Q4 2023 Blink Charging Co Earnings Call
Participants
Vitalie Stelea; Vice President of Investor Relations; Blink Charging Co
Brendan Jones; President and Chief Executive Officer; Blink Charging Co
Michael Rama; Chief Financial Officer; Blink Charging Co
Chris Pierce; Analyst; Needham & Company Inc.
Stephen Gengaro; Analyst; Stifel Nicolaus and Company, Incorporated
Craig Irwin; Analyst; ROTH MKM
Sameer Joshi; Analyst; H.C. Wainwright & Co., LLC
Noel Parks; Analyst; Tuohy Brothers
Presentation
Operator
Good day, ladies and gentlemen, and welcome to the Blinkx charging Company Fourth Quarter and Year End 2023 earnings conference call. At this time, all participants have been placed on a listen-only mode and the floor will be open for questions and comments following the presentation. It is now my pleasure to turn the floor over to your host, fatalities, Dahlia Vice President of Investor Relations. Sir, the floor is yours.
Vitalie Stelea
Thank you, Allie, and welcome to Blaise Fourth Quarter 2023 earnings call. On this call today, we have Brendan Jones President and Chief Executive Officer, and Michael Rama, Chief Financial Officer.
Today's discussions will include non-GAAP references. These are reconciled to the most comparable U.S. GAAP measures in the appendix of our earnings deck. You may find the deck along with the rest of our earnings materials and other important content on Blinkx Investor Relations website.
Today's discussions may also include forward-looking statements about our expectations. Actual results may differ from those stated. The most significant factors that could cause actual results to differ are included on Page 2 of the fourth quarter 2023 earnings deck. Unless otherwise noted, all comparisons are year-over-year.
Now regarding the investor relations calendar, Blaine will be participating in taking and taking one-on-one investor meetings at a few upcoming conferences. The first one will be the Roth MKM Investor Conference in Dana Point, California on the 17th of March. The second one will be JPMorgan Energy Conference on the 17th of June in New York City. Please follow our announcements and the Investor Relations website for additional events that we will book in the future. I will turn the call now over to Brendan Jones President and CEO of Blink charging. Go ahead, Brendan.
Brendan Jones
Thank you, Mitali, and good afternoon, everyone. Thank you for joining us on this call today.
Well, just to sum it up 2023 was a historic year for Boeing. It was marked by significant achievements and exponential growth. Now, as some of you know, Blinkx over the past four years has successfully integrated six strategic acquisitions. And in 2023, we began to demonstrate the powerful consolidated potential of the Blinkx enterprises. Now not only did we leverage our advanced product portfolio and services but we also began to see tangible benefits from our newly enhanced network launched in 20 and 2022. Organizationally, we are emphasizing a culture of continuous improvement and have begun to observe synergies and efficiencies that positively impacted 2023 results across all of our businesses. Operationally, we streamlined our sales, engineering, logistics and distribution while expanding our manufacturing footprint near Washington, D.C. to capitalize on additional synergies and opportunities for cost optimization and a little more on that later in this presentation.
Now if we move to the numbers, as illustrated on slides 4 and 5, our total revenues were $140.6 million, marking an impressive year over year growth of 130% and a remarkable sevenfold increase compared to 2020 20 revenues.
Now let's let's let's talk about that. Again, sevenfold increase in just two years. Our fourth quarter 2023 revenues were a Q4 record of $42.7 million, representing a year-over-year increase of 89%. Our 2023 service revenues grew at 111% year over year amounting to $26.4 million. Now within this figure, network fees grew 71% to $7.5 million, and Q4 2023 service revenue reached $7.9 million now and even better news from a financing perspective.
If you flip to slide 6, we previously discussed raising additional funds to guide Boeing towards profitability. I am pleased to announce that we substantially strengthened Blinkx balance sheet by raising $113 million in gross proceeds via our existing ATM facility. We took advantage of favorable market conditions and did it opportunistically at scale and in a very, very cost-effective way. As a result, we delevered our balance sheet and significantly reduced our interest expense by paying off promissory notes and accrued interest of $45.5 million. With our current visibility, we anticipate that our existing cash balance will be sufficient to reach our positive EBITDA adjusted rate target in December of '24 and beyond.
If we then look at slide 7, for full year 2024, we are targeting revenues between $165 million to 175 million and the gross margin of approximately 33%. We are also reconfirming our target of achieving positive adjusted EBITDA run rate by December of 2024.
