BLNK - NASDAQ

Greetings. Welcome to the Blink Charging Company's First Quarter 2025 Earnings Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Vitalie Stelea, Vice President of Capital Markets and FPNA app Blink Charging. Vitalie, you may begin.

Thank you, Paul, and Welcome to Blink's first quarter 2025 earnings call. With us today we have Michael Battaglia, President and Chief Executive Officer, and Michael Rama, Chief Financial Officer. Today's discussions 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 differ from those stated and the most significant factors that could cause actual results to be different are included on page two of the first quarter 2025 earnings deck. Unless otherwise noted, all comparisons are year-over-year. And now regarding the investor relations calendar, Blink will be participating in the Stifel 2025 Boston Cross Sector Conference on June 3. Please follow our announcements on our website for additional investor events to be announced. And at this point I'd like to turn the call over to Mike Battaglia, President and CEO of Blink Charging. Please. Go ahead, Mike.

All right, great. Thanks, Vitalie. Good afternoon, everyone and thank you for joining us today. Before we turn to the details of the quarter, I'd like to begin with some broader context. The first quarter proved to be a difficult operating environment, impacted by ongoing macroeconomic pressures, some typical seasonal trends, and a noticeable shift in customer behavior, particularly among more price sensitive segments. So, while charging service revenue increased 35% year-over-year to a new record high, our product sales were $8.4 million for the quarter, down sharply from Q1 2024. During the quarter, it became evident that while extensive, our current product portfolio does not sufficiently address the value-oriented segment of the market and that GAAP had a meaningful impact on our performance. The encouraging news is that we've been deploying, excuse me, we've been developing a new charger to meet this demand, and we've accelerated our efforts with the goal of bringing this product to market later this year within Q4. We believe our new charger will fill this demand gap and position us more competitively in the marketplace. As I mentioned, charging revenue increased 35% during the quarter, showing meaningful growth driven by higher utilization of our deployed infrastructure. In Europe, we saw charging revenue growth 22%, reflecting our expanding footprint and strengthening market position. We also advanced our cost efficiency initiatives, achieving an 8% reduction in operating expenses, bringing total operating expenses down to $28.5 million for the quarter, the lowest we've had in nearly three years. Additionally, the Blink Networks delivered approximately 50 gigawatt hours of electricity during the quarter, representing a 66% increase year-over-year, underscoring the growing demand across our networks. One thing we've learned throughout our many years in this industry is the importance of focusing on what we can control. We remain confident that the transition to EVs will continue over the long-term, driving the global build out of EV charging infrastructure needed to support EV drivers worldwide. In fact, EV sales grew in the US by 11.4% in the first quarter versus the prior year, which is a healthy increase. In Europe, EV sales saw robust growth, increasing by 24% within Germany, Belgium and the Netherlands reporting significant gains in EV sales. Blink's advanced solutions and flexible offerings position us well to increase our leadership role and capitalize on these positive trends, especially with our strong presence in Europe. Turning to Slide 5, you can see the steady growth in our charging revenue from the first quarter of last year through the close of the first quarter of 2025. Service revenue for the quarter was $10.6 million, an increase of 29.2% compared to $8.2 million in the first quarter of last year and a sequential increase of 7.5% compared to the fourth quarter of 2024. This growth was driven by increased utilization, a greater number of Blink owned chargers in the field and an increasing mix of DC fast chargers, which is another key focus area for us as I talked about last quarter. These growing utilization numbers highlight the demand for our charging services and the need for more charging infrastructure. We closed the quarter with 7,091 company owned chargers, which is a 22% increase year-over-year. With more Blink owned units, disciplined site selection and the addition of more DC fast chargers, we expect to continue to deliver increased charging revenues as utilization grows. We are committed to having the right charger in the right place at the right time. The deployment of DC fast chargers is a key focus area. During the quarter we announced an agreement to provide up to 50 DC fast chargers to the city of Alameda, California. We are aggressively pursuing more opportunities to grow our DC FC charging portfolio as we believe DC offerings are the growth engine of our network. In fact, our DC fast charging revenues in the U.S. increased over three times compared to the first quarter of last year. Service revenue also grew internationally and we are one of the leading charging service providers in Belgium and the U.K. Our international presence provides revenue diversification and heightens our brand recognition on the global stage. Europe was an early adopter of EVs and our geographic presence there strengthens our revenue and profitability models. Blink U.K. recently announced that they have been named as a preferred bidder by Brighton and Hove City council for a 15-year contract valued at over 500,000 British pounds. This is one of the first contracts awarded through the Local Electric Vehicle Infrastructure Fund or LEVI, which will add a minimum of 350 additional chargers to the more than 400 Blink chargers already operating across Brighton and Hove. This opportunity marks the latest in a series of key milestones for Blink's international growth delivering an innovative, future ready sustainable charging network. The capabilities of our global network continue to expand. We are finishing up the process of folding our European software networks into our global Blink 2.0 network. This consolidation will provide operational and cost efficiencies. We are committed to improving the usability, reliability and accessibility of our network through continued software development and pursuing roaming agreements and network integrations with industry partners. Now let's move to Slide 6. As I mentioned earlier, the reduction of cash burn and operating expenses is a priority to preserve liquidity. We reduced our operating cash burn by 45% and brought down total operating expenses by 8% in the quarter. And we have more coming. Now I'll turn the call over to our CFO Michael for a more detailed look at our financial performance in the first quarter. Go ahead, Michael.

