Blackline Safety Reports Fiscal First Quarter 2024 Results – Revenue Up 25% Year-Over-Year
Company marks 28th consecutive quarter of YoY revenue growth driven by a 37% increase in annual recurring revenue, with gross profit up 40% YoY and net dollar retention of 130%
-
Q1 revenue hit
$26.3 million , up 25% year-over-year -
Annual Recurring Revenue (“ARR”)(1) increased 37% year-over-year to
$54.2 million - Record Net Dollar Retention (“NDR”)(1) of 130% improved year-over-year from 113%
-
Gross profit increased 40% year-over-year to
$14.6 million - Gross margin of 55%, up from 49% in the prior year
-
Adjusted EBITDA(1) loss of
$3.2 million in Q1 2024 compared to$6.2 million loss in Q1 2023, an improvement of 48% -
Net cash used in operating activities decreased 94% to
$0.4 million from$7.6 million year-over-year - Company in excellent position to produce another record year and remains on track to generate positive quarterly Adjusted EBITDA in the latter half of the fiscal year
Management Commentary
“In Q1, we delivered our 28th consecutive quarter of year-over-year total revenue growth with a 25% increase compared to the same quarter last year. Gross profit grew by 40% year-over-year to
Blackline saw year-over-year revenue growth across all operating regions, with
The Company remains on track to achieve positive quarterly Adjusted EBITDA in the seasonally stronger second half of the fiscal year by leveraging the strength of its product and service segments, margin enhancements, and expansion across the utilities, energy and industrial sectors. A continued focus on disciplined cost management will further contribute to Blackline’s path to sustained profitability.
Fiscal First Quarter 2024 and Recent Financial and Operational Highlights
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Total revenue of
$26.3 million , a 25% increase over the prior year’s Q1 -
Recurring software services revenue of
$13.9 million , a 31% increase over the prior year’s Q1 -
ARR(1) growth of 37% year-over-year to
$54.2 million -
Product revenue of
$11.4 million , a 21% increase over the prior year’s Q1 - European market growth of 39% over the prior year’s Q1
-
United States growth continues to be strong with a 29% increase over the prior year’s Q1 -
Total Q1 expenses were
$19.9 million , which increased 10% year-over-year, however Q1 expenses as a percentage of revenue(1) decreased 10% year-over year and were flat with Q4 -
Significant improvement in net cash used in operating activities to
$0.4 million , a 94% decrease over the prior year’s Q1 -
Secured a
$2.7 million contract with a majorU.S. upstream energy company to protect over 800 workers -
Joined the
Amazon Web Services (AWS) Partner Network as an AWS Public Sector Partner
Financial highlights
|
Three-months ended
|
||
(CAD thousands, except per share and percentage amounts) |
2024 |
2023 |
% Change |
Product revenue |
11,435 |
9,424 |
21 |
Service revenue |
14,890 |
11,622 |
28 |
Total Revenue |
26,325 |
21,046 |
25 |
Gross profit |
14,579 |
10,383 |
40 |
Gross margin percentage(1) |
55 % |
49 % |
|
Total Expenses |
19,916 |
18,164 |
10 |
Total Expenses as a percentage of revenue(1) |
76 % |
86 % |
|
Net loss |
(5,791) |
(7,692) |
(25) |
Loss per common share - Basic and diluted |
(0.08) |
(0.11) |
(27) |
EBITDA(1) |
(3,392) |
(6,044) |
44 |
EBITDA per common share(1) - Basic and diluted |
(0.05) |
(0.08) |
38 |
Adjusted EBITDA(1) |
(3,234) |
(6,231) |
48 |
Adjusted EBITDA per common share(1) - Basic and diluted |
(0.04) |
(0.09) |
56 |
(1) This news release presents certain non-GAAP and supplementary financial measures, 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 “Non-GAAP and Supplementary Financial Measures” section of this press release. |
Key Financial Information
Total revenue for the fiscal first quarter was
Service revenue during the fiscal first quarter was
Product revenue during the fiscal first quarter was
Overall, gross margin percentage(1) for the fiscal first quarter was 55%, a 6% increase compared to the prior year’s quarter. The increase in total gross margin percentage(1) was due to a combination of higher sales volume, our enhanced pricing strategy, continued cost optimization across our business and a shift in revenue mix towards higher margin service revenue. Product revenue comprised 43% of total revenue in the first quarter, compared to 45% in the prior year’s quarter, while service revenue made up 57% of total revenue for the quarter, compared to 55% in the prior year’s quarter.
Service gross margin percentage(1) increased to 76% compared to the prior year’s quarter of 73%. This was primarily due to our continued service revenue growth through additional value-added features, enhanced pricing and our scale absorbing more fixed costs.
