Blackline Safety Corp.

Welcome to the Black Line Safety's Fiscal Second Quarter Results Conference Call. The conference is being recorded. I would now like to turn the conference over to Elisa Kwong, 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 second quarter ended April 30th, 2024. 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 Grannon. 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. 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 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 insurgencies. Actual results may differ materially from those set forth in such statements. For discussion of these risks and insurgencies, please review the forward-looking statements disclosure in the Earnings News Release as well as in the company's CDR Plus filing. 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 ND&A. both of which can be found on our website, blocklinesafety.com, and on CEDAR. 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, Alicia. Good morning, everyone, and welcome to Blockline Safety's second quarter 2024 conference call. Building off the consistent momentum we have seen over the past 18 months, I am pleased to share today Black Plains' second fiscal quarter results. We delivered the highest revenue in the company's history at $31.6 million, a 31% increase over the same quarter last year, coupled with record gross profit of $18 million, up 44% from the prior year. This quarter marks our 29th consecutive quarter of year-over-year revenue growth, a track record that few companies can match. These results demonstrate the strength of our robust hardware-enabled software-as-a-service business model and the steadily increasing demand we are seeing in the market for our unique connected safety platform. We continue to achieve greater scale with our service revenue, growing 30% to a record $16.8 million for the quarter. This enabled us to deliver a 33% year-over-year increase in our ARR, or annual recurring revenue, now reaching 56.5 million. The increase was driven by new customer sales, as well as maintaining our exceptionally strong net dollar retention of 130%. This impressive NDR demonstrates the powerful value customers see in the Blackline platform, our industry-leading hardware and software connected safety solution. We're seeing our land and expand strategy pay off with an increasing number of customers upgrading their initial deployments with additional hardware and services, many moving to adopt Blackline as their enterprise-wide solution. Our highest-ever service margin of 77% generated $13 million of gross profit compared to $9.6 million in the prior year quarter. Our hardware segment generated $5.1 million of gross profit, up 76% year-over-year, delivering a margin of 34% in the current quarter, up from 26% the prior year. This lift in margin stems largely from increased volume as our scale absorbs more fixed costs and also from manufacturing operational efficiency alongside our updated pricing strategy. With strong contributions from both hardware and services, we were able to see an increase in our gross margin to 57% from the 52% in the prior year quarter, delivering a record gross profit of $18 million. On the expense side, total operating expenses for Q2 were $21.8 million. It's important to note that as a percentage of revenue, each category of expenses decreased year over year, demonstrating efficiencies as we scale. Companies' ongoing disciplined cost management, together with our past investments in our sales and marketing and research and development efforts, will continue to drive robust results. As we look to the remainder of the year, our continued margin expansion and discipline cost focus and top-line growth put us in a strong position to deliver on our goal of achieving adjusted EBITDA profitability as we exit the fiscal year. Looking at our cash position, we ended the quarter with total cash and cash equivalents on hand of $13.2 million, with our cash used in operations decreasing 78% year over year. With our improving margins, growing ARR, and a major decrease in cash burn, we exited the quarter in a strong financial position. In 2017, Blackline introduced the industrial world to connected safety as we brought the G7 connected wearable to market. We integrated our hardware offering with unique value-added services, including real-time connectivity, push-to-talk, and 24-7 live monitoring of workers' making BlockLine's solution far superior to the existing gas detection products on the market. Today, seven years later, BlockLine has achieved its greatest quarterly revenue ever as customers upgrade their outdated conventional gas detection fleets to BlockLine's industry-leading hardware and software platform. Looking ahead, we at BlockLine remain focused on disciplined execution of our proven business model. With our strong financial foundation, dedicated team, and award-winning solutions, we are well positioned to capitalize on the growing market demand for our connected safety solutions while delivering sustained value to our shareholders. I will speak to the bot deal financing and concurrent private placement later in the call, but before I do, I will now turn the call over to our CFO, Shane Brennan, to discuss our fiscal second quarter results and financial position in more detail.