Now let's jump over to slide 8, we show the different actions that we continue that continue to make it materialize. That will continue mineralized excuse me, and 2024 to achieve our adjusted EBITDA target sourced solid revenue growth is expected to contribute significantly to adjusted EBITDA. We emphasize not only the sales quantity, but also the quality of new customers, especially fleets as they play a crucial role in financing our company's growth during 2023, we saw important fleet wins in the United States, including the post office and that Mack Trucks, different name a few. We also prioritized revenue generated from our existing customers as an optimal way to finance growth. Second, we anticipate gross margin improvements as we continue to in-source a large portion of our product. Our decision to expand our Boise, Maryland facility aligns perfectly with our growth strategy, and we are very pleased to have the facility open with production underway.
Third expense management and cost avoidance are currently underway throughout the entire company. We've also implemented a leading software tool to assist in planning the planning and monitoring expenses at all levels of the company. We are pleased with this capability as it enables robust scenario planning and accountability for every department. And finally, we anticipate the EV market to maintain its recent momentum, benefiting not only Blinkx, but more importantly, the entire industry.
If we move on to page now, despite various medias media stories, we remain very optimistic about the EV market and the continued growth. This optimism is fueled by the decreasing cost of electric vehicles and the continuous expansion and improvement of charging infrastructure. The network effect is now taking hold.
Now look at the numbers. In 2023, EVs accounted for one of every five vehicles sold globally in the US. In 2023, we saw an increase in EV adoption, accounting for 8% of all new cars sold within the United States.
Now if we look at California, EVs represented 25% of all new car sales. To provide context, Bloomberg New Energy Finance anticipates EV penetration in the U.S. to reach approximately 13% in 2023, marking a significant 500 basis points in that expansion and Just One Year now in Europe, another region where we are active and have three different offices. The EV penetration rate throughout the entire European concept stood at 18% of car sales. But if we start to split this up and look at various countries, France, UK, Ireland, Germany, the Netherlands and Belgium, the percentage is much higher. This figure is projected to rise across both Western and Eastern Europe at about 22% in 2024 with a target of 80% by 2030. And we know that's a big number, but it's really not that far-fetched. As many of you may know, about 90% of all all cars sold in Norway are V. Several larger European countries are closely monitoring this trend and we at Blink are actively studying and adapting to this evolving landscape.
Now let's turn to Page 10. The proliferation of EVs globally requires rapid improvement in EV charging infrastructure. According to Mackenzie's new data the United States is projected to have over $28 million chargers by 2030, and that's from a bit over $4 million today. The global market is expected to grow at a 25% kegger through 2030. And the investment required for this is expected to be about $260 billion. And if you look across all major research done in this area. It doesn't matter whether it's Mackenzie, PricewaterhouseCooper or Bloomberg. Most chargers are expected to be Level two chargers because drivers will mainly charge vehicles where the vehicle will idle most of the time this is backed by the US Department of Transportation, which shows that on average vehicles said about 95% of the time on page 11 in terms of deployments. Since Blinkx inception, we have sold contracted or deployed 89,825 charges. 78% of this is in North America with the majority of the remaining charges are in Europe.
Now on to slide 12, you will see images of our advanced product portfolio. Today, we can satisfy the demands of any customer from a product and software perspective, our versatile Level two chargers are used in multiple commercial, residential and fleet applications. At the same time, we have made significant strides with our GC. fast chargers, as you can see on the lower left section of the slide. And importantly, our chargers already support the North American charging standard formats, which we believe will only benefit Blinkx as more drivers will be able to easily access Blink chargers and charge on our chargers. And of particular note, just this week, we celebrated the grand opening of our new manufacturing facility near Washington, DC, which will further drive our gross margin expansion while improving product quality and reliability. Federal, state and local government officials were present to celebrate with us this significant milestone. And if you look at slide 13, we look forward to supporting government programs when it comes to electrifying their fleets and providing EV charging infrastructure in their jurisdictions.
Now the production that is underway at the facility and bond that is the latest lean manufacturing practices, focusing on efficiency and continuous improvement. We anticipate that it will support an annual production capacity of up to 50,000 chargers and has been designed for flexibility to adapt to our future products and manufacturing needs now of a new announcement. In addition to the manufacturing facility. We have established our global headquarters at the same location near the nation's capitol. We believe this offers multiple benefits. It brings us closer to our manufacturing operations allows for better team engagement and brings us closer to some of our largest customers. Furthermore, being located near policymakers involved in shaping the federal government's transition to electric vehicles is advantageous as we continue to play a pivotal role in this transformative journey.
