BlackLine Announces Second Quarter Financial Results

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Insights

BlackLine's Q2 2024 results demonstrate solid financial performance with notable improvements in key metrics. Total GAAP revenues increased by 11% year-over-year to $160.5 million, surpassing expectations. The company's profitability showed significant improvement, with non-GAAP operating margin expanding to 19.8% from 13.4% in Q2 2023.

The robust free cash flow of $34.4 million, up from $18.0 million last year, indicates strong operational efficiency. However, the dollar-based net revenue retention rate of 104% suggests moderate expansion within existing customers. The addition of 24 net new customers brings the total to 4,435, reflecting steady growth in the customer base.

The company's debt management strategy is noteworthy, with the full repayment of $250.0 million 2024 convertible senior notes and the issuance of $675.0 million 2029 convertible senior notes, potentially improving the company's financial flexibility.

BlackLine's commitment to AI-powered solutions for the Office of the CFO demonstrates a forward-thinking approach to product development. This focus on advanced capabilities aligns with industry trends towards automation and intelligent financial processes. The company's recognition as a leader in finance and accounting platforms by ISG further validates its technological prowess.

The expansion of BlackLine's user base to 396,366 indicates growing adoption of its solutions. The announcement that Financial Reporting Analytics will be sold as an SAP Solution Extension is a strategic move that could potentially broaden BlackLine's market reach and strengthen its position in the enterprise software ecosystem.

While specific AI implementations aren't detailed, the emphasis on equipping customers with tools for future challenges suggests ongoing innovation. This proactive stance in technology development could be a key differentiator in the competitive financial software market.

BlackLine's Q2 performance and future outlook paint a picture of steady growth and market adaptation. The company's ability to exceed revenue and profitability expectations in a challenging economic environment is commendable. The raised full-year 2024 guidance, with expected total GAAP revenue between $647.0 million and $651.0 million, reflects confidence in continued growth.

The company's focus on operational excellence and customer-centric approach appears to be yielding results. However, the modest net new customer additions (24 in Q2) and the dollar-based net revenue retention rate of 104% suggest potential challenges in accelerating new customer acquisition and expanding within the existing base.

BlackLine's strategic moves, such as the SAP Solution Extension partnership and investment in AI capabilities, position it well for future market demands. The company's leadership in finance and accounting platforms, as recognized by ISG, could be leveraged for market expansion and increased penetration in the CFO office solutions space.

08/06/2024 - 04:05 PM

LOS ANGELES, Aug. 06, 2024 (GLOBE NEWSWIRE) -- BlackLine, Inc. (Nasdaq: BL), today announced financial results for the second quarter ended June 30, 2024.

“BlackLine delivered solid results this quarter, exceeding our revenue and profitability expectations, while continuing to generate robust free cash flow,” said Owen Ryan, co-CEO of BlackLine. “Our teams are relentlessly pursuing higher levels of operational excellence, aligned to our strategy and driven by our customer-focused operating model.”

“Our commitment to delivering value for the Office of the CFO is unwavering,” said Therese Tucker, co-CEO of BlackLine. “By developing and offering increasingly advanced solutions and capabilities, including those powered by AI, we are committed to solving the complex problems our customers face today. At the same time, we are equipping them with the tools and insights needed to solve tomorrow’s challenges, ensuring they are well-prepared for future growth and success.”

Second Quarter 2024 Financial Highlights

Total GAAP revenues of $160.5 million, an increase of 11% compared to the second quarter of 2023.
GAAP operating margin of 1.4%, compared to 12.4%¹ in the second quarter of 2023.
Non-GAAP operating margin of 19.8%, compared to 13.4% in the second quarter of 2023.
GAAP net income attributable to BlackLine of $76.7 million, or $0.22² per diluted share compared to GAAP net income attributable to BlackLine of $30.8 million or $0.45 per diluted share in the second quarter of 2023.
Non-GAAP net income attributable to BlackLine of $42.9 million or $0.58 per diluted share compared to non-GAAP net income attributable to BlackLine of $30.7 million or $0.41 per diluted share in the second quarter of 2023.
Operating cash flow of $40.7 million, compared to $24.6 million in the second quarter of 2023.
Free cash flow of $34.4 million, compared to $18.0 million in the second quarter of 2023.

Second Quarter Key Metrics and Recent Business Highlights

Added 24 net new customers in the second quarter for a total of 4,435 customers at June 30, 2024.
Expanded the Company’s user base to 396,366 users at June 30, 2024.
Achieved a dollar-based net revenue retention rate of 104% at June 30, 2024.
Repaid in full, the Company’s $250.0 million 2024 convertible senior notes.
Announced that Financial Reporting Analytics will be sold as an SAP Solution Extension.
Named as a leader in two categories in a new finance and accounting platforms report by Information Services Group (ISG).
Announced and closed a private offering of $675.0 million 2029 convertible senior notes and concurrent repayment of $919.8 million of existing 2026 convertible senior notes.

