Black Diamond Group Limited ($BDI)

Thank you for standing by. My name is Jordan, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Black Diamond Group First Quarter 2026 Results Conference Call. [Operator Instructions] I would now like to turn the call over to Emma Covenden, VP, Investor and Stakeholder Relations. Please go ahead.

Thank you. Good morning, and welcome to Black Diamond Group's first quarter 2026 results conference call. With me this morning we have Chief Executive Officer, Trevor Haynes; Chief Financial Officer, Toby Labrie. Chief Operating Officer of Modular Space Solutions; Ted Redmond, Chief Operating Officer of Workforce Solutions, Mike Ridley; and President of Royal Camp Services, John Warren. Please be reminded that our discussion today may include forward-looking statements regarding Black Diamond's future results and that such statements are subject to a number of risks and uncertainties. Actual financial and operational results may differ materially from these forward-looking expectations. Management may also make reference to various non-GAAP financial measures in today's call such as adjusted EBITDA or net debt. For more information on these terms and others, please review the sections of Black Diamond's first quarter 2026 management action and analysis entitled Forward-Looking statements, risks and uncertainties and non-GAAP financial measures. This quarter's MD&A, financial statements and press release may be found on the company's website at www.blackdiamondgroup.com and also on the SEDAR+ website at www.sedar.ca. Dollar amounts discussed in today's call are expressed in Canadian dollars, unless noted otherwise and may be rounded. The format for today will be similar to prior calls. Trevor will start with a high-level overview of the company's performance and highlights from the quarter, including our view of the current and forward-looking operating environment. Trevor will then pass the call over to Toby for a more in-depth summary of the financials, including details of the quarter, and then we will open the line for question and answer. With that, I'll turn the call over to Trevor.

Thank you, Emma. And good morning, everyone. Thank you for joining our earnings conference call today. Yesterday afternoon, Black Diamond Group reported our first quarter 2026 results, showcasing continued stability across the platform. Consolidated revenue of $130 million increased by 27% with adjusted EBITDA of $32 million, up 21% in the comparative quarter. These results are inclusive of contribution from Royal Camp Services, which was acquired in November of 2025. Consolidated rental revenue increased 16% year-over-year to $43.8 million, driven by disciplined capital allocation for organic fleet growth, optimal and steady utilization and moderate rate improvement. Contracted future rental revenue totaled a robust $142.5 million at quarter end, which we continue to view as healthy and supportive of activity levels as we progress through the year and into the next. This trend of compounding performance across the business is not only a result of our well-defined growth strategies and strong leadership across the platform, but also the ability and character of our high-performance teams. Thank you all for your dedication to safety and serving our customers, disciplined focus on execution and relentless commitment in creating value for our stakeholders. Total capital expenditures were $16.8 million, consistent with the comparative quarter and capital commitments at quarter end totaled $26.5 million, largely allocated toward contract-backed asset additions. The organic reinvestment in the business underscores our commitment to putting our shareholders' capital to work prudently and in a manner that garners the highest rates of return. Given this, we will maintain our disciplined capital deployment approach and further scale our fleet in line with end market demand. Beyond organic growth of the business, the company is also well positioned to take advantage of all capital allocation mechanisms at our disposal, including accretive inorganic opportunities, debt repayment and return to shareholders through dividends or share buybacks. Our recent expansion of the asset-based lending facility to $550 million from $425 million with an uncommitted accordion of $75 million at preferred terms, insurers we have the financial flexibility to continue scaling business. Looking ahead, our outlook remains constructive, with convexity of optionality across the business. We continue to see stable baseline performance across all our operating businesses underpinned by high-margin recurring rental revenue and generally healthy end market dynamics across Canada, United States and Australia. For WFS, the breadth and volume of opportunities in our pipeline suggests that nation-building thematic in Canada is indeed a substance and the pending impact of asset deployment on fleet utilization is a matter of timing. We remain bullish on our ability to unlock the significant operating leverage in this area of the business, but caution a realistic assumption on the timing of this scenario. MSS remains a resilient cash-generative business with clear runway for growth, underpinned by strong fundamentals and tailwinds in the infrastructure and construction verticals. While U.S. public sector education funding uncertainty has impacted the cadence of new sales, we expect this to stabilize moving forward. Finally, we are encouraged by the exponential growth trends we're seeing in LodgeLink. This performance reinforces its accretive potential which we expect to compound as the platform moves toward general availability of its new generation 3.0 product as we exit 2026. To summarize, we are pleased with the results of the company in the first quarter and expect similar steady near-term performance to carry through the first half of the year with the potential for a more pronounced acceleration in the back quarters with strong financial flexibility, disciplined capital allocation, best-in-class operational execution and a growing base of high-margin rental revenue we are well positioned to continue compounding value through 2026 and beyond. With that, I'll now turn the call over to Toby.