Now if we go to slide 14, over the years, Blinkx was able to acquire a number of prominent customers and collaborations with some of the largest fleets globally, automotive companies, commercial and multifamily real estate enterprises as well as prominent hospitality venues in 2024 and beyond will be added to this list of prominent customers.
Now with this, I'm going to turn the presentation now over to our CFO, Michael Rama, to give you some additional financial detail. Michael?
Michael Rama
Thank you, Brendan, and good afternoon, everyone. Turning to slide 16, our Q4 2023 revenues grew 89% year over year to $42.7 million, another record fourth quarter for Blinkx total revenues for 2023 was an absolute record at $140.6 million, a 130% increase compared to $61.1 million for the full year of 2022. As Brendan mentioned earlier, only two years ago, our 2021 full year revenues were nearly $21 million, which represents about 15% of current 2023 full year revenues of $140.6 million. Now product revenues for the fourth quarter of 2023 were $33.4 million, an increase of 112% over the same period in 2022. Product revenues for the full year of 2023 were $109.4 million, an increase of 138% when compared with full year 2022. These increases were driven by strong demand for our commercial level two chargers and TC. fast chargers as well as our ability to satisfy increasing levels of demand.
Fourth quarter 2023 service revenues, which consist of charging service revenues, network fees. Car sharing revenues were $7.9 million, an increase of 40% compared to the fourth quarter of 2022 full year 2022 to a full year 2023. Service revenues more than doubled to $26.4 million, representing a year over year growth of 111%, driven by greater utilization of our chargers, increased number of charges on Blinkx networks and revenues associated with the Blinkx mobility car-sharing program. We break out these service revenue lines to differentiate between products and service businesses. More accurately.
Now turning to gross profit. Gross profit increased 63% to $10.6 million or 25% of revenues in the fourth quarter of 2023 compared to gross profit of $6.5 million or 29% of revenues in the fourth quarter of 2022. Gross margin decreased in the fourth quarter of 2023 when compared sequentially to the third quarter 2023 due to increased year and warranty and maintenance expenditures as well as adjustments related to discontinued components.
Now excluding the impact of these items, the gross margin for Q3 of Q4 2023 would have been approximately 30%. Gross profit for the full year of 2023 increased by 172% to $40.2 million or 29% of revenues compared to gross profit of $14.8 million or 24% in the full year of 2022. Gross margin for the full year of 2023 increased when compared to the full year of 2022, primarily due to higher mix of in house manufactured units, which carry a higher margin and increased utilization of charge.
Now turning to operating expenses. Operating expenses in the fourth quarter of 2023 decreased 16% to $28.7 million compared to $34.2 million in the fourth quarter of 2022. While we grew quarterly revenues by 89% year over year. Most of the decrease in operating expenses was driven by a 27% reduction in year-over-year compensation expense of 20 for 2023. Operating expenses for the full year of 2023 was $239.9 million compared to $104.1 million for the full year of 2022. The increase in operating expenses for the full year is primarily driven by $105.9 million related to a noncash goodwill and intangible assets impairment charge as well as the impact of one-time nonrecurring payments to our former CEO and a non-recurring item relate to the performance milestones achieved by our CTO relate to the design and launch of Linx recently implemented new networks. It is very important to mention here that these impairment charges are non-cash, and they do not impact our operations in any way, shape or form excluding the impact of the $105.9 million non-cash impairment charge and onetime compensation-related items, the operating expense for full year 2023 would have been $134 million. Now as a percentage of revenues, this amount represents a reduction of approximately 7,500 basis points, while revenues increased by 130% year over year of note, 2023 operating expenses include $3 million of expenses for our 2023 acquisition of envelope.
Now, adjusted EBITDA for the fourth quarter of 2023 was a loss of $14 million compared to a $14.8 million in the prior year period. As a percentage of revenues, our adjusted EBITDA metric improved nearly 3,200 basis points compared to Q4 2022. This is a 50% improvement year over year, reinforcing our trajectory to positive adjusted EBITDA run rate by December of this year.
