Connected safety tech company Blackline Safety, which sells hardware such as wearable safety tech and gas monitoring as well as cloud-based safety monitoring applications, reported fourth quarter fiscal 2020 (year ended October 31) and full-year results on Thursday.
The company hit a Q4 record of $11.6 million in revenue, a seven-per-cent year-over-year increase, and adjusted EBITDA of $2.1 million compared to $155,000 a year earlier. Blackline said its net loss per share was $0.04 compared to a loss of $0.06 a year ago.
For the fiscal year, Blackline’s revenue was up 15 per cent from 2019 while the company said adjusted EBITDA went to $5.5 million from $4.9 million in 2019. Blackline said recurring service revenue growth drove the company’s performance throughout the fiscal year, while the Q4 represented the 15th-consecutive quarter of year-over-year revenue growth and eighth-consecutive quarter of positive adjusted EBITDA.
Looking back at the year, CEO and Chairman Cody Slater said during the pandemic Blackline’s priority has been to “quickly develop solutions that our customers could implement to maintain operations while keeping their people safe.”
“Despite the impact of COVID-19, Blackline has proven its global presence as a key sustainability stakeholder. This was strongly underscored by client service commitments with annual recurring service revenue up by 42 per cent at $25.5 million,” Slater said in a press release. “While the pandemic interrupted sales cycles with fewer products shipped compared to the prior year, our strong client retention enabled our teams to deliver double-digit overall growth of 15 per cent and $38.4 million in revenue.”
Highlights of the fourth quarter included a bought deal financing round for $36 million and the first shipments of Blackline’s G7 EXO area gas monitor across Europe, having completed product development and certification for the new tech, which has integrated 4G cellular direct-to-cloud communication (first shipments in North America occurred post-quarter). The company noted its ranking at #321 on Deloitte’s Technology Fast 500 list of fastest growing tech companies in North America. Blackline finished the fiscal year with cash and short-term investments of $51.5 million.
Looking at the numbers, Leung said Blackline’s $11.6-million in revenue and negative $709,000 in EBITDA were better than his forecast for $9.0 million topline and EBITDA of negative $1.2 million.
“COVID-19 continued to impact new product sales, although the new G7 EXO area monitor did contribute $1.9 million in product sales, which we view as a positive start to this product line,” Leung wrote.
Drilling down, the analyst noted Blackline’s Product revenue was down 14 per cent year-over-year to $4.8 million while Service revenue grew by 31 per cent to $6.7 million. Gross margins hit 56.4 per cent versus 47.4 per cent a year ago, with Service margins flat at 68 per cent and Product margins went from 29 to 40 per cent (initial sales of the higher margin G7 EXO figured into the increase).
“Overall, we believe Blackline continues to generate very good traction with its portfolio of connected worker solutions with the launch of G7 EXO expected to help accelerate this growth over the coming quarters,” Leung said.
With the update, Leung maintained his “Speculative Buy” rating but raised his target from $10.00 to $11.50, which at the time of publication represented a projected one-year return of 35 per cent.
Looking ahead, the analyst is calling for Blackline to generate fiscal 2021 revenue of $44.8 million and EBITDA of negative $3.9 million.
Blackline has continued its upward climb over the first part of the calendar year and is currently up 12.6 per cent.
Calgary-based Blackline announced the launch of its G7 EXO monitor in North America on January 20, saying the product brings unrivalled connectivity compared to conventional area monitors, one which due to there being no need for Wi-Fi networks allows setup in one tenth of the time of a traditional area monitor.
“This is the most rugged, easy to use — and the first true Internet of Things (IoT) — area gas monitor in the world,” said Sean Stinson, CRO of Blackline Safety, in a press release. “On top of a robust gas sensing platform, G7 EXO uses 4G connectivity to automatically stream situational data directly to the people that need it. Our best-in-class communication services, paired with user-centred design mean that EXO can be set up in minutes, every time. Integrated, reliable coverage means that no alert will ever be lost, and no worker or site left vulnerable to environmental hazards.”