Blink Charging Co. — Q1 2023 Form 10-Q
Reporting period: Three months ended March 31, 2023. Financial statements are unaudited; amounts below are in millions of U.S. dollars unless otherwise noted. Blink sells and operates EV charging equipment and network services, and also operates a Los Angeles electric-vehicle rideshare program.
Financial performance and liquidity
| Metric | Q1 2023 | Q1 2022 / comparison |
|---|---|---|
| Revenue | $21.7 | $9.8; up 121% |
| Gross profit / margin | $4.5 / 21.0% | $1.6 / 16.2% |
| Operating loss | $(30.8) | $(15.0) |
| Net loss | $(29.8); $(0.53) per diluted share | $(15.1); $(0.36) per diluted share |
| Cash used in operations | $(24.2) | $(11.4) |
| Cash and cash equivalents at period end | $103.2 | $36.6 at December 31, 2022 |
| Working capital | $120.5 | $49.0 at December 31, 2022 |
| Debt as presented in MD&A | $40.6 | $40.6 at December 31, 2022 |
Investing activities used $2.2 million, primarily for property and equipment and capitalized engineering costs. Financing activities provided $95.4 million, mainly from a February share offering that generated $94.8 million net proceeds. Total liabilities were $107.3 million; these include $40.6 million of consideration payable and lease liabilities, so the MD&A debt figure should not be read as solely interest-bearing borrowings. Cash plus restricted cash was $103.3 million at quarter-end.
Changes versus prior year
- Revenue growth reflected higher product sales ($16.4 million, up 104%), company-owned charging services ($2.9 million, up 161%) and network fees ($1.6 million, up 911%). Management attributed part of the growth to the Blink UK and SemaConnect acquisitions completed in 2022, as well as organic sales, utilization and network expansion.
- Gross margin improved to 21.0% from 16.2%, but operating expenses rose 113% to $35.4 million. Compensation increased 145% to $22.7 million, and general and administrative expenses increased 92% to $8.5 million.
- Net loss was nearly twice the prior-year amount, increasing by $14.7 million. Management cited higher compensation and general and administrative costs. Operating cash use also more than doubled.
- Foreign-currency transaction gains of $1.8 million supported reported other income; interest expense was $0.6 million. The quarter also included $7.8 million of stock-based compensation in the financial-statement note.
Outlook, risks and other notable matters
- Management said it expects continued operating cash outflows and rising operating expenses, and has not achieved profitability. It expects cash on hand to fund operations for at least 12 months after the financial-statement issuance date, while cautioning that future financing may be needed and is not assured.
- At March 31, Blink had approximately $62.1 million of purchase commitments, expected to be received over the next 12–24 months. It also disclosed approximately $6.4 million of operating and finance lease obligations over five years.
- After quarter-end, on April 18, 2023, Blink completed its Envoy car-sharing acquisition. The stated consideration is up to $35.5 million, comprising $6.0 million cash, $7.0 million in promissory notes and additional potential equity or cash consideration. The acquisition is a subsequent event, not part of Q1 operating results.
- Risk factors include sustained losses, dependence on EV adoption, competition, changing regulation and incentives, acquisition integration, and access to additional capital. The company reported a history of substantial losses and an accumulated deficit of $363.8 million.
- Management concluded disclosure controls and procedures were not effective at March 31 due to previously reported material weaknesses. It cited work on share-based compensation calculations and evaluation of controls at SemaConnect and Blink UK, with remediation expected during 2023.
- Several securities and shareholder derivative lawsuits remained pending. Blink disputed the allegations and recorded no accrual, determining losses were not probable or estimable. The company estimated about $0.3 million to repair deployed chargers and recorded a $0.2 million liability for known warranty-case backlog.
- One customer represented 13% of Q1 revenue; one supplier represented 16% of purchases. Blink reported no hedging of foreign-currency risk.
Important facts for investors to verify
- Whether revenue growth and gross-margin improvement can continue as acquisition contributions, product mix, warranty costs and host-provider fees evolve.
- Cash runway against quarterly operating cash use, planned spending and the $62.1 million of purchase commitments; also review the timing and terms of any further financing.
- The full economic and dilution impact of Envoy’s contingent consideration and promissory notes.
- The status of internal-control remediation and the apparent difference between MD&A’s approximate noncash compensation description and the financial-statement note’s $7.8 million stock-based compensation figure.
- Developments in the pending litigation and whether any future loss becomes probable or estimable.