Adjusted EBITDA for the full year of 2023 was a loss of $57 million compared to an adjusted EBITDA loss of $60 million, $60.3 million in the full year of 2022. The adjusted EBITDA for the three and 12-month periods ended December 31, 2023, exclude the impact of stock-based compensation acquisition related costs, onetime nonrecurring expenses, non-cash impairment charges and non-cash loss on extinguishment of notes payable. As Brendan mentioned earlier, several factors are expected to give get us to positive adjusted EBITDA run rate by the end of this year, including revenue growth, expense management and cost avoidance actions that are materialized based on our actions to rationalize our operations, consolidate facilities and support functions and build scale can tailor my manufacturing and sales process.
Earnings per share for the fourth quarter of 2023 was a loss of $0.28 per share compared to a loss of $0.55 per share in the prior year period. For the full year 2023 earnings per share was a loss of $3.21 per share compared to a loss of $1.95 per share for the full year of 2022. Please note that the impact of the non-cash accounting adjustments to our goodwill intangible assets, combined with the one-time compensation charges to our CTO and former CEO. negatively impacted year to date earnings per share by $1.60. Now, adjusted earnings per share for the fourth quarter of 2023 was a loss of $0.28 compared to adjusted earnings per share loss of $0.41 in the fourth quarter of 2022. Adjusted earnings per share for the full year 2023 was a loss of $1.42 compared to an adjusted EPS loss of $1.65 in the full year of 2022. Non-gaap adjusted earnings per share is defined as adjusted net income, which excludes the impact of stock-based compensation, acquisition-related costs, onetime nonrecurring expenses, non-cash impairment charges and non-cash loss on extinguishing of notes payable divided by the weighted average shares outstanding.
Now turning to slide 17, you can see that Blinkx has made tremendous progress in growing our revenue base over the last two years. Our revenues grew 671% in just two years at the same time, we have more than doubled our gross margin from 14% in 2021 to 29% in 2023 and currently target targeting our gross margin of approximately 33% for 2021.
Now moving to our cash position. As of December 31, 2023, cash and cash equivalents totaled $121.7 million, an increase of $85 million compared to December 31, 2022, and $55 million compared to the $66.7 million at September 30, 2023. In the fourth quarter of 2020 2023, we raised $88 million in gross proceeds via the existing ATM. Furthermore, during the first quarter of 2020 forced. We raised gross proceeds of an additional $25 million via the ATM in total between November 20, 2023 and February 12th, 2020, for Blinkx raised $113 million in gross proceeds via the existing ATM. We accessed the market opportunistically at scale and at a very cost-effective terms for blink and as a result, we were able to pay off promissory notes and accrued interest in the amount of $45.5 million, which delevered the balance sheet to our significant to avoid significant ongoing interest costs as well as accelerate Link's path towards profitability. We are very pleased to have closed fiscal 2023 with record fourth quarter and record full year results. We believe the charging and infrastructure industry is that inflection point and we're building solid foundation for BlueLinx continued and more importantly, profitable growth.
I will turn the call back over to Brendan for some. But first final commentary. Go ahead, Brendan.
Brendan Jones
Thank you, Michael.
So I think you all can see that without a doubt, 2023 marked a truly transformative year for Blinkx. We couldn't be prouder of our team and the accomplishments for the year of 2023. But we said a lot today.
So let's recap really quickly here and get to the more salient points. Our revenues surged to over $140 million, accompanied by an industry-leading gross margin of 29% in 2023. Additionally, as Michael just iterated, we took advantage of favorable market conditions and capitalized billing by raising $113 million in cost effective financing.
We significantly reduced our debt obligation and the burden of interest expense on free cash flow. Now we didn't just do that. But then when you go further at the operational level, if you look at slide 19 and 2023, we materially expanded our U.S. manufacturing with the recent grand opening of our facility near the nation's capitol. This allowed this allowed and is allowing blank to consolidate five of our U.S. facilities down to two, while increasing production from a operating in logistics and network perspective, we further consolidated, we also consolidated sales of back office functions to reduce operating expenses and improve efficiencies.
And then the last one is we have integrated and rebranded our legacy companies have electric blue and Blue corn or who are now Blinkx UK and bling Belgium and we're not done yet as we move into 2024. The team is laser focused on the targets we have laid out in front. And the number one target is achieving adjusted EBITDA run rate by the end of 2024.