Thanks, Trevor, and good morning, everyone. I'll focus today on the results of our segments, margins and balance sheet. First, I'll address earnings per share for the quarter while EPS declined $0.06 from the comparative quarter, the decrease was due to several circumstantial factors versus any indication of eroding business performance beyond its typical episodic nature as shown through our growing consolidated revenue, EBITDA and cash flow. First, the impact of depreciation and amortization related to the acquired Royal Camp business had a $0.075 impact on EPS. EPS was also impacted by shares issued in conjunction with the bought deal and acquisition of Royal Camp services last year, higher stock-based compensation due to the increased share price and moderated activity in the company's legacy WFS operations due to the prepayment of a large U.S. contract in Q4 2025, partially offset by meaningful contributions from Royal Camp and stable performance from MSS. With respect to specific business unit performance, I'll begin with Workforce Solutions, where revenue of $81.5 million increased 54% and adjusted EBITDA of $18.9 million was up 48% from the comparative quarter, driven primarily by large services growth and contributions from Royal Camp services. Utilization for the segment was 56.5%, leaving meaningful available fleet capacity as we look to significant opportunities on the horizon. MSS generated rental revenue of $26.8 million, up 5%, with adjusted EBITDA of $19.4 million, consistent year-over-year. Utilization remained within the optimal range at 77.7% and average monthly rates increased 3% on a constant currency basis. We continue to see strength in our value-added products and services with VAPS revenue increasing 35%, driving VAPS as a percentage of rental revenue to 10.8% which continues to be an important focus and driver of margin expansion. LodgeLink delivered a strong quarter with total trade value of $32.7 million, an increase of 52% generating net revenue of $3.7 million, up 37% and total travel segments increasing 15% to 154,979 from the comparative quarter. From a balance sheet perspective, net debt at quarter end was $330.7 million, with net debt to trailing 12-month adjusted leverage EBITDA of 2.1x remaining at the low end of our target leverage range. Liquidity at quarter end was $93.3 million prior to the $125 million expansion of the ABL facility, providing flexibility to support further growth. The average interest rate paid on debt during the quarter was 4.21%, which was 62 basis points lower than the comparative quarter as benchmark interest rates are lower year-over-year. Business' ability to generate stable and growing free cash flow supported by a strong balance sheet remains a defining characteristic of Black Diamond. In the first quarter of 2026, we generated $17.8 million of free cash flow, representing a 5% increase from the comparative quarter. We also continue to make progress on the ERP implementation. Total investment to date is approximately $9.3 million with roughly $2.6 million remaining. Project is on schedule with this phase of MSS and corporate scheduled to go live in the current quarter. To reiterate Trevor's comments, we remain confident in the performance of the business. The near-term outlook is steady from these first quarter results with meaningful improvements expected in the second half of 2026 due to seasonal education and construction sector related activity. We continue to gain confidence in a further potential positive inflection point beginning as early as late 2026 aligned with progress on major nation building, infrastructure and resource projects in Canada. While the timing of large-scale construction project starts often extends beyond initial expectations, their extended duration once underway, has historically provided durable multiyear demand that we believe we are well positioned to capture over time. With that, operator, I'll ask you to open the call for questions.

[Operator Instructions] Your first question comes from the line of Kyle McPhee from ATB Cormark.