Thank you, Mike, and good afternoon, everyone. Now turn to Slide 10. Our Q1 2025 revenues were $20.8 million compared to $37.6 million in the prior year quarter. Product revenues for the first quarter of 2025 were $8.4 million compared to $27.5 million in the first quarter of 2024. As Mike mentioned, we've accelerated the development of our Gen-3 charger to ensure alignment with customer demand. First quarter service revenues, which consists of charging service revenues, network fees and car share revenues, increased 29.2% to $10.6 million compared to $8.2 million in the first quarter of 2024. Gross profit was $7.4 million or 35.5% of revenues compared to gross profit of $13.4 million or 35.7% of revenues in the first quarter of 2024. Operating expenses decreased 7.9% to $28.5 million compared to $30.9 million in the first quarter of 2024. The company remains focused on continuing to reduce operating expenses and cash burn across its business as it drives towards profitability. Loss per share for the first quarter was $0.20 compared to a loss of $0.17 in the first in the prior year period. Adjusted loss per share for the first quarter was a loss of $0.18 per share compared to an adjusted loss per share of $0.13 per share in the first quarter of 2024. Adjusted EBITDA for the first quarter of 2025 was a loss of $15.5 million compared to a loss of $10.2 million in the prior year. As of March 31, 2025, cash, cash equivalents and marketable securities totaled $42 million compared to $55 million as of December 31, 2024. Blink had no cash debt as of March 31, 2025. Based on our current visibility, Blink expects revenue to increase sequentially in the second quarter of 2025 and to show continued growth in the second half of 2025. Service revenue is expected to continue to increase throughout 2025. The company also remains focused on continuing to reduce operating expenses and cash burn across its business as a driver towards profitability. Blink expects to have improved visibility around its timeline to reach adjusted EBITDA profitability as the year progresses. I would now like to turn the call back over to Mike for his final commentary. Go ahead, Mike.