Now if we look at what else we're going to do in 2024, it's all listed out on slide 20, we will continue to drive global efficiencies to optimize manufacturing, logistics, distribution and facilities and back office consolidation. We will execute our cost reductions and avoidance strategies, leverage, expanded manufacturing facilities to support growth, reduce COGS and enhance international product portfolio. We will launch a new multi market maintenance and service and proactive monitoring network to improve uptime, N-Charge quality and reliability and we will continue to invest in innovative technologies to improve efficiency and promote continued growth. These tactical and strategic moves will provide Blinkx with the necessary flexibility to achieve our positive adjusted EBITDA run rate by December of 2024, and this is fundamental to Blinkx long term success.
Finally, our success in '23 wouldn't be possible without the outstanding team we have in place, and we thank each and every one of them across the entire organization for their tremendous effort this year.
As you might imagine, the team is excited about Blinkx future, and we look forward to updating you throughout 2024 as we continue to make progress.
With that, the call is now open for questions.
Question and Answer Session
Operator
Thank you. Ladies and gentlemen, the floor is now open for your questions. If you have any questions or comments, please press star one on your phone. At this time. We ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. Please hold while we poll for questions. Frankie?
Our first question is coming from Chris Pierce with Needham. Your line is live.
Chris Pierce
Yes, just two for me. We are an industry leader on their earnings call a couple of weeks back talked about seeing their customers thinking about moving towards a dual sourcing model and kind of having multiple charges from multiple brands on site. Is that helping that gives you confidence in the growth to triple your production capacity I believe, had that already been contemplated in the model?
Or is there something new that's additive to kind of how you're thinking about the future?
Brendan Jones
Yes, it's an enhancement. So it wasn't in the original math when we agreed to expand Buly. But certainly, you know, now we're calculating it in. So we see that as added benefit over time.
Chris Pierce
Okay. And then you're guiding at the midpoint to roughly 20% revenue growth. I just want to kind of how do we square that with the tripling of capacity kind of one seems a little more aggressive. One seems a little more conservative. I just want to kind of what's the right way to think about that.
Brendan Jones
Michael, you want to handle that and sure enough.
Michael Rama
And we're we've built our budgets from the group from the ground up, and we're just we're factoring in obviously, like to be conservative where we, as you know, we're conservative in nature and as we head into 2024 as we navigate through some some noise, but we feel confident that that range is most appropriate for what we feel is up to start to start up the year.
Chris Pierce
Okay. Thank you.
Operator
Thank you. Our next question is coming from Stephen Gengaro with Stifel. Your line is line.
Stephen Gengaro
Thanks. Good afternoon, everybody. Two for me and one to follow up on the question, Chris just asked when we think about the revenue guide for '24 and we think about kind of what the industry is seems to be going through right now just from a adoption rate with Aldagen of data points have been have been a little more negative. But And notwithstanding that and your and your comments on the guide, how how would you classify like '24, '25, '26 like we should we think about that underlying category that you that you illustrated in the presentation in the mid 20s as kind of a baseline that is that a good place to start?
Brendan Jones
If So kind of think about that impact on overhead and R&D and progression, you know, it's a good place to start. Now you're going to you see different accelerations in different places we operate, especially outside the United States right now.
You know, of course, we see we want to gain for larger numbers, right? We want to make sure we have the capacity to take care of what is going to happen in the space and not just the capacity, but the ability to produce at a high margin. So we're going to be, as Michael said, we're going to be a little conservative and numbers, but we're basing those off of real data.
We don't make a decision that look at it without looking at what the analysts are saying, whether that analysts and Mackenzie or another analyst looking at what they see as industry growth, then we cross supply that with where we're active and then we look at the segmentation and see, okay, where is our greatest opportunity to expand revenue.
And then thirdly, the other leg of that is when we're looking at our own internal functions, what are our other revenue opportunities as we continue to grow and scale the industry, but we think 165 to 175 is healthy. And that, as you know, we're going to have a lot of work to do and that and that's going to enable us to grow our margins as well.
Stephen Gengaro
Thanks. And then a follow-up was at CVS. So week this week, when you think about that facility ramping and you have that you've consolidated your centralized warehouse and production, et cetera. How should that impact underlying product margins over the next three years?
Brendan Jones
It's going to have a positive impact, as you imagine, we've done a couple of different things, right? So we had five facilities, one in Miami. We had actually four in the greater Washington D.C. metro area.
We've now consolidated all those to two. And with that, we've also been able to reduce overhead across the board at all those. So we're anticipating a positive margin impact for that. But we haven't crystallized those numbers yet. So we haven't had a range. And that's something that you're going to see manifest in the Q1 report, which is looking really good and Q2 and Q4.
