Blink Charging Co. Q2 FY2025 earnings call

• New leadership hires: Chris Carr as Senior Vice President of Sales and Business Development, Michael Bercovich as CFO, Harmeet Singh as CTO, Alex Calnan promoted in Europe. - Second quarter showed strong sequential growth with total revenues up 38% sequentially, product revenues up 73% QoQ, service revenue up 46% YoY. - Acquisition of Zemetric in July, which fills a gap in product portfolio with an intelligent and interoperable AC Level 2 product, and brings new network capabilities. - Progress on BlinkForward initiative to reduce operating expenses, achieving a 22% reduction in compensation expense and $8 million annualized cost savings. - Resolved uncertainty around Envoy subsidiary with an amendment to the merger agreement, releasing Blink from payment obligations and liabilities.

In the second quarter, total revenues grew 38% sequentially. Product revenues saw a 73% increase compared to Q1 2025, driven by strong demand for DC fast chargers and Level 2 Series units. Service revenue was $11.8 million, up 46% year-over-year and 11% sequentially from Q1 2025. Other revenues were $2.4 million, up 47% year-over-year. Product revenue contribution: 73% growth in sequential revenue from DC fast chargers and Level 2 Series units. Service revenue contribution: 46% YoY growth and 11% QoQ growth.

• Expect continued sequential revenue growth in the second half of 2025. - Anticipate lower operating expenses due to disciplined cost management and efficiency initiatives. - Improved working capital practices, particularly in receivables management to accelerate collections and reduce aged balances.

• Market consolidation in the EV charging industry which could impact the company's position. - Margin fluctuations due to product mix, especially with higher mix of DC fast chargers which have lower gross margins.

Q: Good to talk to you, Michael. You had strength in DC fast charging in the quarter, and those typically tend to be materially lower margin than the corporate average. So I was quite surprised to see adjusted margins at 30%. Can you maybe update us on whether or not this margin difference is still material? And what were the puts and takes on gross margins in the quarter?

A: Yes. First, the most important thing is that we see momentum in the business and are growing again. Strong Q2 revenue. Adjusted gross margin was about 30% driven by higher mix of DC fast chargers (lower gross margin profile). As we go forward, DC fast charging sales will continue to grow (high-ticket items), but counteracting that is the Series product line with higher margins and Zemetric product which will help with higher-margin product profile. It depends on mix going forward but we expect margins to remain at historically healthy Blink levels.

Q: Welcome Michael to the team. So just a clarification on the Envoy sort of restructuring or settlement. On the balance sheet, I think there is a contingent consideration of around $23.5 million as of June 30. So this transaction basically gets rid of that and maybe there are some warrant liabilities. But apart from that, that $23.5 million is wiped out. Is that the way we should look at this?

A: Yes. It gets rid of it. This transaction has 2 tails: $10 million in stock being issued and performance-based warrants. There are 3 tranches of $2.5 million, $2.5 million and $6 million at certain performance prices. Once those prices are hit, warrants will convert. The warrants are also limited in time for 20 months from issuance. It's definitely a balance sheet transaction for us.

Q: I just wanted to go a little deeper on Zemetric. I know it's come up a couple of times. But I just want to understand product revenues at Blink have sort of gone one direction. And I guess I just want to understand the product that you felt you didn't have at this point in time and you needed to go out and acquire? Or does this -- do you get charging revenue from this? Or is this just pure equipment sales? Like what should we look for going forward here? And is this something that can be a tailwind to equipment growth? Or is that the wrong way to think about it? Like what's the right way to think about the benefits here?

A: Yes. As we went through 2024, our revenue numbers were going in the wrong direction. One reason was we did not have a cost-optimized charger for the lower end of the market for fleet and multifamily. The Zemetric product fills that. They bring interesting network technology that could weave into the Blink network. It's a combination of product sales and CPO business (network fees). They manage somewhere in the neighborhood of 1,800 to 2,000 chargers in India. We believe we'll capture more fleet and multifamily business with that product. Also, we were able to bring in exceptional talent with the acquisition.