The financial results included in this press release are preliminary and subject to final review. Financial results will not be final until BlackLine files its Quarterly Report on Form 10-Q for the period. Information about BlackLine’s use of non-GAAP financial measures is provided below under “Use of Non-GAAP Financial Measures.”

________________________
_{¹ Reflects $25.5 million reversal of expense due to the decrease in the fair value of contingent consideration.
² Excludes the after-tax impact of the gain on extinguishment of debt associated with the partial repurchase of the 2026 convertible senior notes.}

Financial Outlook

Third Quarter 2024

Total GAAP revenue is expected to be in the range of $162 million to $164 million.
Non-GAAP operating margin is expected to be in the range of 19.0% to 20.0%.
Non-GAAP net income attributable to BlackLine is expected to be in the range of $38 million to $40 million, or $0.49 to $0.52 per share on 77.0 million diluted weighted average shares outstanding.

Full Year 2024

Total GAAP revenue is expected to be in the range of $647.0 million to $651.0 million.
Non-GAAP operating margin is expected to be in the range of 18.0% to 19.0%.
Non-GAAP net income attributable to BlackLine is expected to be in the range of $158 million to $168 million, or $2.08 to $2.21 per share on 76.1 million diluted weighted average shares outstanding.

Guidance for non-GAAP operating margin, non-GAAP net income attributable to BlackLine, and non-GAAP net income attributable to BlackLine per share excludes specified items from the corresponding GAAP financial measures as outlined below under “Use of Non-GAAP Financial Measures” and as detailed in the reconciliations of non-GAAP measures for historical periods. Reconciliations of non-GAAP operating margin, non-GAAP net income attributable to BlackLine, and non-GAAP net income attributable to BlackLine per share guidance to the most directly comparable U.S. GAAP measures are not available on a forward-looking basis without unreasonable efforts due to the unpredictability and complexity of the charges excluded from these non-GAAP financial measures. The Company expects the variability of the above items could have a significant, and potentially unpredictable, impact on its future GAAP operating margin, net income attributable to BlackLine, and net income attributable to BlackLine per share.

Quarterly Conference Call

BlackLine will hold a conference call to discuss its second quarter results at 2:00 p.m. Pacific time on Tuesday, August 6, 2024. A live audio webcast will be accessible on BlackLine’s investor relations website at https://investors.blackline.com. Participants can preregister for the conference call. A replay of the webcast will be available at https://investors.blackline.com for 12 months. BlackLine has used, and intends to continue to use, its Investor Relations website as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

About BlackLine

Companies come to BlackLine (Nasdaq: BL) because their traditional manual accounting and finance processes are not sustainable. BlackLine’s market-leading cloud platform and customer service help companies move to modern accounting by unifying their data and processes, automating repetitive work, and driving accountability through visibility. BlackLine provides solutions to manage and automate financial close, intercompany accounting, invoice-to-cash, and consolidation processes, inspiring, powering, and guiding large enterprises and midsize businesses on their digital finance transformation journeys.

More than 4,400 customers trust BlackLine to help them close faster with complete and accurate results. The Company is the pioneer of the cloud financial close market and is recognized as the leader by customers at leading end-user review sites including G2 and TrustRadius. BlackLine is a global company with operations in major business centers including Los Angeles, New York, the San Francisco Bay area, London, Paris, Frankfurt, Tokyo, Sydney, Bangalore and Singapore.

For more information, please visit blackline.com.

Forward-looking Statements

This release and the conference call referenced above contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expect,” “plan,” anticipate,” “believe,” “estimate,” “predict,” “intend,” “potential,” “would,” “continue,” “ongoing” or the negative of these terms or other comparable terminology. Forward-looking statements in this release and quarterly conference call include, but are not limited to, statements regarding BlackLine’s future financial and operational performance, including, without limitation, GAAP and non-GAAP guidance for the third quarter and full year of 2024, the impact of progress against certain key initiatives, our expectations for our business, including the demand environment, BlackLine’s addressable market, market position and pipeline, our international growth, and our relationships with our customers and partners, including opportunities to expand those relationships.

