Brendan Jones: Oh, yeah. So it’s a huge focus of the company. So, I’ve said this before and will continue to say, when we talk about quality, let’s put quality in a whole listing bucket. It’s from everything we say to everything we do to everything we build and everything we maintain. While we had a focus on quality, it was, let’s say, X, and now it’s definitely Y where we talk about it every day. We are fully participating in the U.S. government sub-committee that is looking at charging quality. We’re fully involved in California. Our CTO is taking great steps to make sure that we meet the minimum and plus-plus on what the quality standards that are coming out of both California and out of the federal study that he actually participates in.
And then, we’re working on both downstream quality to make sure that everything about our chargers and the network work. When we look at and we analyze and we break down what the quality issues are, it’s over 85% of all — come in customer connectivity. And it’s either the network, the cellular connection, the screen, or the credential and ID. So, we are eliminating points of contact where possible to make sure when a customer engages with our charger, there’s a limited amount of points of failure. And that’s what the team is doing. And some of this also goes into everyone maturing as a company and make sure that you place chargers in the correct location where they can connect to a network, and that you eliminate the ones that don’t, or when you go into that installation, you come up at a higher budget on your capital expense to enhance the level of connectivity so that there’s no interruption.
And these are all things that Blink is doing. And I should say, the industry, as a whole, is coalesced to improve that level of quality. And the last part of that is you really got to look at your legacy portfolio and you got to make a decision on some of these chargers and especially ones that are owned by individuals that don’t upgrade them. And frankly, you have to be aggressive. You have to take them off the market. And sometimes you have to negotiate with the owner to say, “Hey, we keep getting bad knocks on this, because you won’t buy a new charger or won’t upgrade this.” And those are difficult conversations. But across the board on all those levers, Blink is fully engaged and we are seeing improvement.
Noel Parks: Great, thanks. And another thing is, among some of the startups that are specifically focusing on the commercial market, including some that are looking at, everywhere from delivery to more heavy duty, it does seem that they’re — after what had been maybe a little bit of a COVID era slowdown, it seemed that they were on a pretty good trajectory as far as adoption, large commercial fleets, piloting technology, and so forth. But then it seems in just the last quarter or so we’ve been getting sort of some signs of there being a bit of a chill there as far as end customer is actually pulling the trigger and moving ahead with orders. I just wondered if any of the — you saw any of that filtering down through charger sales, fleet discussions, and so forth.
Brendan Jones: Yeah. We’re — so hands down, the number one uptick right now is fleet. And what we’re not seeing is we’re not seeing an accelerated bookings to revenue fallout, right? It’s remaining flat and in fact it’s improving from what it was before. So, even in 60 and 90 days, 60, 90 and sometimes 180 days out on the time for when you booked it to the one you’re going to get the revenue, we’re not seeing significant fallout in any of those numbers right now. And a lot of that is fleet. You’re one-offs a really quick delivery cycle, the 30 to 60 days. So, it’s your longer commitments and fleet that we’re going to really look at. And those are the commercial ones that you win, the missable ones like the post office. We’re already in our second tranche in the post office and we got so much more to go because that’s 43.5 — 44,500 chargers or something, I might have gotten there off a little bit on that.
I’m thinking about our revenue number again 43 – [$44.3 million] (ph). So, even on that there’s no fall off. We did the first trance, the second trance, so the post office is fully committed. So nothing. And even, we see it uptick [in install] (ph) multifamily dwelling and all these other areas too. So, I’d say from who we’re dealing with and what we’re seeing on the business front, everybody is engaged and it’s an uptick. We’re not seeing much fallout at all in any customer segments.
Noel Parks: Great. Thanks for the detail. Bye-bye.
Operator: Your next question is coming from Chris Pierce with Needham. Please pose your question. Your line is live.
Chris Pierce: Hey, good evening, everybody. Could you just talk about — I know you talked about it on the last call reasons why gross margins might be down sequentially in the second half of ’23, but then they might accelerate in ’24. Can you just kind of refresh our memory on that? I think it was legacy charging equipment that you hadn’t built. And then, you mentioned in response to a question, potentially using a third party to build Level 3 charges. I was just kind of curious why you would want to go down that road again.
