US CPO Blink Charging says it will transition towards a primarily hardware sales business in its upcoming European expansion, placing less emphasis on its traditional owner-operator model.
A push towards greater hardware sales is an opportunity for higher gross margins for Blink, as the service-based owner-operating business leaves the company liable for warranty charges associated with repairs.
"We are moving rather quickly through 2024 to expand our sales operations in Europe. So while we have a high presence of owner operator there, [...] there is also an opportunity on sales that we are restructuring all of our European offices to begin to take advantage of," CEO Brendan Jones says.
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Currently in Europe 75pc of the firm's revenues come from its owner-operator division and 25pc from sales. In the US, 25pc comes from being an owner-operator and 75pc from sales.
Rama insists that juggling the two sales models will give Blink "flexibility...on having to be able to maximise on either side part of the business."
A one-off warranty charge of $1.5mn dented the company's gross margin in Q4.
Playing it safe
On the company's fourth quarter earnings call, HC Wainwright analyst Sameer Joshi noted that Blink's margin guidance of 33pc for 2024 seemed conservative, considering the margin potential for the sales model.
"We intend to get that to 33pc, but it has been our history since last year that when we give guidance, we are making sure that we give it from a conservative and realistic perspective," CEO Jones said in response.
Blink reported fourth quarter revenue growth of 89pc to $42.7mn, as well as full year revenue of $140.6mn for 2023.
Ciaran has written about finance, politics and culture. He is passionate about e-mobility and what it means for our way of life.
Ciaran has a Masters in Ancient Philosophy from Oxford University.
