Blink Charging Co. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024. Financial amounts below are in millions of U.S. dollars unless stated otherwise. Blink manufactures, owns and operates EV charging equipment and networks, and also operates EV car-sharing services.
Financial performance and liquidity
| Metric | Q1 2024 | Q1 2023 / prior period |
|---|---|---|
| Revenue | $37.6 | $21.7; up 73% |
| Gross profit / margin | $13.4 / 35.7% | $4.5 / 21.0% |
| Operating loss | $(17.5) | $(30.8) |
| Net loss / diluted loss per share | $(17.2) / $(0.17) | $(29.8) / $(0.53) |
| Operating cash flow | $(21.5) | $(24.2) |
| Cash and cash equivalents, March 31 | $93.5 | $121.7 at December 31, 2023 |
| Working capital | $130.5 | $152.0 at December 31, 2023 |
| Reported debt | $6.8 | $38.1 at December 31, 2023 |
Revenue growth was led by product sales, up 68% to $27.5 million, and charging services from company-owned stations, up 74% to $5.0 million. The company reported 35.7% gross margin, compared with 21.0% a year earlier. Operating expenses fell 13% to $30.9 million, including lower compensation, but the company remained loss-making. Average basic shares outstanding increased to 99.9 million from 56.5 million, making dilution relevant when assessing the per-share improvement.
Operating cash use remained substantial. Investing activities used $2.8 million; financing activities used $6.7 million, including $31.4 million to repay the SemaConnect note, partly offset by $25.1 million of net ATM proceeds. Cash declined by $28.2 million during the quarter. Subsequent to quarter-end, Blink repaid a further $6.8 million of Envoy-related notes payable.
Material changes and notable items
- Revenue increased across product sales, charging services, network fees, warranty, grants and rebates, and car-sharing. The filing attributes part of car-sharing growth to Envoy, acquired in April 2023.
- Cost of revenue increased 41% to $24.1 million, slower than revenue growth. Host provider fees rose 85%; depreciation and amortization within cost of revenue more than doubled to $1.7 million.
- Compensation expense declined 34% to $15.0 million, with management citing personnel reductions and acquisition integration synergies. Other operating expenses rose 53% to $6.4 million.
- The company recorded a $1.7 million expense from an increased fair value estimate of consideration payable related to the Envoy acquisition. It also recorded an estimated $0.6 million loss on the planned sale of underperforming subsidiary assets.
- Blink sold 8.18 million shares through its at-the-market program for $25.7 million gross and $25.1 million net proceeds. It had sold approximately 39.65 million shares under the program since inception through March 31, 2024.
- As of March 31, Blink reported 94,476 chargers sold or deployed, including 77,157 in the Blink Networks; 21,232 network chargers were pending commissioning. Blink owned 5,832 network chargers.
Outlook, risks and contingencies
- Management said existing cash was expected to fund operations for at least 12 months after issuance of the financial statements. Blink has not achieved profitability, expects continuing operating cash outflows, and says significant product revenue growth is needed to reach profitability. Management also cautions that future financing may not be available on acceptable terms.
- The company’s liquidity plan includes improving gross profit through product optimization and acquisition integration, and reducing expenses; management gives no assurance these measures will succeed. No specific revenue or earnings guidance is provided.
- Purchase commitments were approximately $20.5 million, expected to be received over the next 12–24 months. The filing estimates approximately $11.1 million of operating and finance lease obligations over the next five years.
- On April 30, 2024, Blink agreed to sell installed and inventory charging units and associated agreements of an underperforming subsidiary; closing was expected in Q2 2024. Blink also began plans to sell a Miami Beach office building, carried at $3.7 million.
- Following mediation, the parties in a securities class action agreed to settlement terms subject to final documentation and court approval. Terms were confidential; the company estimated its remaining insurance retention at payment would be less than $0.1 million. Several related shareholder derivative suits remained pending or stayed, with no accrual recorded because losses were considered not probable or estimable.
- A former officer’s company filed an arbitration demand seeking commissions; Blink disputes that any are owed and said no material adverse impact was currently expected. The company also estimates approximately $0.7 million to repair deployed chargers it owns.
- Management concluded disclosure controls were ineffective due to previously reported material weaknesses in internal control over financial reporting. Remediation efforts continued, including evaluation of Envoy controls.
- Key business risks include EV adoption and demand, competition, regulatory and incentive changes, acquisition integration, foreign exchange exposure, and the need for additional capital. Blink does not hedge foreign-currency risk.
Important facts for investors to verify
- Whether revenue growth converts into sustained gross-margin improvement and lower cash burn, rather than continued reliance on equity financing.
- The pace of charger commissioning and utilization, and the economics of company-owned versus host-owned deployments.
- Progress on expense reduction, acquisition integration, the subsidiary asset sale, and the planned office-building sale.
- Cash runway assumptions, remaining ATM capacity and potential dilution; also reconcile reported share counts, which differ between the balance sheet, equity statement and cover-page date.
- Settlement approval and insurance coverage, outcomes of other legal matters, and remediation of the disclosed material weaknesses.