I just want to start on the workforce demand wave on the way here. I'm hoping you can help us quantify some of the upside potential here. Do you expect to be able to start utilizing all of your unutilized camp fleet assets over the midterm? Is the demand coming down the pipe enough to soak up all of your excess suite notably when you layer in your odds of winning a chunk of this business on the way.

Kyle, thanks for the question. The simple answer is yes, although there's many factors involved. Certainly, what we're looking at here, from my perspective, having been involved in remote accommodation business for a better part of 40 years. I don't think I've ever seen a pipeline of active project bidding like we have today. And by that, I mean the breadth of what we're seeing certainly across pretty much every type of mining across the country as well as energy infrastructure basically coast to coast and across the north when you pull in the Canadian military initiatives. So from that perspective, we're very optimistic, and it's based on what we're seeing in our pipeline. When we add up the number of beds of demand when we think of everything that we're quoting to, it does exceed the available capacity. We've got about 6,000 beds of ready to deploy assets. So then we have to get into the nuance of, well, which projects go ahead in the near term and in what combination and how do we align. I would say, Mike, we're really well positioned with regard to our First Nations partners, our relationship with customers, et cetera, et cetera, our capabilities. Maybe add a little bit more granular color.

Yes. I mean, if and when these go, whether FID is later this year or early next year, Trevor's point with some of our partnerships that we have in Western Canada, in particular, we're very well positioned and poised to win our fair share of work. And even beyond these nation-building projects, the sales pipeline in all of our markets right now is very, very active. When you look at mining in Eastern Canada, for example, even in the West, construction, government spend, disaster relief, homelessness, oil and gas in the Duvernay and Montney is also very active. And then moving down into the U.S., solid oil and gas sector, construction, everybody's talking about data centers these days and what they bring and benefiting potentially for Black Diamond, not only our workforce business, but we're very active with our MSS business data centers as well. And then over in Australia, again, a really strong resource sector, construction, government, education. So yes, I would agree with Trevor's comments around -- I've been in the industry since '97. And in terms of what the sales pipeline looks like it's as strong as I've ever seen it.

As much as we talk about the timing with regard to major projects and sort of the front-end ramp-up characteristics of those projects. It's important to point out, there's many smaller projects around mining, et cetera that are mobilizing now. So there isn't this sort of gap we're looking at before the bigger projects pick up, and that's what gives us the confidence of current operating levels, John, anything to add from the Royal perspective. . I think quick to point out to investors, we now have the full menu, so to speak, of providing catering along with assets. So the opportunity is even bigger.

Yes, definitely. The timing is the key thing. Even with some starting what's coming off and how do those roll into the other projects, I think that will be a big part of it. So -- and then as far as the operational side goes, ramping up for that, I think we have good opportunity to roll the operations into those different projects as they come on.

To summarize, Kyle, we really like what we're looking at in our opportunity pipeline. We're very active, and we do believe we're really well positioned with the great Royal team and platform added to the Black Diamond capabilities. So we just need the thematic to evolve for the next months. And we believe we'll see activity gradually climbing.

Okay. That's a lot of good color. Really appreciate it. Trevor, you mentioned you add up the total potential pipeline of sector-wide bed demand. Can you share what that kind of total pipeline number is sector-wide?

Well, it's complicated because you get some elements of duplication where you have multiple subcontractors bidding on the same pipeline project, et cetera. So it's difficult for us to comment. I would say it's netting out of that, I mean, we're well in excess of $1 billion of high-quality outstanding bids, that's being somewhat conservative. I'm sure you can get read-throughs from some of our general contractor customer partners and what they're looking at and how they talk about their pipeline, et cetera. I think ours would chime with theirs. .

Yes. And I'm not even just talking specific to Black Diamond. Just if all projects in the pipeline come to fruition sector-wide, how many more beds are needed. I think some of your peers are kind of softly indicating 10,000 to 15,000 more beds, maybe more, does that sound ballpark accurate?

