Craig Irwin: Excellent. Well, congratulations on this progress. I’ll go ahead and hop back in the queue.
Brendan Jones: Sure.
Operator: Your next question is coming from Stephen Gengaro with Stifel. Please pose your question. Your line is live.
Stephen Gengaro: Thanks. Good evening, everybody. I guess the first for me is when I look at — and you talked a little bit about this, but when you look at the product sales, the product sales were obviously very strong. And can you talk about where they’re going? Like, what were the big drivers or end markets where the product sales were going that kind of drove it so strongly sequentially?
Brendan Jones: Yeah. So, I’ll break them down in the big categories, right, and one’s going to be a general kitchen sink. So, we continue to have a robust level of dealership in commercial fleet, which is increasing over time. As we started with dealerships, now we’re moving that fleet business beyond dealership into other companies, we’ll have a pretty significant announcement on one of those commercial fleet, and then municipal fleet. Municipal fleet continues — such as the post office continues to be a very, very big opportunity for us. And as I said earlier, it definitely is one deal begets another deal, and if you did a very good job on that, you’re going to get a sales opportunity. When we exploit that fleet channel, both municipal and the commercial fleet, it’s predominantly sales, right?
There are very few owner-operator instances within that. And that adds to that high product sales mix. Now, when we get into the other group, that’s where it’s a mix. And that would be healthcare, which we’re big in. We have a multiplicity of contracts with healthcare organizations all across the United States, from Cleveland Clinic to Lehigh Valley Health to Kaiser Permanente, and I’m probably missing about 10 that the COO would yell at me for not mentioning. But that sends to — looks at, it’s a split between the two. Some want to own them and others want an owner-operator model, and then it’s a 50-50 split on the hybrid model, so which reduces our CapEx involvement. That is another big book of business. And the rest is a kitchen sink of others.
Like, we mentioned the McDonald’s there from the largest franchise. That’s second, we’ll call it the catch-all, which is all those customers that we have. But this need for the sale of the chargers, as we look at, and this gives us a lot of faith for the future, right? When we look at that 30 million charger need, and that’s at 35% pen rate, and we’ve got to keep in mind, California in 2023 is at 22%, so they’re almost — they’re getting towards that number pretty quick on there. That is 28-plus million of them are chargers that are L2 that are designated for multifamily dwelling, they are designated for fleet, they are designated for other municipal fleet and for in-home charging. And that is Blink’s sweet spot. So that is where the sales are coming from today and that’s where we see the sales coming from for the foreseeable future.
Stephen Gengaro: Great. That helps. Thank you. And then, the other thing I was going to ask and I don’t know how granular you’re willing to get, but when we think about sort of an EBITDA positive position by the end of 2024, any ballpark type of revenue — quarterly revenue you need? I mean, I assume there’s cost controls involved, there’s probably some gross margin improvement. Any targets you can give us as far as growth rates needed to get there?
Brendan Jones: Not yet. So, what we’re doing is we began to activate the plan, and it’s very detailed. When we hit the target for the end of the year, which was the first time we gave guidance out as you might remember, right? I was very — we were very nervous doing that, but we did it. It looks like it was the right move to do. We’ll start to analyze everything and then see if we either want to do quarter-by-quarter targets or give general. We’re going to give general guidance, we believe, for the year after we report out the end of the year on 2024, then we’ll assess the need for specific guidance. But you’re right on. When we look at what the levers are, so there’s cost reduction, there’s some personnel reduction due to efficiencies in there and redundancies that are exposed.
There is margin enhancement. There is fee enhancements where we can take pricing [due to] (ph) the market says, “Hey, you can increase and it could be absorbed without any headaches,” all of that is baked into the plan.
Stephen Gengaro: Excellent. Thank you for the details.
Brendan Jones: Sure.
Operator: [Operator Instructions] Your next question is coming from Noel Parks with Tuohy Brothers. Please pose your question. Your line is live.
Noel Parks: Hi, good afternoon.
Brendan Jones: Hey.
Noel Parks: Just had a couple things. Just sort of a general perspective, I was wondering maybe what you’re thinking about, or maybe what you’re measuring around the power of your brand, and the reputation as far as charger availability. Something that clearly — more expansion, people have more experience with different operators, it seems to me those are things that are increasingly going to be important. So, any thoughts you have on that would be great.
