Blackline Safety Corp. (“Blackline” or the “Company”), a global leader in connected safety technology, reported its fiscal fourth quarter and annual financial results for the period ended October 31, 2023.
Management Commentary
“We are delighted to achieve a significant milestone, reaching $100 million in total annual revenue as we recorded our 27th consecutive quarter of year-over-year total revenue growth. This includes our fourth quarter, where we reached $30.0 million in total revenue, a 36% increase over the prior year’s quarter. We are proud of our execution during the year: increasing ARR(1) 40% to $51.1 million, achieving 33% more in hardware revenue, while decreasing total annual expenses 10%, leading to a dramatic reduction in EBITDA(1) loss,” said Cody Slater, CEO and Chair, Blackline Safety Corp.
“In Q3 of last year, we embarked on a path to profitability. In that quarter, our EBITDA(1) loss represented 79% of our revenue and our cash used in operating activities was 105%. In Q4 2023, our EBITDA(1) loss was reduced to less than 5%, our cash used in operating activities as a percentage of revenue(1) was improved to 7%, all while achieving top line growth of 36%. Even though we did not hit our ambitious goal of reaching EBITDA positive results I am confident the Company has transformed itself into an engine that can continue to deliver top line growth in the future and generate significant profitability in the long run,” continued Slater.
Blackline set a new record in quarterly gross profit of $16.5 million which was driven by strength in both our product and service segments that delivered increases of 66% and 53%, respectively. The Company’s strong fiscal fourth quarter gross margin percentages(1) of 32% for hardware and 77% for service are an excellent benchmark for fiscal 2024 and will contribute to Blackline’s path sustained profitability. Q4 2023 marked the fourth consecutive quarter of 33% year-over-year revenue growth or better. We expect to continue our revenue and market share growth while maintaining cost discipline to target consistent positive Adjusted EBITDA(1) in the seasonally stronger second half of fiscal 2024.
Blackline delivered industry-leading NDR(1) reaching a new high of 129% in Q4 2023. Our solutions are core to the health, safety and compliance practices of our customers across industrial markets who continue to value the workforce visibility and safety that our integrated technology solution provides.
Geographically, the Company experienced year-over-year growth across the board with the United States growing 89% while our Rest of World and Canada markets grew 14% and 12%, respectively. Europe grew 1% compared to a strong fourth quarter in the prior year and it remains a key driver of growth for Blackline in fiscal 2024.
Mr. Slater continued, “Blackline achieved its highest quarterly gross profit ever at $16.5 million, overall margin percentage was the highest in three years at 55%, driven by service margin of 77% and product margin of 32%. The improvements in these metrics continue to be driven by our lean manufacturing, increasing scale, value added software services and enhanced pricing model. The trend of margin improvements is a key contributor to a sustainable profitable financial model.”
“With the close of our expanded two-year credit facility in October, with a total capacity of $25 million, we remain in a strong financial position with total cash, short-term investments, and availability on our credit facility of $29.2 million all in addition to our lease securitization facility, which has $53.2 million available. As we continue to reduce our cash burn through cost optimization, margin expansion and revenue growth, it is clear that we have the capital resources available to continue on our path to a sustainable free cash flow generating business.”
Fiscal Fourth Quarter 2023 and Recent Financial and Operational Highlights
- Total revenue of $30.0 million, a 36% increase over the prior year’s Q4
- Service revenue of $15.0 million, a 38% increase over the prior year’s Q4
- Product revenue of $15.0 million, a 35% increase over the prior year’s Q4
- United States growth continues to be strong with an 89% revenue increase over the prior year’s Q4
- Canadian market contributed 12% revenue growth over the prior year’s Q4
- Rest of World revenue grew 14% compared to the prior year’s Q4
- ARR (1) growth of 40% year-over-year to $51.1 million
- Total Q4 expenses were $19.8 million, declining $0.5 million compared to the prior year’s Q4
- Expanded credit facility with ATB Financial to $25 million
- Introduced new features for award-winning G7 EXO area gas monitor
- Unveiled Protect and Protect Plus service plans for G6 and new features, including an emergency SOS button, real-time connectivity and an expanded suite of data analytics
- Named to Globe & Mail’s Report on Business Top Growing Companies for fifth consecutive year
- Awarded $3.5 million contract by leading North American energy company to protect over 850 workers
- Secured $1.3 million worth of contracts with leading Middle East energy companies
- Announced over $2.0 million in total contract value for hundreds of fire and hazmat organizations globally
- This news release presents certain non-GAAP and supplementary financial measures, including key performance indicators used by management and typically used by companies in the software-as-a-service industry, as well as non-GAAP ratios to assist readers in understanding the Company’s performance. Further details on these measures and ratios are included in the “Key Performance Indicators,” and “Non-GAAP and Supplementary Financial Measures” sections of this news release.
Conference Call
A conference call and live webcast have been scheduled for 11:00 am ET on Thursday, January 18, 2024. Participants should dial 1-800-319-4610 or +1-416-915-3239 at least 10 minutes prior to the conference time. A live webcast will also be available at https://www.gowebcasting.com/13108. Participants should join the webcast at least 10 minutes prior to the start time to register and install any necessary software. If you cannot make the live call, a replay will be available within 24 hours by dialing 1-800-319-6413 and entering access code 0356.