Certainly. I think it's a scenario if all of these large projects go ahead, most of the existing beds, you can decide who wins prime contracts, et cetera, and how we organize amongst the industry. But pretty much everything existing will be needed to go out. And then we get into a question of been a long time since any meaningful capacity has been built for remote accommodation in Canada. So what is the capacity of the supply chain, and it's sort of an open question. But what we want to focus on currently is making sure we're positioned to service our customers on the immediate opportunity, and we've got a reasonable amount of capacity to match with that. And as we work through it, we'll start taking up -- the question of how to strategically add capacity if that's what's needed.

And do you expect this type of demand to benefit your MSS segment as well. I mean you just briefly mentioned the U.S. data centers might benefit both segments. But all these big infrastructure projects across Canada. Is that WFS beneficiary only? Or do you expect it to be meaningful for MSS?

No, it's absolutely an opportunity for the MSS platform as well. All of these remote locations also require the temporary project office, hard well laboratories, security, training buildings, all over these project sites, and then areas of infrastructure build that aren't remote and don't require or not to the extent that the truly remote projects do require temporary accommodation for trades, they still require the site infrastructure for all the various types of temporary buildings. So we think the thematic applies to both MSS and WFS. And then, Ted, when we look at the U.S. side for MSS, the data center opportunity is much bigger for our BOXX Modular platform than for our workforce platform. And maybe bit of color on that, Toby.

Yes. These data center projects are large construction projects. The data center trend has been going on for 10 years, and we've been participating in it over the last 10 years. What's changed is the dollars being put into it increase dramatically and I think there's well over $1 trillion of data center projects in the U.S. So we're participating in this growth. We've got long-term contractor customers who were renting construction complexes to how is their construction staff. And once you get on a project to keep adding in more buildings on the sites that they have. So once you get on a site, your buildings stay on for quite a long time. So we're currently on a significant number of data centers, and we think that, that's going to continue.

If we switch back to the Canadian nation building thematic -- in Ontario, Darlington, et cetera, Bruce, infrastructure and around our major cities, high-speed rail. This is all right down the fairway for MSS debt.

There's almost $1 trillion of Canadian infrastructure projects, all the ones ever mentioned. And we're strong in the Ontario market. We're already working on a number of those infrastructure projects and bidding on the ones that are coming forward. .

Your network question comes from the line of Frederic Bastien from Raymond James.

It's been, I guess, nearly 6 months that you've had that Royal has been under your ownership. Can you just indicate how well the acquisition is going? Is it going as planned? Any anything that we -- you can point to that would help in our modeling as well.

The integration until we've done close to 35 acquisitions, many great outcomes. I would say so far with Royal, it's probably the quickest and most seamless integration from a people perspective. Really great alignment. The Royal team are really good solid group of professionals, and it's fit in well with our team. So we're already working in concert on the commercial side. And looking at all the assets as one asset pool as we match up against opportunities. So from that perspective, it's gone well. Some of the synergies, I think, Mike and John we've replaced external caterers with Royal to a really positive effect and picked up an element of margin in operated facilities. And it takes a bit longer on the system side for switchover of ERP, et cetera. But I would say, from integration, that's the work that's left to do, but a big risk of whether or not the businesses have good social fit, I think, is pretty low. And John, maybe you can.

Yes. I honestly couldn't see it pulling any better. the 6 months is just formed. It seems like in the way it was yesterday, but it seems like it was so far back. The teams just came together in every department very well. our IT is fully integrated now. We're on the Black Diamond platform going very well. The catering operations, it's onset Prairie -- we're getting great actuate there, as you mentioned, now we're getting that margin. So we moved into a couple of drill counts as well, and we're working together on that. And then the cross-marketing the platforms roughly speaking about and how we can bring MSS into workforce, and we've got several units at the place in different locations. Very happy with it.

I think the exciting part is being able to bring the full turnkey across the Black Diamond platform and the asset platform to the Royal. The upside is in the new revenues we should be able to capture will be more difficult on our own. Hopefully, that addresses your question, Frederic.

Yes, that's helpful. Could you address seasonality of the business? How do we think about historically as we go into the spring breakup, things slow down with respect to energy services company, how is Royal similar to that or not similar? .