Okay, thank you, Michael. So there's no question that the EV charging industry is facing a complex macroeconomic environment. As mentioned at the beginning of this call, we remain focused on the factors we can control. Executing with discipline in the near-term while positioning Blink for sustained long-term growth and profitability. Our strategic approach begins with ensuring that the right charging infrastructure is deployed at the right locations and at the right time. With that principle in mind, when it became evident that we were missing a product offering in the value segment, we accelerated our development efforts to bring a new Charger to market this year. We are innovative and nimble in our response to customers and market demand and we look forward to the launch of our Generation-3 charger. Equally important, we continue to invest in innovation that unlocks new market opportunities, addresses industry pain points and drives operational efficiency. As such, at the ACT show we announced a fully integrated product with Create Energy, which is a turnkey DC fast charging and energy storage solution focused on grid resiliency. This offering combines Blink's EV charging technology and network services with Create Energy's nano grid platform to enhance the performance, uptime and economics of our DC fast charging installations. For those of you who might not be familiar, a microgrid is a small scale, self-sufficient localized power grid system. As you've likely seen reported, with power grid strained alternative technologies are required to mitigate electricity demand and support grid reliability. And this combined solution does just that while also reducing energy costs through avoidance of electricity demand charges, which can be expensive. Under this dual market agreement, Blink EV chargers will be offered alongside Create Energy's nano grid systems and vice versa, creating a powerful end to end solution for customers. The global microgrid market was valued at $17.4 billion in 2024 and is expected to grow to $33 billion by 2033, according to IMARC Research. We believe the Create Energy collaboration presents a compelling opportunity for Blink to deliver a differentiated value-added solution while further advancing our energy management system capabilities. Most notably, the combined fully integrated solution can eliminate costly demand charges and function either connected to the grid or off grid and significantly accelerates both deployment timelines and returns on investment. And this potential is not theoretical. One of our nano grid deployments with a global multinational customer in Nashville, Tennessee is already delivering strong uptime and healthy economics demonstrating the commercial viability and scalability of this solution. Our collaboration with Create Energy exemplifies how we are expanding Blink's market reach and product portfolio to include next generation technology integration. We have nano grid opportunities in our current pipeline and we believe this collaboration strengthens our competitive positioning and unlocks meaningful value for both our customers and shareholders. Turning to Slide 13 as we progress through the remainder of 2025, I want to reaffirm the strategic priorities we introduced last quarter under Blink Forward, which is our strategic focus for sustained success. At the core of our strategy is a clear mandate, the relentless pursuit of profitability and profitable growth. While we continue to focus on growing our top line, we are equally intent on delivering disciplined execution to drive margin expansion and long-term shareholder value. Our five-pillar strategy provides the framework to achieve this. So, pillar one is flexible customer centric business models. We remain committed to solving real customer challenges by delivering dependable hardware, a consistent and accessible network and advanced software to optimize energy usage. Our recently launched partnership with Create Energy and their nano grid solution exemplifies how we are moving towards smarter, more cost-effective infrastructure. The second pillar or pillar two is expansion of our DC fast charging owner operator portfolio. We are focused on deployment of Blink owned DC fast chargers in high traffic strategically located sites. We view our owned and operated model as a key driver of long-term growth and value creation, particularly as demand shifts toward faster, more convenient charging. To efficiently finance DC deployments. We are exploring off balance sheet structures including what we previously announced with Axle Trova in the U.K. Pillar three is growth in recurring revenue and services. Recurring revenue streams are a core component of our future growth. In Q1 our service revenue increased 29% year-over-year and we are laser focused on expanding this high margin segment. Pillar four strategic positioning amid industry consolidation. We are actively exploring ways to capitalize on market consolidation, capturing displaced demand and enhancing our technology stack through targeted accretive M&A. These moves are designed to strengthen our competitive position while accelerating our innovation roadmap. And Pillar five is cost optimization, cash preservation and capital efficiency. We are rigorously managing costs, driving operational efficiencies and preserving cash by eliminating non-essential spending and right sizing our workforce. Each of these pillars supports our overarching goal, achieving profitability through a combination of strategic revenue growth and responsible expense management. Now I'd like to thank our team for the efforts during the quarter. Our product results did not meet the goals and expectations we set for ourselves and we have redoubled our focus to drive product sales, continue to increase charging revenue and make progress on each pillar of Blink Forward as we continue through the balance of 2025. So with that we can move on to Q&A. Operator?

Thank you. At this time, we will be conducting a question-and-answer session. [Operator Instructions] The first question today is coming from Craig Irwin from Roth Capital. Craig, your line is live.

