Blackline Safety Corp.

Thank you for standing by. This is the conference operator. Welcome to the Black Line Safety Corp. Second Quarter 2023 Results Conference Call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity for analysts to ask questions. To join the question queue, you may press star, then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. I would now like to turn the conference over to Scott Boston, Vice President of Finance. Please go ahead.

Welcome, and thank you for joining us. Today, we will be discussing our fiscal results for the second quarter ended April 30, 2023, which were issued before market opening this morning. With me today is Cody Slater, CEO and Chair of Blackline Safety Corp, as well as our CFO, Shane Grennan. I will turn the call over to Cody in just a moment for an overview of our second quarter. Following that, Shane will discuss the financial highlights of the quarter in greater detail, and Cody will then close with our outlook and some additional commentary before we take questions. I'd like to remind everyone that this call is live and is being recorded today, Wednesday, June 14th, 2023, An archive of the webcast will be made available on the Investors section of our website. I would like to note that some of the information discussed in this call is based on information as of today and contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those set forth in such statements. For a discussion of these risks and uncertainties, please review the forward-looking statement disclosure in the earnings news release as well as in the company's CDAR filings. During this call, there will be a discussion of IFRS results, non-GAAP financial measures, non-GAAP ratios, and supplementary financial measures. A reconciliation between IFRS results and non-GAAP financial measures is available on the company's earnings news release and MD&A, both of which can be found on our website, blacklinesafety.com, and on CDAR. All dollar amounts are reported in Canadian dollars unless otherwise noted. With that, I will now hand the call over to Mr. Slater.

Thank you, Scott. Good morning, everyone, and welcome to Blackline Safety's second quarter 2023 conference call. Q2 continued our strong momentum from the last several quarters with another new record for total revenue of $24.1 million, which was up 45% year over year. This is our 25th consecutive quarter of year over year revenue growth. The rate of revenue growth also accelerated when compared to the first quarter of 2023, with service and product revenues up 46% and 43% respectively. We were able to achieve this while maintaining our reduced cost structure as we continue on our path to positive quarterly adjusted EBITDA by the end of this fiscal year. Q2 also set a record for gross margin at $12.5 million, with an overall gross margin percentage of 52%, driven by our highest ever service margin of 75%, which validates the opportunity for our business model to generate free cash flow in the near term. At the end of the quarter, our annual recurring revenue had increased 38% year-over-year to $42.4 million, demonstrating the longer-term opportunity for Blackline as we scale our connected workers solution and our market share through customer adoption of our world-class products and services across a variety of industrial verticals. We are seeing this growing success across all our regions, and we saw year-over-year revenue growth across the board, with our largest segment, the United States, leading the way at 65%, including our recently announced win in Texas of a competitive bid for portable gas detection to protect 1,000 workers. Canada and Europe also remain strong, with 24% and 17% revenue growth, respectively. I want to specifically highlight the rest of the world, which increased 123%, achieving a new high-water mark with nearly $2 million in quarterly revenue. This team, now under the leadership of our new Vice President, International Sales, Peter Attalla, is primed to continue driving the growth of Blackline in key international segments and increase the pipeline of deals from leading international energy, manufacturing, transportation and chemical companies. Within our service segment, we saw another quarter of extremely strong results from our rental team, generating $1.6 million in revenue, a 247% increase year-over-year. This rental offering not only provides incremental high-margin revenue from the industrial turnaround and construction markets, but it also enables companies who are not yet customers to experience the advantages of the BlackLine solution at their facilities and is a strong leading indicator for future sales. We'd also like to highlight our net dollar retention, which surpassed our earlier goal to reach 115% by the year end, coming in at 118% in Q2, up from 102% last Q2. We are now targeting 120% for this metric by our fiscal year end, as more customers renew their contracts with incremental service at a higher average revenue per units. All of this contributed to reducing our adjusted EBITDA loss by 73% from $12.3 million in Q2 of 2022 to $3.3 million in the current quarter, normalizing for the effects of foreign exchange gains. This demonstrates how far we are down the path to our goal of achieving quarterly positive adjusted EBITDA by the end of fiscal 2023. We maintained our solid financial position at the end of the quarter, with total cash and short-term investments on hand of $21 million, including $8.3 million of funding received from the sale of the initial tranche of lease contracts under our new securitization agreement with CWB Maxima. With 15 million Canadian and 35 million US in total availability, this facility provides us with the opportunity to more aggressively market our all-in monthly solutions, which continue to be attractive to many customers, including those for our newest product line, the G6. As it relates to the G6, we've seen strong customer interest in the product and its roadmap. This has generated a robust pipeline with the majority of customers looking for enhanced services on the roadmap were not available at the launch of the product but will be available in the fourth quarter of this fiscal year. While this will result in the delay of volume shipments anticipated in Q3, the G6 should be on track in Q4. I would note that the short-term impact here is offset by the success we've had in the market penetration of our core products and resulting growth in our ARR. In the longer term, the opportunity to monetize these higher value services for the G6 will create an even stronger product line for Blackline and its customers. I will now turn the call over to our CFO, Shane Grennan, to discuss our fiscal second quarter results and financial position in more detail.