When you think about the energy sector, the way it works today is much different than the old shallow drilling days. I mean we see less and less seasonality, but I'll let John might comment on that. .

Up in some of the open camps, we do have the drilling rigs that do quiet down for pretty much the month of April. But it's also the start of turnaround season. But we lost in drilling, we gained a turnaround and right behind that international around the oil sands. Yes, the oil sand side of things. So -- and we're starting to see the rig starting to come back in May. So it was a very short break up. It's not like it was 10 years ago or 15 years ago, where it would be a 3-month season, where it was very quiet.

So equal to point out a lot of the Royal revenue comes from long-term operating camps, where Royal is providing the turnkey service, a good deal of that is mining related.

And mining very it's constant. It doesn't really have a season where it spills up.

So a little less seasonality -- currently and going forward is our expectation.

And just 1 I feel like I talk about it every quarter is just, again, our core strategy in being more diversified and not necessarily focused on oil and gas, I think it really balances out the year very nicely in terms of the tight work that we're focused on in all sectors where it is much less seasonal than it was to John and Trevor's point years ago.

Awesome. And one more for me, please. MSS, obviously, you have grown this business through acquisition in the past. You were busy on the workforce side last year. You also did an acquisition in LodgeLink. How's the M&A landscape looking for that particular space rentals business?

Yes, we maintain healthy pipeline, as you know, ebbs and flows, the number of platforms that are looking to sell also, we have competition. So we start to predict when and whether we're able to complete something, but we're always working on it. And I think we've got a pretty good reputation in our industries as good buyers. I would point out on the MSS side, the industry is more and more consolidated. And so there's just fewer pieces out there. And so our first means of growth is organic and where we have strong end market demand. We're leaning in, it's a lower risk, actually higher return debt way to grow. And if we can augment that with some tuck-ins, we'd be very happy. I don't know if there's anything you would add there, Ted.

Well, we're putting out a significant amount of capital over the last 5 years. And our target is to have good, strong organic growth. So we've got a whole series of growth strategies we're working on around that. And we're definitely looking for opportunities in all of our markets where we've got high utilization by customer demand, and we just -- we try to make sure that we have the fleet available to meet that customer demand.

We've got the dry powder to transact. So for all the analysts on the call, maybe not your investment bankers to bring us some fantastic ideas.

Your next question comes from the line of Razi Hasan from Paradigm Capital.

Maybe just one on gross margin. Could you maybe give us some indication on how you see gross margin levels through the remainder of the year?

Thanks for the question. I think let's go straight to you, Toby.

Yes. Thanks, Razi, for the question. our margins within our existing revenue streams are -- continue to remain fairly consistent. We expect those to remain fairly consistent. So the biggest fluctuation you'll see is generally with the revenue mix itself. And so as we have higher rental revenue -- rental revenue being our highest margin business, lodging kind of following up as the second and then our nonrental being the lower margin business. So as that mix changes from quarter-to-quarter, you'll see changes in our overall margin levels. So with Q1 being relatively late on sales and nonrental seeing a bit higher gross margin levels overall. And as we see higher sales volumes and higher overall revenue typically in Q3 when we have more education, sales and nonrental-related activity, in particular, we tend to see a bit our overall margins dropping a little bit. But overall, on a full year basis, we expect things to be pretty consistent year-over-year.

Okay. That's helpful. And then maybe just one more. I think you mentioned earlier, Trevor, just in regards to having a realistic time line for capital deployment on nation-building projects. Could you maybe talk about how you think utilization levels in the workforce segment carry through for the remainder of the year, you're at 56.5% or so now. How do you see that ending by the end of the year?

Yes. I mean that's something we look at and try to forecast out here. It's not an exact science because even when projects go to field level execution, and we expect -- that are in the headlines to move forward this year. The front-end work of preparing sites and starting to move the initial capacity for housing trades. There's a ramp-up element to it. Some of these locations are complicated, impacted by weather and various restrictions on action, et cetera. So what we expect to see is being able to give indication that we are mobilizing on larger projects, and then you would see operations type of revenue upfront as we begin to move assets in place and then a wrap-up on each project as the capacity grows to peak demand alongside of the number of trades that are going into the site. That isn't exactly a 1% increment, they do go out in blocks. And so you're going to see these sort of staircase step changes in utilization as we progress to a higher utilization run so I'm not sure if that's a very precise answer for you, but that's the way we think about what happens over the next 3, 4, 5 quarters here.