Good evening and thanks for taking my questions. So Michael, the first thing Michael Battaglia, the first thing I wanted to ask about gross margins, right? These had some really nice sequential improvement and you know, seem to be tracking well for the management of profitability, right? You've got your gigawatt hours up, you've got your service revenue up. Those tend to be pretty stable profit drivers. Can you talk about how mix is maybe helping you a little bit in the short term? If we see similar mix in the second quarter, and maybe you can talk about that too, do gross margins have room to continue improving or are they likely to be where we are now more or less, until the new products are out there?

Yes. Yes. Thanks, Craig. So, in the first quarter we saw a larger mix of level two versus DC, which generally speaking helps us from a margin perspective. As we go into Q2, there's a couple things to note. As we mentioned, we see sequential revenue growth in Q2. We see more DC fast chargers entering the mix as we go forward. However, what we also see, and we've been talking about this for a long time, is reducing or eliminating our dependence or involvement with third party L2 chargers. And we have successfully whittled that down to very, very little. So now as we continue forward, the vast majority of the L2 units that get sold or deployed by Blink are Blink built. And that inherently helps our us maintain our gross margin profile. So I would say to answer your question, that we see consistency throughout the year in that mid-30s range for gross margins. Obviously, we're going to do everything we can to continue to improve those, but I think as we, for planning purposes, I think we would, we're comfortable saying consistent with this quarter.

Thank you. That's really encouraging. So, then my next question is about the new value-oriented products. The products you're introducing to address kind of where the market is shifting to. I know that you have a make versus buy analysis that you, even on a component level, we'll look at sort of make versus buy for boards and things like this. Can you talk about the different considerations that you bring to how you're approaching this product portfolio? And I understand time to market is also, very important because, your competitors out there don't have the facility you do in Bowie, Maryland. Right? It's a nice asset for you to be able to turn things around quickly. If you could just unpack that a little bit for us. As far as, your approach there, what's going into the decisions that you've made and moving quickly, does this potentially allow, a more rapid rebound of those value level two chargers in the second half?

Yes, thanks. So, there's, there's actually a lot to this response. So I will try to be as succinct as I, as I possibly can. So, as you can imagine, we have this debate constantly internally at Blink. Do we build? Do we buy? How do we, what is the right way to come to market with a charger for Blink. And one of the things we've learned, and by the way, sometimes painfully, is that when we utilize a third-party charger, the reliability, the uptime and the control that we have over the quality of that product suffers. So while it's easy to go out and get a third-party charger, put a blank name on it and deploy it into the market, we don't think that that's necessarily the best thing for us. So, then it becomes okay, and by the way, another reason. So, then it becomes, do you build it yourself? You do you get into a third party, a contract manufacturing situation and just speaking to third party cm, the one thing that you always have to be careful of is getting locked into minimum order quantities that are onerous. And I've been through that before in my career and I'm not really in the mood to do that again. So that brings me to, and brings us to most likely continuing on the path that we're on in terms of assembling these chargers ourselves. Now one of the things that's going to help us is that we have expanded our production capacity and capabilities to do finished goods both in India as well as in Bowie, Maryland. So now we have both facilities that are able to produce finished goods. So we have a little bit more flexibility in terms of bringing this new charger into the fold utilizing the capacity and resources that we currently have without having to expand from there. So I hope that answers your question.

That's definitely very, very helpful. That's informative. Last question if I may. You guys are working hard to get to break even on EBITDA, right? I know the market's not helping you, but your actions, you're taking them and those actions always have a cost. Can you maybe talk about salaries and comp and SG&A as far as whether or not those have expenses related to the business spinoff that you're working on? The non-cash compensation has been volatile over the last few quarters. Is that material difference sequentially or year-over-year? Any other one-time items in there as far as expenses for adjustments you're making that we should note?

Yeah, I'll let Michael Rama jump in initially on this and then I can provide some color as well.

Yeah. Hey Craig, I'd say on a non cash you typically have on comp is your share-based comp and we've been running pretty consistent around 900,000 a quarter on an expense standpoint and you could see some of that oscillate up or down a little bit, just depending upon new issuances or investings and all that stuff. But materially from a non cash standpoint, compensation. But you know, we do, we continuously look at our expense profiles and making sure there, there's still cost controls and components expense that we're still integrating a few of the Belgium acquisitions. So once those integrations get completed mid-year this year, we should see a continuation of some savings on the back end. Mike?