Stephen Gengaro
Okay. Thank you for the details.
Vitalie Stelea
Operator, the next one question, please.
Operator
Sorry, sir. My line was muted by mistake. And the next question is from Craig Irwin with ROTH and Kim, your line is live, sir.
Craig Irwin
Good evening and thanks for taking my questions. More and more on the housekeeping side, can you maybe update us on your DC fast charger portfolio, where are we at as far as the new product introductions that you are planning? And Dan, can you can you maybe break out for us what the contribution was in 2023? And whether or not there was again, a margin drag potentially in the fourth quarter?
Brendan Jones
Yes. So you know, our DC fast charger, a fast charging strategy is threefold. Right now, right? First, we have our own products that are already in the market, which are predominantly fleet applications, and that's our DC. nine, which is actually the best selling DC project and product we have and it comes in 30 and 40 kilowatts is being primarily used to dealerships fleets across the nation. Then we have what we call our third party outsourced, where we have contracting manufacturing on a Blinkx look and feel charger. And that charger takes up where the DC-9 leaves off and fills our orders, whether those orders are to dealerships, fleet companies or municipalities.
The last piece of the strategy is our own design of DC. to 40 words, the design is done on the charger up and now we're moving towards certification and final design. So it's been about in terms of a product and a PT. two stage 80% of final. But the engineering aspects, including the silicon carbide modules. That part is all done. And then it's the determination of our manufacturing partner to build that charger with us.
So it's a great question, Craig, but that's where we sit today.
Craig Irwin
Excellent. Excellent. And then, Michael, I really appreciate the clarity on the gross margins of 30% is is an impressive number for any producer in this industry. Can you maybe on help us with some of the items that were impacting this fourth quarter GAAP versus the adjusted number?
Michael Rama
And you do have those details to share with us as we noted in the prepared remarks, a majority of I'd say about a May CAD2.5 represented a I'll call it, warranty and maintenance expenses or additional warranty and maintenance expenses as well as we had to expense certain composite discontinued components from the older as we're transitioning from the outsourced or of your contract manufacture product over to the in-house manufactured so there's components that we have. We had that were basically not using as much or just got to kind of expense throughout the at the end of the year. So it's a combination of a few things, but mostly on the warranty maintenance as well as discontinued components.
Craig Irwin
Okay. And then just a little bit more detail there. Can you give us a little color on what the warranty was on as a sort of legacy product for many years ago? Or is this something that, you know, it's just a minor correction for a more recent product implementation?
Brendan Jones
Right now, yes, we are doing fine, and that's a negative. Yes, again, I'll take a bed. So you know, there's two phases to it right there was the a lot of it had to do with legacy equipment in the field, and that's a two-prong approach, right?
You still do have customers out there that have the legacy equipment. We honored warranty to ensure that uptime and quality at those chargers. Because as you may know, that's one of the Number One concerns in the industry. So that increased our warranty expense a little bit also when we go through the exercise of replacing those legacy charges and the customer still wants that type of charger, one of the nuance we're faced with is normally we bring in chargers and we just do a basic rehab, but a lot of these chargers instead of doing the basic rehab on them, we have to pull out some old components now which adds to component expense that can't be reused.
We're going to get through most of that. So it's going to be a one-time expense, but it particularly hit in Q4.
So a lot of older componentry being upgrade and some additional warranty expense as a two to maintain quality out in the field.
Now there's also a call correlation to significant revenue and higher charger sales, and then we need to reserve more and warranty as well that played into that. So it is a bit of a multi-variable equation. It ended up with that result.
Craig Irwin
Excellent. And then last question, if I may buy in America, right? This is something that your friends, the Department of Energy is our being on. Obviously, settlement has begun to come. You guys are now, I believe, the best positioned company as far as level two supply into North America with the Boeing Marilyn facility and can you maybe give us a little bit of color as far as the breadth of demand that you're seeing? I know I know we've talked a few times about going 12,000 to 50,000 units in capacity. And I think there's a plan to go to 100,025 and you obviously see tremendous opportunity. Can you maybe unpack that for us because, you know, investor companies are mandatory around the.
