Brendan Jones: Yeah, I think it’s a reasonable assumption to say that some but not all of the growth will go in parallel to EV sales. But as you — we also know that as we’re moving more into energy services and SaaS options such as load management, building management, load curtailment, integration into microgrids, et cetera, those are different services will provide standalone revenue as part of the overall package of network services. So the SaaS end of the business is going to continue to grow. And we can only say what we’re working on right now, what I just outlined, but we expect that new things in the future may come in to energy management. Internally, we have a whole task force and strategy group that’s focused on energy management as a standalone item.
And we believe that we’ll see more out of that particular channel in the future. And then there’s going to be other SaaS things. Since we manage our own network and we deliver other software services and it’s our development center in the US, Europe and in India, the SaaS applications will continue to grow. So, Michael Battaglia, any other comment on that?
Michael Battaglia: No, I would just add that one of the beautiful things about Blink is that we approach the market where the market is and where the customer is and what the customer wants. And we keep going back to this, but our business models enable us to do that. So when we think about the mix between product sales versus owner operator, things like that, that’s largely going to follow the market opportunities. That said, the focus of the organization is on repeatable, high margin, recurring revenue. So that, as we know, is more directed towards things like service, it’s things like Blink-owned owner-operator chargers out in the field. So our focus always is that. But we will continue to deliver to the market what the market’s asking of us.
Stephen Gengaro: Great, no, that’s good color, gentlemen, thank you.
Operator: Thank you very much. Your next question is coming from Sameer Joshi of H.C. Wainwright. Sameer, your line is live.
Sameer Joshi: Great, thanks. Good afternoon, everyone. Thanks for taking my questions. Just if you could give us a little bit more insight into your developments on the energy management solutions. I know you referenced it for the previous question, but should we expect these to be standalone or grid adjacent applications or charging adjacent applications?
Brendan Jones: Yeah, so I’ll answer, Sameer, first at about a 30,000 foot view and Mike might give you some more color commentary. So it’s a two-staged — it’s a two-faceted approach. There’s European energy management service and US energy management service primarily as we’re looking at it. The needs in Europe are actually significantly different at this point in time than the needs in the US. So the team is already developing these features and benefits. I’m not going to give you a release date yet because that would be premature, but we already have some of them in place today. And on top of that, we’re adding to fleet management services. So, they’ll be standalone in terms of — you have to have the network to activate them in most cases, but they will fit into either model that we do.
You can do them on the owner operator, the hybrid model, or the sales model, and one will benefit Blink and the other will benefit the customer. So their application, it has to be with the network. So it wouldn’t be standalone as the piece of software that you can buy right now. At first, it’s going to help to service the network and generate business. Because what we’re seeing in the RFPs that are coming out, you have to have these in order to win the business. And that business that we’re seeing is part of a full-service RFP for full-service — for the chargers, for the network, for the installation, for the energy management, all wrapped into one. Mike, any additional on that?
Michael Rama: No, Brendan, I think you covered it nicely.
Sameer Joshi: All right, thanks.
Brendan Jones: Occasionally, the CEO is smart, right? Occasionally.
Sameer Joshi: Just another question, and this was also referenced earlier, but it seems the product margins are nearly 40% this quarter. Are there further — is there further move to improve these margins going forward and is that sort of a part of your getting to a positive adjusted EBITDA by the end of this year?
Brendan Jones: Well I certainly hope we can improve them. I don’t want to commit to anything just yet. As you know we’re — we continue to be conservative so we can meet expectations properly as a company. Yeah, we do have some. We’re not seeing a lot of commoditization in the commercial space as of yet, and we are seeing an uptick in the need for quality product. But we also have to balance that, again to the needs for DC fast chargers which ebb and flow a little bit more. And when you have higher orders on the DC side, you do reduce some of your margin. Now, we are — we’ve already succeeded in some margin protecting activities. The first was bringing on our DC 9 charger which we produce ourselves and we have a higher margin on that but we’re working on our own DC fast charger but we’ll have that made by a third-party manufacturer.
So if the balance is primarily L2 and those are the commercial chargers that we’re very adept at building, yes, you’ll see improvement. But on the whole, we have to be a little conservative. While we’ll move to 80% vertical integration when we convert European L2s over to Blink manufacture, we’ll still have a lot of high revenue DC fast chargers moving out and those won’t be at those high margins that we have the L2. Michael, I might have convoluted that a little bit. Any color or commentary or clarification on that?
Michael Rama: I could jump in, Brendan. Actually, I have just a couple of quick comments on that. So one is we have a couple of different levers that we can pull in terms of margin expansion. One of them is SKU consolidation which we’re working on. So simplifying in order to sell more of fewer SKUs for economies of scale, purchasing power, things like that. The second is, while we have our manufacturing facility in Bowie, Maryland that’s providing Buy America compliant chargers, we also have the ability to produce finished goods in India. And that represents another lever we haven’t pulled yet for margin expansion of our L2 product line. So there are a couple of different things that we can do to continue to work on that. I think as Brendan indicated, we’re holding to our guidance. We had a good Q1, and so we’ll see where that takes us.
