Blackline Safety Corp.

Welcome to the Black Line Safety's Fiscal First Quarter Results Conference Call. The conference is being recorded. I would now like to turn the conference over to Alisa Huang, Vice President, Accounting and Finance, Corporate Controller. Please go ahead.

Welcome and thank you for joining us. Today we will be discussing our fiscal results for the first quarter and the January 31st, which were issued before market opening this morning. With me today is Cody Slater, CEO and Chair of Black Line 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 first quarter. Following that, Shane will discuss the financial highlights of the quarter in greater detail. Cody will close with our outlook and some additional commentary before we take questions. I'd like to remind everyone that an archive of this webcast will be made available on the investor 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 risk and uncertainties. Actual results may differ materially from those set forth in such statements. For discussion of these risk and uncertainties, please review the forward-looking statement disclosure in the Earnings News Release as well as in the company's CDR Plus 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 in 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, Lisa. Good morning, everyone, and welcome to Blackline Safety's first quarter 2024 conference call. After a strong end to our fiscal 2023 year that saw us achieve the milestone of $100 million of total revenue and a Q4 adjusted EBITDA improvement of 76% from the prior year quarter, we continued our momentum into Q1 of fiscal 2024. I'm pleased to share today Blackline's first fiscal quarter results. It was our 28th consecutive quarter of year-over-year revenue growth. with total revenue of $26.3 million, a 25% increase over the same quarter last year, and gross profit of $14.6 million, up 40% from the prior year. While Q1 is traditionally our slowest quarter of the year, with hardware sales in this seasonal period being below those of Q4, we still saw the company achieve its second highest quarterly revenue ever at $26.3 million. Lower hardware sales do not, however, mean lower service revenue. Q1 saw our service revenue continue to grow, with our annual recurring revenue surpassing $54.2 million, up 37% year-over-year. This increase was driven by new hardware sales, as well as our record net dollar retention of 130%. This strong NDR demonstrates the powerful value customers see in our connected safety solutions. We continue to achieve greater scale with our service revenue, which grew 28% overall to $14.9 million for the quarter. Excluding our rental segment, which was flat year-on-year in the period, the service line grew 31% over the prior year as more customers adopt value-added service plans and devices sold in Q4 begin to come online. Our service margin hit 76%, generating $11.3 million of gross profit versus $8.4 million in the prior year. Our hardware segment generated 3.3 million gross profit, up 69% year-over-year, driving our product margin up to 29% from 21% in the prior year quarter. This boost stems from increased volume, operational efficiency with our manufacturing, and our pricing strategy. With strong contributions from both hardware and services, we were able to maintain our gross margin at 55% from the particularly strong fourth quarter of fiscal 2023. We're particularly pleased we ended the quarter with total cash and short-term investments on hand of $15.9 million, the same as that on hand at our October 31st, 2023 year end. We saw significant improvements in our cash flows from operating activities. We used only $0.4 million of cash compared to $7.6 million in the prior year's quarter, a 94% improvement in cash used from the period only one year ago. With our improving margins, growing ARR, and a major decrease in the cash burn, we exited the quarter in an extremely strong financial position. With 26.2 million total liquidity in cash, short-term investments, and availability on our operating facility, plus 52.9 million available on our lease securitization facility, we are well on the path to a sustainable, free cash flow generating business. The discipline focus we have demonstrated over the last 18 months to transform Blacklight into a profitable growth business will show its real results later in the year. Having said that, Q1 has set the stage for the rest of fiscal 2024. With hardware sales set to ramp through the year, services continuing their strong trajectory, including a return to growth in our rental segment and continued cost discipline, the company is well positioned to cross into positive adjusted EBITDA in 2024. With cash used in operating activities dropping to just $400,000 and total liquidity of over $26 million, it is clear that the company has the resources it needs to reach this goal and continue to grow beyond. We have transformed into an engine that delivers consistent top-line growth and disciplined cost management to fuel profitability over the long term. I will now turn the call over to our CFO, Shane Brennan, to discuss our fiscal first quarter results and financial position in more detail.