The next question comes from the line of John Gibson from BMO Capital Markets.

When we think about unused capacity out there for workforce, you and your peers report in the mid-50s utilization, but based on increasing work in labor housing requirements is most of this equipment able to go back to work or could we reach a point where we maybe need new build workforce holding more quickly than expected?

John, thanks. To begin with characterizing the condition of our unutilized fleet, our view is that when we talked about 6,000 beds of capacity that essentially all of that is in market ready condition. There's always a little bit of work as we assemble them, an air conditioner might not turn on or something, and so we have a little bit of maintenance capital. So we do believe that the fleet is ready for market. As we said earlier, based on what we see in the pipeline there are scenarios where demand could exceed our internal capacity. We think we've got arrangements in place that would allow us to access other equipment existing in the market, be able to meet demand prior to backing the decision of how to add new manufacturing capacity into our system or into our industry. So we kind of have a sort of a staged view of how utilization may exceed what we have available in our system. But again, our capacity is marketable with very little capital required to get it to market. If that's the primary question. .

Yes. I guess what I was -- that answered my question mostly. I just was wondering like, are we seeing a higher level of customization now that may require some new build equipment if not -- your existing more closer than expected?

Yes. I don't think much. I mean we are putting -- just to sort of add on the Trevor, I think the short answer is that most of our units are ready to go with minimal capital required to get into the market. Customization, project-specific with good term, good customers, good returns. We will certainly look at deploying capital in that regard -- some of our other asset types or subscribers are small format asset, we are adding capital in that area, 3-person sleepers, 4-person sleepers, self-contained units -- camps. Not necessarily a huge piece of the pie, but we're putting capital into that to serve some of the changing dynamics in the oil and gas sector, for example, what the market is demanding.

And it's also because we're essentially fully utilized with those managers that were more streaming in the Montney.

Yes. And with that, we're seeing reimprovement in that particular area as well. So yes. The base large format fleet though is ready to go. Sorry, just going to mention the type of fleet that we have goes well with the demand the layouts and such is exactly what is being asked for.

Predominantly private watch format.

The combination of Black Diamond and Royal fleet just mention it as well.

No, that's great. That answers it. Second one, can you talk more specifically about military-related spending and how you're positioned, are you seeing demand on the WFS or MSS side and just, I guess, how are you positioned with government qualifications, that sort of stuff to win your share work there?

Yes. Interestingly, we've been spending time building relationships with Canadian military and government procurement part of, say, 4 years in a and also handles our government relations. So we've positioned ourselves quite well with our security clearances and certifications, et cetera, we did create a new corporate entity called Black Diamond Defense Services based in Ottawa with the skill sets for being able to effectively interact and work those customers on the specifics of what they need. And so when we think about that, it's opportunity for all 3 businesses. and assess WFS as well as LodgeLink. And with various partners to take on expanded scope to provide larger turnkey contract outcomes for Canadian military. We're running in parallel or some opportunities that are moving forward quite quickly. And so I think, like John, we're going to see project deployment of some magnitude, likely over the next 6 months and revenue from military.

Yes. It's -- we've got a project we're working on right now that potentially is looking good for Q3 for deployment and operations to handle workforce accommodations on one of those projects.

Structure build and it should be 5, 6, 7 years -- so short answer, we've been working on it for a while. We're positioning as best we can, and we've got real opportunities in that vertical. .

Okay. Great. Appreciate that. Last one for me. originates. So what percentage of your U.S. business would be data center levered now? And where going this get to over the next few years?

I'm not sure we have that on hand, Ted, but maybe you do.

