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

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

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

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

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

Thanks, Michael. So folks, in Q2 Blink achieved growth driven by profitable and recurring revenue from services. We saw some softness on the product side in the second quarter which was driven by the current environment for EV sales. The EV market as a whole, it slightly dipped in Q1 and then it grew slightly in Q2. But overall, it is flat for the first half of 2024. Our total revenue is in line with this trend at that time. For the full year of 2024, Blink is adjusting its revenue target to between $145 million and $155 million. The company is also updating its timeline to achieve EBITDA -- positive adjusted EBITDA during 2025 now. We are maintaining our gross margin target of approximately 33%, supported by efforts of continuous improvement. Now when we focus on the robust increase in service revenue and significant reduction in expenses this quarter, this demonstrates the underlying strength of our business model. Our number 1 priority is to continue to structurally adjust for the future demand growth while also remaining nimble and responsive to changing market conditions. Blink's synergies, our cost cutting and our cost avoidance actions will continue through 2024 and beyond. We also will continue to advance our vertical integration strategy with production of high-quality Buy America compliant chargers from our facility in Maryland but at the same time, we are going to leverage our expanded manufacturing capabilities in the U.S. and globally to drive cost reduction, increase synergies and service our global customers. Now, let me summarize a few things that were mentioned earlier. During the second quarter, we continued to gain market share and expand our charging footprint. While our sales performance reflected the general short-term softening of EV demand, we are unquestionably still at the forefront of massive charger infrastructure build-out that is going to be with us for many decades to come. Blink is the third largest network in the U.S. with a growing network in Europe. As a result, we are well positioned to benefit from this long-term trend for EVs. If we look at the product, the Blink -- the breadth of Blink's product lineup, combined with our flexible offerings differentiates us in the marketplace and establishes the company as a leading provider of electric vehicle charging solutions that can meet the demands of virtually all customers across the board. In the second quarter, we continued to diversify our product sales to include more Level 2 charging equipment. Moreover, we anticipate that our enhanced focus on services and software solutions and integrating our product into the broader grid will allow us to expand our addressable market and increase revenue. We also significantly reduced our operating expenses by 41% compared to the second quarter of 2023 as we continue to drive efficiencies, scale our business and focus on reaching sustainable adjusted EBITDA profitability. With our unique vertically integrated model, we believe that Blink is well positioned to drive long-term growth and value for our stakeholders. We remain committed to expanding our global charging footprint and leaning into our mission of advancing energy transition through innovative charging solutions. And before we end this call, it is important to note that we believe we've created the best team in the charging industry. I would like to thank our team across the globe who is implementing our plan and taking care of our customers. And I also want to thank our customers and our drivers for trusting Blink with their charging needs and for being part of this transportation and energy revolution. Blink is successful because of our team; our team listens, they learn and they lead in this industry. With that, I think we're ready to take some questions. So we'll turn it over.

[Operator Instructions] [Technical Difficulty].

So Brendan, can you maybe talk a little bit about linearity of demand during the quarter and how things have progressed over the last few weeks? The weakness that you saw that you reported on the last quarter, I guess I didn't understand that to be something that was as material as what transpired. Can you say whether or not things deteriorated from that point? Or maybe if we hit a trough and saw sort of typical linearity? And then a second part of that question. Bowie, Maryland is a great investment. Obviously, you've got key customers in there that like to buy -- well, the made in America product. But in the quarter, you said there was a shift in product mix to third-party manufactured products. Is the market asking for something slightly different right now? What should we know about the revenue channel and what's driving volumes right now?