Yeah, Thanks. I would just. Oh, sorry, go ahead, Craig.

And the spinoff in particular, I know that does have real costs. I mean and you know, I do know that, you know, restructuring efforts. Right? If you have any detail around those two as far as expenses on the P&L, that would be important?

So regarding the spin off, I mean that, that continues on track. The S1, we have filed the S1, it's obviously in the public domain so anybody can access it and our goal remains unchanged, which is to list the company on NASDAQ. So we're making progress toward that and we'll complete that in some fashion this year. Regarding the rest of the business, which is really, the main, obviously the vast majority of our revenue, our expenses, et cetera. I can tell you that we're taking a lot of action, you know, on that front as well. And you know, an obvious one is compensation expense. But there's really more. There's things like further facilities consolidations there. Our team is doing a good job of renegotiating some big software contracts and things like right sizing our AWS environment and you know, there's really meaningful savings coming from things like that. So as I've mentioned before, there's nothing that is off the table in terms of responsibly reducing costs.

Excellent. Well, with that I'll hop back in the queue. Those margins are impressive. Keep up the good work.

Thank you. [Operator Instructions] The next question is coming from Sameer Joshi, from H.C. Wainwright. Sameer, your line is live.

Thanks. Good afternoon, Michael, Michael. Just digging a little bit deeper into the margins for going forward. I see that the service margins are sort of improving in the 13+ percent range. Is there a targeted or aspirational service margin that you have in mind that you would like to achieve?

Yeah, aspirationally. Mid-20s.

Mid 20s. Okay. And then can you elaborate a little bit more on areas of reducing operating expenses in the context of these new products or new product being launched and efforts to improve the DC fast charging sales, DC fc participation. So just wanted to understand how that would work. Would you not need to spend a little bit more to achieve those results?

I mean, there's always a -- Samir, I think that there's always a cost to product development, but we believe that that's pretty modest with what our team has already spent, is working on and what they're forecasted to spend. So that that's, that's not going to be a meaningful, a meaningful expense. I think though that, as I talked about, it's funny, there's, there's the adage, you can't cut your way to, to profitability, you got to grow the top line. And so, on the one hand, right, we are intensely focused on the expense structure of the company to make sure that it is really efficient and correct for who we are. But really, at the end of the day, what this comes back to is growing the top line. And we're seeing some really, really good progress there. As I talked about last quarter, we have a new head of sales, his name's Chris Carr. He's really, really done some, you know, fantastic work in the, I don't know, 60, 60 days or so that he's been here. And he was, you know, principally behind putting together the Create Energy arrangement. So, you know, we see encouraging things there. And at the end of the day, what we need to do is start growing this company again and making money and making money for the company, making money for shareholders and making money for our employees.

Understood. Thanks for that color. Just last one from me. One of the pillars, the fourth pillar you mentioned was capitalization on market consolidation. Can you elaborate a little bit more on that? Are you, do you have any targets in mind? Are they like similar companies or is it any vertical integration? Just would like to understand what you're thinking along those lines.

Yeah, so first of all, I always have companies in mind. So, we can have this, we can have this call this quarter, the next quarter, the quarter after that. And I will always have, I can promise you I will, I will always have companies in mind. Now in terms of, what, what we can do and what really makes sense for us at this stage of our lives is we are probably looking a little more towards things like tuck-in acquisitions that, that we believe can help us grow faster. So again, we have our eye on a couple, we'll see if they come together, but that's my perspective.

Understood. Thanks for taking my questions and good luck.

Thank you. And there were no other questions in queue at this time. I would now like to hand the call to back to Vitalie Stelea for closing remarks. Vitalie?

Thank you, Paul. And thank you all for tuning into our call today. Please follow our website for additional announcements and also feel free to email us at irblinkcharging.com with any questions you might have. We'll look forward to keeping you updated.