%, our gross profit was up nearly 200%, and we did all of that while reducing total operating expenses by 13% and making significant progress towards our adjusted EBITDA profitability run rate target. So for additional questions or requests to meet with management, please email us at [email protected] and we'll look forward to engaging with you in the future. Thank you.