Any forward-looking statements contained in this press release or the quarterly conference call are based upon BlackLine’s historical performance and its current plans, estimates and expectations and are not a representation that such plans, estimates, or expectations will be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith beliefs and assumptions as of that time with respect to future events, and are subject to risks and uncertainties. If any of these risks or uncertainties materialize or if any assumptions prove incorrect, actual performance or results may differ materially from those expressed in or suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to risks related to the Company’s ability to attract new customers and expand sales to existing customers; the extent to which customers renew their subscription agreements or increase the number of users; the impact of current and future economic uncertainty and other unfavorable conditions in the Company's industry or the global economy, the Company’s ability to manage growth and scale effectively, including entry into new geographies; the Company’s ability to provide successful enhancements, new features and modifications to its software solutions; the Company’s ability to develop new products and software solutions and the success of any new product and service introductions; the Company's ability to effectively incorporate artificial intelligence and machine learning technologies (AI/ML) into its platform and business and the potential reputational harm or legal liability that may result from the use of AI/ML solutions and features; the success of the Company’s strategic relationships with technology vendors and business process outsourcers, channel partners and alliance partners; any breaches of the Company’s security measures; a disruption in the Company’s hosting network infrastructure; costs and reputational harm that could result from defects in the Company’s solution; the loss of any key employees; continued strong demand for the Company’s software in the United States, Europe, Asia Pacific, and Latin America; the Company’s ability to compete as the financial close management provider for organizations of all sizes; the timing and success of solutions offered by competitors; including competitors' ability to incorporate AI/ML into products and offerings more quickly or successfully; changes in the proportion of the Company’s customer base that is comprised of enterprise or mid-sized organizations; the Company’s ability to expand and effectively manage its sales teams and their performance and productivity; fluctuations in our financial results due to long and increasingly variable sales cycles, failure to protect the Company’s intellectual property; the Company’s ability to integrate acquired businesses and technologies successfully or achieve the expected benefits of such transactions; unpredictable and uncertain macro and regional economic conditions; seasonality; changes in current tax or accounting rules; cyber attacks and the risk that the Company’s security measures may not be sufficient to secure its customer or confidential data adequately; acts of terrorism or other vandalism, war or natural disasters including the effects of climate change; the impact of any determination of deficiencies or weaknesses in our internal controls and processes; and other risks and uncertainties described in the other filings we make with the Securities and Exchange Commission from time to time, including the risks described under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission on February 23, 2024. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024. Forward-looking statements should not be read as a guarantee of future performance or results, and you should not place undue reliance on such statements. Except as required by law, we do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. All of the information in this press release is subject to completion of our quarterly review process.

Use of Non-GAAP Financial Measures

To supplement its consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles, or GAAP, BlackLine has provided in this release and the quarterly conference call held on August 6, 2024, certain financial measures that have not been prepared in accordance with GAAP defined as “non-GAAP financial measures,” which include (i) non-GAAP gross profit and non-GAAP gross margin, (ii) non-GAAP operating expenses, (iii) non-GAAP operating income (loss) and non-GAAP operating margin, (iv) non-GAAP net income (loss) attributable to BlackLine, Inc. (v) diluted non-GAAP net income (loss) attributable to BlackLine, Inc. per share, and (v) free cash flow.

BlackLine’s management uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to the corresponding GAAP measures, in evaluating BlackLine’s ongoing operational performance and trends and in comparing its financial measures with other companies in the same industry, many of which present similar non-GAAP financial measures to help investors understand the operational performance of their businesses. However, it is important to note that the particular items BlackLine excludes from, or includes in, its non-GAAP financial measures may differ from the items excluded from, or included in, similar non-GAAP financial measures used by other companies in the same industry. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. A reconciliation of the non-GAAP financial measures to such GAAP measures has been provided in the tables included as part of this press release.

Non-GAAP Gross Profit and Non-GAAP Gross Margin. Non-GAAP gross profit is defined as GAAP revenues less GAAP cost of revenue adjusted for amortization of acquired developed technology, stock-based compensation, and transaction-related costs (including, but not limited to, accounting, legal, and advisory fees related to the transaction, as well as transaction-related retention bonuses). Non-GAAP gross margin is defined as non-GAAP gross profit divided by GAAP revenues. BlackLine believes that presenting non-GAAP gross profit and non-GAAP gross margin is useful to investors as it eliminates the impact of certain non-cash expenses and allows a direct comparison between periods.

Non-GAAP Operating Expenses. Non-GAAP operating expenses include (a) non-GAAP sales and marketing expense, (b) non-GAAP research and development expense and (c) non-GAAP general and administrative expense. Non-GAAP sales and marketing expense is defined as GAAP sales and marketing expense adjusted for amortization of intangible assets, stock-based compensation, and transaction-related costs. Non-GAAP research and development expense is defined as GAAP research and development expense adjusted for stock-based compensation and transaction-related costs. Non-GAAP general and administrative expense is defined as GAAP general and administrative expense adjusted for amortization of intangible assets, stock-based compensation, change in fair value of contingent consideration, transaction-related costs, and legal settlement gains or costs. BlackLine believes that presenting each of the non-GAAP operating expenses is useful to investors as it eliminates the impact of certain cash and non-cash expenses and allows a direct comparison of operating expenses between periods.

