Blackline Safety (TSE:BLN) reported a “strong start” to fiscal 2026, highlighting continued growth in its recurring revenue base alongside what management called the most significant product launch in the company’s history.
For the first quarter ended January 31, 2026, the company posted revenue of CAD 38.8 million, up 3% year-over-year and extending its streak to 36 consecutive quarters of year-over-year top-line growth. Management emphasized that results were achieved while navigating a product transition from the G7 to the new G8 connected safety wearable and absorbing launch-related costs.
Service revenue growth offsets product transition headwind
Product revenue was CAD 14.0 million, down 22% year-over-year. CEO Cody Slater reiterated that the company expected a near-term headwind after announcing the G8, as some customers chose to defer hardware purchases ahead of first shipments. Curry also pointed to a tough comparison in the prior-year quarter, when customers pulled forward purchases due to geopolitical uncertainty and anticipated tariffs.
During the Q&A, Slater said the company began shipping G8 units “today” and expects hardware growth to “return and then accelerate through the rest of the year.” He added that Blackline had discussed an expectation that about 25% of shipments in Q2 would be G8 devices, “and then growing from there,” while noting that some orders remain “budgeted and very locked in at the G7.”
Recurring revenue metrics remain strong
Blackline reported annual recurring revenue (ARR) of CAD 90.5 million as of January 31, 2026, up from CAD 70.9 million a year earlier, a 28% increase year-over-year. Slater said the continued ARR momentum provides strong visibility into the year ahead as the company accelerates the G8 rollout.
Net dollar retention (NDR) was 126% in Q1, reflecting expansion within the existing customer base. Management noted NDR has remained above 125% for 11 consecutive quarters.
Slater also framed the G8 as more than a hardware upgrade, describing it as a new platform that should support expanding service revenue over time as the company rolls out new apps and capabilities. He contrasted it with the G7, where customers typically acquired a service stack at the point of sale and maintained that level. With G8, he said Blackline expects it can continue adding service value throughout the device life cycle through apps, integrations, workflow tools, and productivity features, which management believes could lift ARR per device and strengthen retention over time.
Profitability, margins, and foreign exchange impacts
Adjusted EBITDA was CAD 1.7 million, up 12% from CAD 1.5 million in the year-ago quarter, marking Blackline’s seventh consecutive quarter of positive adjusted EBITDA. Slater said the result was notable given the costs and complexity of the G7-to-G8 transition.
Gross profit rose 13% year-over-year to CAD 25.3 million, and gross margin improved to 65% from 60% a year ago. Curry said service margins remained strong at approximately 81%, reflecting scale efficiencies and infrastructure optimization. Product gross margin was approximately 37%, down from 40% a year earlier, which management attributed primarily to product mix changes and costs associated with the initial setup of the G8. Curry said management expects some variability over the next couple of quarters before returning toward its target of 40% “and beyond.”
Total operating expenses for the quarter, excluding foreign exchange losses, were CAD 26.6 million, or 68% of revenue. Curry detailed the breakdown as CAD 8.7 million in G&A, CAD 12.0 million in sales and marketing, and CAD 5.9 million in product research and development. He said operating and sales and marketing expenses included G8 launch costs, while R&D reflected continued investment in the G8 platform and new service capabilities.
The company reported a net loss of CAD 2.8 million, which Curry said was meaningfully affected by U.S. dollar foreign exchange movements. Blackline recorded a CAD 1.5 million foreign exchange loss in Q1 compared with a CAD 1.2 million gain in the prior-year quarter, a CAD 2.7 million swing that he attributed to heightened U.S. dollar volatility driven by geopolitical uncertainties.
Liquidity and regional performance
Blackline ended the quarter with CAD 41.4 million in cash and cash equivalents. Curry said the company also had approximately CAD 29.9 million of available capacity on its senior secured operating facility, for total available liquidity of about CAD 71.3 million. Management said this provides flexibility to continue investing in G8 deployment, manufacturing expansions, and broader growth priorities.
By geography, the United States contributed CAD 17.8 million (46%) of total revenue, Europe CAD 10.4 million (27%), Canada CAD 7.1 million (18%), and the rest of world CAD 3.7 million (9%). Curry said rest of world revenue rose 50% year-over-year, driven by expansion in the UAE and scaling of the ADNOC deployment. Europe grew 14% year-over-year, while U.S. revenue declined 8% year-over-year due to elevated product purchases in the prior-year quarter that created a difficult comparison.
Middle East update and ADNOC relationship
Management addressed conditions in the Middle East, with Slater noting the company is closely monitoring the situation and prioritizing the safety and well-being of customers, partners, and team members in the UAE and across the region. Slater said the company’s partnership with ADNOC continues to progress, with new orders and ongoing deployment activity, and added that Blackline is seeing expanding interest from other organizations in the region.
In response to an analyst question about developments since quarter-end, management said it had not seen any measurable change in purchase orders or rental activity. Slater noted that evolving conditions could shift customer priorities in different directions, including toward worker safety, and said the company has remained in close contact with customers. Sean Stinson, president and chief growth officer, added that the company experienced some interruptions in AWS services in the region, but said the team reacted quickly to restore service. Stinson also said the UAE office remained open, though employees were asked to follow local shelter-in-place guidance and limit travel.
Looking ahead, Slater said the company remains confident in its trajectory for the balance of fiscal 2026, pointing to the scaling ADNOC relationship, a growing U.S. fire and HAZMAT pipeline, and what he described as building momentum for the G8 with customers and distributors.
About Blackline Safety (TSE:BLN)
Blackline Safety Corp is a connected safety monitoring technology company. It provides wearable safety technology, personal and area gas monitoring, cloud-connected software and data analytics to meet demanding safety challenges and increase productivity of organizations with coverage in more than 100 countries. Blackline Safety wearables provide a lifeline to tens of thousands of people, having reported over 161 billion data-points and initiated over five million emergency responses. Armed with cellular and satellite connectivity, the company ensure that help is never too far away.