Product gross margin percentage(1) for the fiscal first quarter increased to 29% from 21% in the prior year’s quarter. The improvement reflects the increased volume of product sales in the current quarter compared to the prior year, as well as the Company’s focus on manufacturing line efficiency and the impact of our enhanced pricing strategy. The fiscal first quarter product gross margin decreased by 3% compared to the seasonally stronger fourth quarter of fiscal 2023 mainly due to the decrease in product sales volume.
Total expenses for the fiscal first quarter were
Net loss for the fiscal first quarter was
EBITDA(1) for the fiscal first quarter was
Adjusted EBITDA(1) for the fiscal first quarter was
At the end of the fiscal first quarter, Blackline had total cash and short-term investments on hand of
Blackline’s Interim Condensed Consolidated Financial Statements and Management’s Discussion and Analysis on Financial Condition and Results of Operations for the three-month period ended
Conference Call
A conference call and live webcast have been scheduled for
About
Non-GAAP and Supplementary Financial Measures
This press release presents certain non-GAAP and supplementary financial measures, including key performance indicators used by management typically used by our competitors in the software-as-a-service industry, as well as non-GAAP ratios to assist readers in understanding the Company’s performance. These measures do not have any standardized meaning and therefore are unlikely to be comparable to similar measures presented by other issuers and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.
Management uses these non-GAAP and supplementary financial measures, as well as non-GAAP ratios and key performance indicators to analyze and evaluate operating performance. Blackline also believes the non-GAAP and supplementary financial measures defined below are commonly used by the investment community for valuation purposes, and are useful complementary measures of profitability, and provide metrics useful in Blackline’s industry.
Throughout this news release, the following terms are used, which do not have a standardized meaning under GAAP.
Key Performance Indicators
Management uses a number of key performance indicators, including those identified below, to measure the performance of the business, identify and assess trends affecting the Company and to make strategic decisions. These key performance indicators do not have any standardized definitions prescribed by IFRS and cannot be reconciled to a directly comparable IFRS measure. These key performance indicators may be calculated in a manner different than similar key performance indicators used by other companies.
- “Annual Recurring Revenue” is the total annualized value of recurring service amounts (ultimately recognized as software services revenue) of all service contracts at a point in time. Annualized service amounts are determined solely by reference to the underlying contracts, normalizing for the varying revenue recognition treatments under IFRS 15 Revenue from Contracts with Customers. It excludes one-time fees, such as for non-recurring professional services, and assumes that customers will renew the contractual commitments on a periodic basis as those commitments come up for renewal, unless such renewal is known to be unlikely. We believe that ARR provides visibility into future cash flows and is a fair measure of the performance and growth of our service contracts.
- “Net Dollar Retention” compares the aggregate service revenue contractually committed for a full period under all customer agreements of our total customer base as of the beginning of the trailing twelve-month period to the total service revenue of the same group at the end of the period. It includes the effect of our service revenue that expands, renews, contracts or is declined, but excludes the total service revenue from new activations during the period. We believe that NDR provides a fair measure of the strength of our recurring revenue streams and growth within our existing customer base.
Non-GAAP Financial Measures
A non-GAAP financial measure: (a) depicts the historical or expected future financial performance, financial position or cash of the
Non-GAAP financial measures presented and discussed in this news release are as follows:
“EBITDA” is useful to securities analysts, investors and other interested parties in evaluating operating performance by presenting the results of the Company which excludes the impact of certain non-cash or non-operational items. EBITDA is calculated as earnings before interest expense, interest income, income taxes, depreciation and amortization.
“Adjusted EBITDA” is useful to securities analysts, investors and other interested parties in evaluating operating performance by presenting the results of the Company which excludes the impact of certain non-operational items and certain non-cash and non-recurring items, such as stock-based compensation expense. Adjusted EBITDA is calculated as earnings before interest expense, interest income, income taxes, depreciation and amortization, stock-based compensation expense, foreign exchange loss (gain), and non-recurring impact transactions, if any. The Company considers an item to be non-recurring when a similar revenue, expense, loss or gain is not reasonably likely to occur within the next two years or has not occurred during the prior two years.