Brendan Jones
Yes, no, I have absolutely. Yes. So you know, we met with federal, state and local reps all this week. There is a tremendous amount of interest in the Buy America product, right? It resonated through it, whether it was meeting with government or more or a meeting that took place in the White House just yesterday with the Board of Directors from Blinkx and key management. But all of them emphasized that they believe the volume of buying America product they need is exponential in terms of growth.
Now what they're doing, the Maryland facility allows us to do is service the US market plus the Buy America.
While we can also begin to manufacture chargers for our global markets out of our facility in India. And so basically, we take the same design and we have a global version and we have a US version and then we're compliant for everywhere we need to be.
And additionally, this flexibility in our manufacturing facilities allows us to move.
As we've stated, Craig, one of our goals is to remove the last vestiges of all third party equipment on L2 level, we're going to replicate the same strategy in Europe, which is going to bring better gross margin and get to scale fast faster, not just in the United States but across the goal.
Now one of the things that you might imagine as the US Post Office deal is a testament to getting towards scale. They were at the grand opening. They were more than happy with seeing what we're doing and they're going to suck up a pretty good percent of those charges made there and a little better story that they're all made in North America right here, blinks facility outside the nation's capital. So we're really excited about that.
Craig Irwin
Fantastic. Look, congratulations on the progress, and I'll hop back in the queue.
Operator
Perfect banQi.
Our next question is coming from Sameer Joshi with H.C. Wainwright. Your line is live.
Sameer Joshi
Thanks. Good afternoon. Congrats on the progress so far. Just a few questions and clarifications on the revenue outlook. So what is the contribution from products versus, say, network fees and charging revenue that is active? That is being reflected in this on 65 to one 75 outlook?
Vitalie Stelea
Michael?
Michael Rama
Yes, we expect the trajectory of the split between the service and the product to still be pretty consistent. What we've seen in 2023 as we move forward, it's a mix of the U.S. has been around 75% product and 25% service. And then kind of flip in Europe were about 25% on the search on the on the product side, in about 75% on the on the own and operate side. So we still expect in '24 to see that continue. But it gives us the flexibility as we move forward on having to be able to maximize on either side part of the business, either the hardware sales or the or the service side of it.
Brendan Jones
And yes, the only the only modification I'd say to that, Sameer, is we're moving rather quickly through 2024 to expand our sales operations in Europe. So while we have a high presence of owner operator there, as Michael just outlined, there's also an opportunity on sales that were restructuring all of our European offices offices to begin to take advantage of a higher penetration rate.
Sameer Joshi
Understood. So then on the gross margin outlook seems a even more conservative than the top line outlook, right? Because already in the fourth quarter you had near 30% excluding extraordinary items. You're saying your product sales are projected to grow. That should increase overhead absorption you're charging revenues are also expected to grow, which should add additional gross profit dollars.
Brendan Jones
It seems that the outlook might be conservative and I read in the trial, the only thing I would say is that for a full service EV infrastructure company today and we have many contemporaries in the United States, we've seen their earnings results. We are the leading in margin today.
Now, you know, do we intend to rest on our laurels, but you've seen we intend to get that to 33%. But you know, it's been our history since last year that when we give guidance, we're making sure that we give it from a conservative and realistic perspective. So 33% is we have a fundamental belief and looking at the numbers and the process and the improvements that we can achieve that target if there is upsides and we can truly measure that upside. And we clearly look through the rest of the organization on the finance and accounting side, that's there's going to be nothing that impacts that we may up that guidance as we go through the year. But I think 33% is the right target.
And again, that's still class-leading. We've got one of our competitors that is showing a decrease and next year, which is the complete opposite direction to where we're going.
Sameer Joshi
Yes, no, understood. Thanks for that. Just one last sort of bookkeeping question. What's the $45.5 million brie period of before December 31 or subsequent to December 31.
Brendan Jones
I'm just not clear on that. Michael?
Michael Rama
The argument that that $45.5 million represented a that was basically the Semiconductor acquisition note that we had out there. So we paid we paid a 12.5 of that during Q4 and the remainder in Q1 of 2024. So good with the proceeds generated with the capital, we felt it was most prudent and efficient effective to pay down that overhang that obligations and really decrease the expense burden on a go-forward basis makes sense.
Sameer Joshi
Thanks for taking my questions and good luck.
Brendan Jones
Thank you.
Operator
Thank you. Our final question is coming from Noel Parks with Tuohy Brothers. Your line is open.