Okay. I'm going to start with the last question, then refresh me and we'll go back to the first question, all right? So looking at product, it's not that there's a change in customer demand on that. It's just that in our fully vertically integrated model, there's a miss on what's called a single plug unit. We have a dual plug unit which is very cost effective and drives down the acquisition cost for our customers. But when it's a single port charger that is needed, that has historically been a third-party product that we've gotten. So the demand for that slightly did increase. And so we had to use the third party at a lower margin factor on that particular product. And that's been consistent through our history. Now we're working to sunset that. What's going to happen, though, is our replacement charger that is being built by us, either in Bowie, Maryland and sourced globally as well out of our manufacturing facility in India, that's going to replace this charger. And so that's going to alleviate this legacy issue that we have on some of the revenue now -- on the margins. Now, keep in mind, we still maintain best-in-class margins despite that. So there's a lot of things that go into the equation. So the industry -- look, when you look at the sales and the numbers in first quarter were somewhere around 73% which were much lower than they were at the end of calendar year '23. They buoyed up and got a little bit above prior year, somewhere just over 8% for Q2. But they sort of stood there and that's flat, right? So we were predicting earlier that industry volume would be up to 10-plus percent and even higher in some indices. So that's primarily one of the drivers of what we saw in the lower activity and higher volumes on L2 charging and some DC charging as well which is a big revenue source for us as well. Now, you couple that in the U.S. with some of the political uncertainty and even some of the naysayers on EVs when it became politicized. I think that added to this equation that we saw. But we continue to see positive signs in the future. We continue to hear customers that we have open contracts with that are into Q4 and some announcements today, we got into Q1 of next year, that they're not backing off. They may have delayed a bit but they're not backing off. So we're very, very encouraged by that. We see the market rebounding a bit on the vehicle side. We continue to see the OEMs invest in charging and then invest in electric vehicles. Another announcement out today about Hyundai is investing in Taiwan to make sure that they have the component strategy for their massive increase in the EV sales. And that was another sizable investment by Hyundai. So, I think we're in this soft spot; we're seeing this soft spot is going to alleviate and lift. There might be some slowness in Q3 but definitely as we get into Q4 and beyond, we see the industry recharging itself, excuse the pun, and moving forward.

I like the pun. I definitely like the pun [ph]. If we could touch on the linearity in the quarter and how things are trending post quarter, that would be really helpful.

Okay. In terms of which part of the business?

The revenue progression. So I understand there's always a hockey stick into the end of the quarter. But can you maybe -- the softness that you noted, right, when you noted that last quarter, many of us hadn't weighed that as significantly as what materialized, right? So it was very early in the quarter and you tend to -- the visibility builds, right? Can you talk about how the progression of the quarter compared to a typical quarter for you? Where did we see things move to the point where you elected to adjust your guidance to some changing market conditions?

Yes. We adjusted the guidance because, I mean, number one, we didn't see that strength in Q2. So as a result, we were forced to adjust it. We see in our numbers, though, that month-over-month sales are improving. But what we're not going to do is getting into giving quarter-over-quarter guidance here. Michael -- whoops, I got to go Mike Battaglia -- you want to add any color to that?

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

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

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

Yes, just a real quick. So Craig [ph], I've been at Blink now 4 years. And one of the things that I love is the fact that our analytical capabilities continue to get better and better. So to your point, one of the things we are doing now is looking deep within the existing customer base and identifying those locations where we see the need for additional chargers. Now it presents a pretty interesting opportunity where we can do really 1 of 2 things. One is if we own the chargers at the site, we can expand them. But the second one is we can offer to take over chargers that, for instance, a host owns that -- where they're faced with wanting to add more chargers but maybe don't have the budget to do it or whatever it may be. So we're looking at it on both fronts. And as I mentioned in my comments, we're also looking more and more at high utilization DC fast charger sites in a responsible way that Blink approaches this. So yes, there's opportunity out there to do more on the owner-operator and high utilization front.

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

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

Sure. Thanks.

Your next question comes from William Grippin from UBS.

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

Yes. So it's a great question. So we just met with the team that is spinning off the company yesterday. So the S-1 is basically almost complete. We have a few more things we have to tweak in it. Roth [ph] is a selected company that is doing the spin with us right now. We've got -- the decks are done to go on the investor roadshow. We're paying attention to market feedback right now in terms of what is the market like. Is the IPO the right way to go? And then we're also working on the cost side to make sure that we're reducing the expenses overall across the board. So there's a lot of expenses that we have an opportunity on both the BlueLA model and the Envoy model but in particular the BlueLA model to begin to reduce significantly. Those activities are now fully underway. We'll have a timeline update on when they're going to materialize in the numbers. But we feel optimistic. The IPO market isn't great right now but we believe the fundamentals of the spin as we move into the back half of Q3, into Q4 that there's going to be an opportune window to go ahead and go ahead and spin the company off. Mr. Rama, any clarity around that?

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

Yes.