Reconciliation of non-GAAP financial measures
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Three-months ended
|
|||||
(CAD thousands) |
|
|
|
2024 |
2023 |
% Change |
Net loss |
|
|
|
(5,791) |
(7,692) |
(25) |
Depreciation and amortization |
|
|
|
1,945 |
1,737 |
12 |
Finance expense (income), net |
|
|
|
186 |
(279) |
NM |
Income taxes |
|
|
|
268 |
190 |
41 |
EBITDA |
(3,392) |
(6,044) |
44 |
|||
Stock-based compensation expense(1) |
352 |
539 |
(35) |
|||
Foreign exchange loss (gain) |
(194) |
(726) |
(73) |
|||
Adjusted EBITDA |
|
|
|
(3,234) |
(6,231) |
48 |
(1) Stock-based compensation expense relates to the Company’s stock compensation plan and stock option expense is extracted from cost of sales, general and administrative expenses, sales and marketing expenses and product research and development costs on the consolidated statements of loss and comprehensive loss. NM – Not meaningful |
Non-GAAP Ratios
A non-GAAP ratio is a financial measure presented in the form of a ratio, fraction, percentage or similar representation and that has a non-GAAP financial measure as one or more of its components.
Non-GAAP ratios presented and discussed in this news release is follows:
“EBITDA per common share” is useful to securities analysts, investors and other interested parties in evaluating operating and financial performance. EBITDA per common share is calculated on the same basis as net income (loss) per common share, utilizing the basic and diluted weighted average number of common shares outstanding during the periods presented.
“Adjusted EBITDA per common share” is useful to securities analysts, investors and other interested parties in evaluating operating and financial performance. Adjusted EBITDA per common share is calculated on the same basis as net income (loss) per common share, utilizing the basic and diluted weighted average number of common shares outstanding during the periods presented.
Supplementary Financial Measures
A supplementary financial measure: (a) is, or is intended to be, disclosed on a periodic basis to depict the historical or expected future financial performance, financial position or cash flow of the
Supplementary financial measures presented and discussed in this news release is as follows:
- “Gross margin percentage” represents gross profit as a percentage of revenue
- “Annual Recurring Revenue” represents total annualized value of recurring service amounts of all service contracts
- “Net Dollar Retention” represents the aggregate service revenue contractually committed
- “Product gross margin percentage” represents product gross profit as a percentage of product revenue
- “Service gross margin percentage” represents service gross profit as a percentage of service revenue
- “Total expenses as a percentage of revenue” represents total expenses as a percentage of total revenue
Note Regarding Forward-Looking Statements
This news release contains forward-looking statements and forward-looking information (collectively “forward-looking information”) within the meaning of applicable securities laws relating to, among other things, Blackline’s expectation to deliver top line growth and significant profitability in the long run; Blackline’s expectation that we expect sales momentum and a strong growth trajectory for the rest of the 2024 fiscal year to continue in fiscal 2025 as we add sales of our G6 zero-maintenance wearable to accompany our robust sales of G7 and G7 EXO; that the Company expects to continue to drive strong growth in our high margin service revenue as we continue to play our role in the transformation of the industrial workplace into a connected one; that the Company will continue to manage its capital structure and liquidity risk in order to fund its product roadmap and strategic additions to its global sales and distribution network in order to execute our strategy to continue strong revenue and margin growth while achieving our goal of positive Adjusted EBITDA and Free Cash Flow as part of a successful sustainable financial business model. Blackline provided such forward-looking statements in reliance on certain expectations and assumptions that it believes are reasonable at the time. The material assumptions on which the forward-looking information in this news release are based, and the material risks and uncertainties underlying such forward-looking information, include: expectations and assumptions concerning business prospects and opportunities, customer demands, the availability and cost of financing, labor and services, that Blackline will pursue growth strategies and opportunities in the manner described herein, and that it will have sufficient resources and opportunities for the same, that other strategies or opportunities may be pursued in the future, and the impact of increasing competition, business and market conditions; the accuracy of outlooks and projections contained herein; that future business, regulatory, and industry conditions will be within the parameters expected by Blackline, including with respect to prices, margins, demand, supply, product availability, supplier agreements, availability, and cost of labour and interest, exchange, and effective tax rates; projected capital investment levels, the flexibility of capital spending plans, and associated sources of funding; cash flows, cash balances on hand, and access to the Company’s credit facility and lease securitization facility being sufficient to fund capital investments; foreign exchange rates; near-term pricing and continued volatility of the market; accounting estimates and judgments; the ability to generate sufficient cash flow to meet current and future obligations; the Company’s ability to obtain and retain qualified staff and equipment in a timely and cost-efficient manner; the Company’s ability to carry out transactions on the desired terms and within the expected timelines; forecast inflation, including on the Company’s components for its products, the impacts of the military conflict between
(1) |
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. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240314117399/en/
INVESTOR/ANALYST CONTACT
sgrennan@blacklinesafety.com
+1 403-630-8400
MEDIA CONTACT
cgillies@blacklinesafety.com
+1 403-629-9434
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