Yes. I don't have an exact number for you. I think it's increasing part of our business. Our business is very diversified. We're in many of the major markets in the U.S. Southwest and the U.S. East, those cities have a lot of different projects going on them, data centers, are not uniformly distributed. There are some states where there's more data centers like Texas, and we've got significant data center activity in Texas. Other states are less data center friendly. So it is a much less than 50% of our construction activity in construction. If you look at our MD&A, you can see is only a portion of our total revenue. So it's a meaningful but and growing segment or business.

Your next question comes from the line of [indiscernible] from Canaccord Genuity.

I'm filling in for Matt. You've indicated LodgeLink 3.0 is progressing towards general availability. Could you give us some color on the time line? And how should we expect the economics of the new platform relative to the current platform? Kind of more specifically, does it improve revenue margin subsidy? Or do you see like more ward-driven benefits?

Yes. Thank you for the question. We're really excited about what's happening at LodgeLink. We've done a lot of work in positioning LodgeLink for its next phase, and we've been working at that as we've talked about 3.0 for the better part of 15, 16 months now. The new product, which is sort of a much more integrated, more dynamic type of workforce -- solution is really compelling. We're in -- we're just moving from pilot phase to advanced pilot. We expect to have the product in beta this summer and at a certain point this fall, don't have an exact date yet. We'll see how beta goes. We expect to have general availability or GA. As we get there, there'll be a maturing of the revenue model that we anticipate will bring in a new type of user revenue to add to the margins that we enjoy on the supply and through our intermediary partners. At the same time, our customer sign-ups, even prior to 3.0 availability have been really quite strong and retention of our largest long-term customers continues to be high 90s to 100%. So we've got lots of validation points that what we're doing is adding value in the ecosystem of demand and supply. And really, what we're doing here is really complicated itineraries moving large groups of people around. So we're really excited. We think we'll get to GA later this year. Quickly, the inflection point will show. Certainly, our KPIs will give a strong indication, but it is business-to-business sale and business to business sort of operational behavior will change for our customers' teams. And so there's an element of transition time line there. but we hope to have some really good data points to indicate whether the market -- product is hitting the market or the target market by late this year. Nothing has changed in our view about how large the stressable market is. We've got good traction in Australia, and we're looking more broadly at Asia Pacific and we just think this is going to be a tremendous part of our business as we continue to move through the next phase. So thank you for asking.

Yes, that's very helpful. Just one more for me. With regards to the Spencer Group integration this quarter, you -- the money compression this quarter you attributed to Spencer Group corporate travel mix. Is 11%, 11.5% the right steady-state margin that we expect for LodgeLink? Or do you expect say, the crew accommodation business to reaccelerate and pull up the blended margin back to the 12%, 13% range we've seen before the acquisition.

The blended margin. If we look at the business without the Spencer revenues added, we actually had slight margin improvement that we would ascribe to elements of economy of scale as we're just handling more and more volume. When we blend in the more traditional travel management revenue streams, the margins are lower, but it's a profitable small business part of our LodgeLink platform. Mostly the intent was to get infrastructure, the IATA licenses, et cetera, to be able to grow our LodgeLink business in Australia. So why do I point that out? Because we anticipate seeing significant growth on the LodgeLink side, moderate growth on the traditional travel management. And so the margins even on a blended basis will increasingly be influenced by the LodgeLink side. So you should see gradual improvement as that mix changes based on the different growth levels of the 2 types of revenue stream. Hopefully, that makes sense to you. I don't know, Toby, if I explained that well enough.

Yes. Yes, I think that's right. I think the -- you saw the margins blend down even though we were seeing margin expansion year-over-year. But as Trevor mentioned, as we continue to see that mix of revenue shift towards stronger growth on the accommodation side. We should see that on a sequential quarterly basis continue to improve.

That concludes the question-and-answer session. I would now like to turn it over to Trevor Haynes for closing remarks.

Thank you. Thank you, everyone, for joining today. Once again, we're pretty pleased with how the business is operating. We think we've got a great deal of optionality as we look forward with a nice stable base and compounding our business here. And thanks again to our teams across the platform for their great work. Hope everybody has a great day and a good weekend. Thank you.

That concludes today's meeting. You may now disconnect.