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

Yes, absolutely. So DC fast charger as an owner operator is a different beast entirely. So what we've adopted and has been serving us very well as a company is we're not going to plant flags as a company. There's other companies that are planting flags. And we're not going to put a charger in the ground that doesn't have positive station economics or positive station economics within a basic ROI time frame. Typically, we look for 4 years or shorter on that. If there is a DC fast charger project, if there's government funding and we can meet that, then we engage in that project and we're getting some of those projects now. And the same thing, even if there isn't grant money, if we can still engage in that project and it's going to have that return, then we're going to do it. Blink is not like some of the other folks that are engaged in DC. We're not a cost of sale model. So when we do a DC fast charger, we do it for a return on investment in the short term. And as I said, it's 4 to 5 years we look for on that ROI. And we're starting to see this. Now on the sales side, last year we had a big sales year on DC fast chargers. It's very different this year. And when you break out the numbers, you'll see that we transitioned rather successfully away from heavy DC and replaced a lot of that revenue with the increase in service revenue and the increase in L2 sales. Now, we think DC is going to bounce back but it's going to bounce back more in a fleet setting and more in a commercial setting for big commercial companies, et cetera and then continue inroads for highway infrastructure. So -- but then our preference on DC is leaning heavily now to more owner-operated and more strategic locations in downtown areas and high urban transportation areas where people drive and live with their EVs.

Your next question is coming from Stephen Gengaro from Stifel.

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

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

[Indiscernible].

Say that again.

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

Yes. I mean the entire industry is. There are several OEMs that will -- and there's no problem at Tesla, right? It's this, they're in this position where they have to heavily incentivize because their fleet of EVs is a little older. And you got a lot of new cars coming on the market and the competition is getting intense which is good for the overall industry to drive down cost. So definitely, all the data indicates that GM, Hyundai, Kia, BMW, all have seen increased EV sales, while Tesla has flattened up and seeing a little lower, in some cases on sales. So -- and that's good news. And think about it. When we said 40% of new vehicle launches are going to be EV on top of all the other markets out there, the competition is just increasing moving forward. So we'll see Tesla become smaller as a portion but it still might be the number 1 single brand that's charging on our stations right now.

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

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

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

Can you hear me?

Yes.

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

Yes, you're going to see some vacillation in the numbers where we're -- mostly you're going to see it where we're upgrading chargers, where we're taking out legacy chargers or replacing some of the original, original blank chargers with new chargers. And when you take them down for that long a period of maintenance or replacement, you're going to see some changes in the numbers. Now your goal is always to offset that by having a higher number of chargers that are adding on the network. But when you go through some of the cleansing, so to speak, of older legacy chargers, especially taking off the network, older legacy chargers that aren't on or operated. They're site host chargers that the site host has just decided not to maintain, not to keep up. You're going to see a decrease there. Mike, any additional color around that?

No, Brendan, I think you got it.

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

So what we can say conclusively when I'm trying to give guidance on that topic, it's almost like mini guidance, right, is that your utilization as a whole is increasing over time, right? It's got some seasonality in it which we're actually moving into that seasonality now. It usually starts at the beginning of the summer and then softens up on utilization significantly in August and then bounces back for the rest of the year. But overall, we expect to see an increase in Europe's percent of revenue as a percent of total Blink revenue because that's the trend, right? They're at a higher pen rate in general. And as more countries open up and try and compete with one another for who's got the most EV adoption, competing with Norway or competing with Belgium and the Netherlands and Germany, who are the leaders in EV adoption, along with U.K., who is right behind but is incentivizing, we do expect that revenue in Europe. I don't know if it's going to get even or be 50% but it's certainly going to improve from -- Michael, where is it today, 24%?

Yes. 24%, yes.

Okay. 24% today; that we definitely see. And that's -- and just to clarify that, that's on owner-operated revenue, not on sales revenue. Sales revenue, it will improve over time but we see that more of keeping pace with the U.S. but service revenue, we definitely see increasing in Europe over time.

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

No, absolutely. How about reemphasized?

Just want to make sure. Yes.

So we actually -- yes, we are adding resources in both U.S., Europe and then in our development center outside of Delhi to make sure that we can deliver to the market on time. We have the base package out of energy management services. We're also -- into the enhanced packages right now. Those are being developed. And we'll have an update as we move through quarters and we're going to see those products begin to launch. But that is a major, major strategic focus of the company. So you won't see resources declining in that area. You'll see resources improving over time.

Our last question comes from Noel Parks from Tuohy Brothers.

How is everything going?

We're good. How are you?

Real good. Thanks. Real good. I wanted to touch on your comment on multifamily and fleet. And those seem to be sort of a persistent bright spot when you look at demand among the many different submarkets. And just thinking, is it simply that, especially I'm thinking commercially owned multifamily, is -- they're constantly in sort of an upgrade cycle or renovation cycle or in fleets, a vehicle retirement cycle, so that it's just more front burner for them when they're doing capital investments that we got to get our EV charging in as well. Is that a big part of the driver of what kind of keeps them going?

