Blink Charging Co. — Q2 2022 Form 10-Q
Reporting period: Quarter and six months ended June 30, 2022. Unless noted otherwise, financial amounts are in thousands of U.S. dollars. Blink sells EV charging equipment and operates a charging network, alongside charging services and a Los Angeles EV ride-sharing program.
Financial performance and position
| Metric | Q2 2022 | Q2 2021 | Six months 2022 | Six months 2021 |
|---|---|---|---|---|
| Revenue | $11,486 | $4,355 | $21,286 | $6,587 |
| Gross profit | $1,957 | $644 | $3,543 | $740 |
| Gross margin | 17.0% | 14.8% | 16.6% | 11.2% |
| Operating loss | $(21,962) | $(12,345) | $(37,004) | $(19,732) |
| Net loss | $(22,621) | $(13,459) | $(37,764) | $(20,823) |
| Net loss per share, basic and diluted | $(0.52) | $(0.32) | $(0.88) | $(0.50) |
Revenue grew 164% in Q2 and 223% for the first half, led by product sales; the company also cited higher charging utilization, network fees and the acquired businesses. Gross profit improved, but operating expenses rose faster, increasing operating and net losses. Acquisition costs, amortization, higher staffing and other operating costs contributed to the expense increase.
- Cash flow: Operating cash used was $30,986 in the first half, versus $20,945 a year earlier. Investing cash used was $52,233, including $38,338 for SemaConnect and $11,360 for Electric Blue, net of cash acquired. Financing cash used was $214. Cash and restricted cash ended June at $89,266.
- Liquidity: Cash and equivalents were $85,136, working capital was $84,801, and current assets were $124,175 against current liabilities of $39,374. Cash and equivalents had declined from $174,795 at December 31, 2021.
- Debt and obligations: Notes payable were $775. The SemaConnect acquisition included $40,600 of deferred cash consideration bearing 7% interest, payable no earlier than nine months and no later than three years after closing. Total liabilities were $90,915; this includes $45,? million of consideration payable and contingent consideration. The filing lists consideration payable of $44,658 and contingent consideration of $3,514.
- Balance sheet and dilution: Total assets were $383,507, including $156,092 of goodwill and $75,412 of net intangible assets, largely reflecting acquisitions. Stockholders’ equity was $292,592. Shares outstanding increased to 50.2 million from 42.4 million at year-end, principally including 7.45 million shares issued for SemaConnect.
Material changes and transactions
- Blink acquired Electric Blue Limited on April 22 for fair-value consideration of $18,903, comprising cash, shares and estimated contingent consideration. It acquired SemaConnect on June 15 for $200,573, including $113,837 in Blink shares and deferred cash consideration.
- The acquired businesses contributed only post-closing results to reported revenue: Electric Blue contributed $1,362 in revenue and a $743 net loss; SemaConnect contributed $1,414 in revenue and a $194 net loss. These short periods are not comparable to full-period results.
- As of June 30, Blink reported 51,073 chargers sold or deployed; 37,184 were in Blink’s networks, including 2,480 awaiting commissioning.
- Q2 included $3,216 of acquisition-related costs; first-half acquisition-related costs were $3,274. The company also incurred $1,313 in first-half costs for upgrades from 2G/3G to 4G LTE, with about $1,200 of upgrade costs remaining for certain owned and operated stations.
Outlook, risks and unusual items
- Management said cash on hand was expected to fund operations for at least 12 months from issuance of the financial statements. Blink has not achieved profitability, expects continued operating cash outflows and higher operating expenses, and said further financing may be needed; availability and terms are not assured. No quantified revenue or earnings guidance is provided.
- Management expects charging demand to increase as economies recover, but said it could not predict the effects of COVID-19, chip shortages and supply-chain delays. Other cited risks include competition, EV adoption, regulatory or incentive changes, acquisition integration and geopolitical disruption.
- Purchase commitments were approximately $41,127, including about $10,772 with a related party, expected to be fulfilled over 12–24 months. The filing also disclosed a related-party equipment supplier tied to Blue Corner management.
- Several securities and derivative shareholder lawsuits remained pending or stayed; Blink recorded no accrual because it assessed any loss as not probable or not estimable. A separate director-compensation case was settled, with $190 of plaintiff legal fees paid and changes to director compensation practices.
- Management concluded disclosure controls were not effective at June 30 because previously reported material weaknesses continued to exist. Remediation actions were underway, with operational testing planned for the third and fourth quarters of 2022.
- After quarter-end, executives received performance-based restricted-stock awards totaling 590,458 shares, valued at $12.5 million on the grant date, subject to performance hurdles.
Important facts for investors to verify
- How much of reported growth reflects underlying demand and utilization versus acquisitions, and whether acquired businesses can be integrated and meet targets.
- The company’s cash-burn trajectory, cash runway, and timing and cost of the $40,600 deferred SemaConnect payment and other acquisition obligations.
- Whether gross-margin improvement is sustainable as product mix, host revenue shares, warranty costs and supply-chain expenses change.
- Execution of charger commissioning and 4G LTE upgrades, and fulfillment of the $41,127 purchase commitments, including related-party commitments.
- Progress in remediating material weaknesses, and the status and potential financial exposure of disclosed litigation and contingent consideration.
Note: The filing’s financial statements report Q2 and first-half revenue of $11,486 and $21,286. A revenue-recognition note separately presents $11,361 and $21,086, excluding grant and rebate revenue; the summary uses the statements of operations totals.