Noel Parks
Hi, good afternoon. I just had a couple. I wondered, could you talk a bit about multifamily? I think you also mentioned in discussing that briefly a little bit about hospitality, that sector as well and I just think with multifamily, it's kind of that convergence between consumer adoption, we've sort of centralized charge and so interested to hear what you're seeing in that market.
Brendan Jones
Yes. So the first thing is we're seeing that segment grow next to fleet. We have that size growing segment that we're going after right now in the industry that sort of backs that up, but it's a little bit of a, you know, two models or even three models of coming together to service multifamily dwellings in some multifamily dwellings. You have the single charger model where you don't need any exit network access, right? In other models, it's a shared space model where we have to network the chargers and we have to create access credentials to them.
And then another and the third spot above spot of about multifamily is third party garage based infrastructure, which is not associated with the multi family dwelling, but it's contracted out and that requires right now, you know, full commercial chargers that are fully networked, but they are reserved for the for the people who consider that multifamily dwelling their home.
Now what we've done over the last 18 months is make sure that we have a charger for each of those use cases and we can provide that service. We always recommend network with network, we can build in energy management solutions and with fully commercial chargers, we can also build an energy management solutions. So you can better work with the facility to what you in the future to where you need to curtail use due to a rate card change or a mandate from the public utility, et cetera.
But if it's they don't need a network charger. We have a solution for that, but we're seeing that again, predominantly where it is dedicated space, dedicated user and the owners of the property in terms of the garage don't want networking, they just want to charge there and they'll monitor and charge the customer fee on their own. So all three of those are what we are servicing today. And we see that service increasing in the future.
Noel Parks
Great, thanks. Thanks a lot for the details and done at Buly. I wonder, can you sort of outline maybe number of manufacturing lines you have there, maybe the present number and what the capacity is or just some of the your way to quantify where you stand now and where the ultimate growth is in your in your footprint there?
Brendan Jones
Yes, absolutely. So we moved out of the facility just now, right? And that was servicing up to 15,000 units. And now we expect that need to grow exponentially over time here. And that was a single line that we had there in a very, very cramped space. So now we have three automated lines, one line right now can make up what we were doing out of the old facilities with the second two lines, of course, getting that number up. Also, we're working on what we call a standard daylight ship right now where the technicians come in early in the morning around seven to eight, and they work to about three on the manufacturing side and then they do cleanup and restocking before they punch out for the end of their ship. So we're going to get up to the 50,000 unit capacity when we start to add additional shifts and stagger and even where needed if we need capacity for a major fleet player, et cetera. And we have to ramp up quickly, we'll add shifts on Saturday and Sunday which we've done in the past to make sure that we deliver on time for special customers in unique circumstances.
Noel Parks
Great. And then just one last one is it's very interesting to hear you talk about some of the reorganization you've done on the sales side and the direct reorientation a bit in Europe. And I wonder if you could just talk a bit about the sort of Blinkx branded parts of the business versus, for example, on the on the product side, sort of white labeled or just inherently within a fleet customer deployment, I'm just interested to hear what about the role branding plays in your expanding business model going forward?
Brendan Jones
Yes. So right now, everything that we build is bling branded. However, there are some certain circumstances and will it will allow an additional brand to be added to that and some additional circumstances. And most of these are OEM. or particular customer related will we re-brand the entire charger on a customer contract. But for them, the third party chargers were fortunate that all the third party charges that are being that are non-paying manufactured and we have agreements with them that they're all Blinkx branded, so they come to us pre branded and then we ship them out. So the strategy for blank, as we said, we're going to move to 80% of all product is being manufactured and we're well on our way to that. And the new-build facility is going to add greatly to that.
Then when we convert European operations over to Blinkx manufactured product, which we're beginning where we're actually working on the final stages of the design for that charger. Now then we're going to do that even further. So the future is that 80% of all the products we sell our built manufactured and branded Blinkx.
Noel Parks
Terrific. Thanks a lot.
Operator
Thank you.
As we currently have no further questions in queue at this time. I would like to hand it back over to Mr. Stella for any closing remarks.
Vitalie Stelea
Thank you, Ali, and thank you to all of you who joined us on billings, fourth quarter 2023 earnings call, we announced another absolute record quarter of revenue growth and an industry-leading gross margin. This marks the end of this call. We look forward to communicating with you in 2024. And at this time, you may disconnect.
Operator
No, thank you, ladies and gentlemen, this does conclude today's call you may disconnect your lines at this time and have a wonderful day. We thank you for your participation.