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

Yes. Thanks, Brendan. So the first part of the question on multifamily, I think the statistic is that 1/3, nearly 1/3 of American citizens live in an apartment building. And it's a big percentage in Europe as well. So just the sheer volume of that market is big. Secondly, when we look at fleets, it's a combination of things. Number one, it's -- yes, as they -- as vehicles age and they retire those vehicles and they acquire new vehicles, we see a big movement towards battery electric. The second thing is, as the market has gained more experience with BEVs, they realize that the total cost of ownership is simply better. And one of -- there's 2 big impacts to that. One of them is our maintenance costs and the other is fuel costs. And then thirdly, there are many, many fleets out there that simply have carbon reduction footprint goals and that's driving demand as well. So there's really -- it's really coming from a number of different areas but we are very bullish on the fleet market.

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

I'm sorry, what part of that? Can you repeat the question?

Yes, part of this question was multifamily dwellings.

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

Oh, I'm sorry. Never mind.

Oh, that's okay. Noel, did I get you on the -- did I answer it on the multifamily side, or...

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

Yes.

And I was also wondering I feel like it's a core part of the story as it's evolved and as you've gone through acquisitions, it keeps coming back to business model, business model and business model, the flexibility that you offer to a wide variety of customers. And I hope that that's not sort of the so old hat that the salience of that isn't necessarily coming through. But can you just talk about maybe some recent examples, say, of a new, sizable potential customer coming to you and sort of working through the variety of business models and sort of what -- how they get to whatever outcome of adoption they choose?

Mike, do you want to take that?

Yes. Yes. Thanks, Brendan. So, Noel, in fact, we're in the midst of one that is really a great example. So there are 2 paths to this. One of them is a customer that looks at EV charging and says, you know what, I'm not an EV charging company. I do -- I specialize in retail. I'm a retailer. So I would rather concentrate on retail and have you guys concentrate on EV charging. And they still receive a benefit from us in terms of revenue share when they do that. So that's one piece of it. But another piece of it which we're seeing more of and I'll give you this particular example, we have a -- and I'm not going to name the name but it's a major, major health care company in the United States. And they previously owned their chargers across the country. And they basically realized that they did not want to own the responsibility of maintenance, uptime, all of those different things because, again, they're -- what they do is deliver health care. They don't worry about EV charging stations. So we're actually in process of taking over all of their L2 charging stations coast to coast. And we think that's going to be a trend that we see going forward, where even customers that currently have EVSE in the ground are just simply not going to want to continue to do it themselves. They're going to want a provider to take it over for them.

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

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

Yes. So it's getting over -- it's probably a year plus now that we've launched continuous improvement and cost reduction and cost avoidance throughout the company in a very intense way. We started it early, early in '23 very softly and then rolled it out across the globe into every business unit. And now it is -- it's part of everybody's daily jobs. And we'll give you an example. We had one example where one of our individuals in the tech team that's not -- his daily job isn't to cut cost but he identified a few vendors that he resourced against another vendor to give us a better technology and then a better cost. And after he did the comparative analysis and worked with purchasing, we net an annual savings of about $300,000 to $350,000 out of that. So those activity and those wins are now spread across the company. They also spread to where we still have several duplicate systems that are -- now have a firm sunset date that is all marked in 2024. And once those sunset, then we save all the money that is allocated to maintaining those duplicate systems. One by one, we're sunsetting them and we've already had success in finance systems from the U.S. to Europe, where we're aligning now. We've already done it on CMS systems where we're aligning now. Now we're doing it on networks. We're aligning now. And then, also we're looking at -- and one of the key things, if we have underperforming business units, we're going ahead and closing down those underperforming business units. And we've done quite a few of those in different countries throughout the world already. And to say that, hey, it's not mature for us right now to invest additional resources in that. We'll take that money that we're investing there. We will go and move it into a much more higher GDP country and then move into that. So that's part of it. We have more of those to share with you as we get through the balance of the year but we've enacted some pretty significant savings on one. We'll give you one example on one country we just moved out of; and our net save after moving out of after 1 year is $800,000 just by netting out and ceasing operations. Those activities are going to continue throughout the company. That is now the Bible to be a Blink employee and we're going to continue to enhance that as we move forward.

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

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

Thanks, everyone.