Non-GAAP Income (Loss) from Operations and Non-GAAP Operating Margin. Non-GAAP income (loss) from operations is defined as GAAP income (loss) from operations adjusted for amortization of intangible assets, stock-based compensation, change in fair value of contingent consideration, transaction-related costs, legal settlement gains or costs and restructuring costs. Non-GAAP operating margin is defined as non-GAAP income (loss) from operations divided by GAAP revenues. The Company believes that presenting non-GAAP income (loss) from operations and non-GAAP operating margin is useful to investors as it eliminates the impact of items that have been impacted by the Company’s acquisitions and other related costs in order to allow a direct comparison of income (loss) from operations between all periods presented.

Non-GAAP Net Income (Loss) Attributable to BlackLine and Diluted Non-GAAP Net Income (Loss) Attributable to BlackLine, Inc. Per Share. Non-GAAP net income (loss) attributable to BlackLine is defined as GAAP net income (loss) attributable to BlackLine adjusted for the impact of the provision for (benefit from) income taxes related to acquisitions, amortization of intangible assets, stock-based compensation, amortization of debt issuance costs from our convertible notes, change in fair value of contingent consideration, transaction-related costs, legal settlement gains or costs, restructuring costs, adjustment to the redeemable non-controlling interest to the redemption amount, and gain on extinguishment of convertible senior notes. Diluted non-GAAP net income (loss) attributable to BlackLine, Inc. per share includes the adjustment for shares resulting from the elimination of stock-based compensation. The Company believes that presenting non-GAAP net income (loss) attributable to BlackLine is useful to investors as it eliminates the impact of items that have been impacted by the Company’s acquisitions and other related costs to allow a direct comparison of net income (loss) between all periods presented.

Free Cash Flow. Free cash flow is defined as cash flows provided by (used in) operating activities less cash flows used to purchase property and equipment, financed and otherwise, capitalized software development, and intangible assets. BlackLine believes that presenting free cash flow is useful to investors as it provides a measure of the Company’s liquidity used by management to evaluate the amount of cash generated by the Company’s business including the impact of purchases of property and equipment and cost of capitalized software development.

Use of Operating Metrics

BlackLine has provided in this release and the quarterly conference call held on August 6, 2024 certain operating metrics, including (i) number of customers, (ii) number of users, and (iii) dollar-based net revenue retention rate, which BlackLine uses to evaluate its business, measure its performance, identify trends affecting its business, formulate financial projections and make strategic decisions. These operating metrics exclude the impact of certain Runbook licensed customers and users who are on perpetual license agreements and did not have an active subscription agreement with BlackLine as of June 30, 2024.

Dollar-based Net Revenue Retention Rate. Dollar-based net revenue retention rate is calculated as the implied monthly subscription and support revenue at the end of a period for the base set of customers from which the Company generated subscription revenue in the year prior to the calculation, divided by the implied monthly subscription and support revenue one year prior to the date of calculation for that same customer base. This calculation does not reflect implied monthly subscription and support revenue for new customers added during the one-year period but does include the effect of customers who terminated during the period. Implied monthly subscription and support revenue is defined as the total amount of minimum subscription and support revenue contractually committed to, under each of BlackLine’s customer agreements over the entire term of the agreement, divided by the number of months in the term of the agreement. BlackLine believes that dollar-based net revenue retention rate is an important metric to measure the long-term value of customer agreements and the Company’s ability to retain and grow its relationships with existing customers over time.

Number of Customers. A customer is defined as a company that contributes to our subscription and support revenue as of the measurement date. In situations where an organization has multiple subsidiaries or divisions, each entity that is invoiced as a separate entity is treated as a separate customer. In an instance where an existing customer requests its invoice be divided for the sole purpose of restructuring its internal billing arrangement without any incremental increase in revenue, such customer continues to be treated as a single customer. BlackLine believes that its ability to expand its customer base is an indicator of the Company’s market penetration and the growth of its business.

Number of Users. Historically, BlackLine’s products were priced based on the number of users of its platform. Over time, the Company has begun to sell an increasing number of non-user based products with fixed or transaction-based pricing. For this reason, we believe the growth in the number of total users is less correlated to the growth of the business overall.

Media Contact:
Samantha Darilek
samantha.darilek@blackline.com

Investor Relations Contact:
Matt Humphries, CFA
matt.humphries@blackline.com


BlackLine, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
	June 30, 2024			December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	616,629		$	271,117
Marketable securities		428,461			933,355
Accounts receivable, net of allowances		137,439			171,608
Prepaid expenses and other current assets		27,677			31,244
Total current assets		1,210,206			1,407,324
Capitalized software development costs, net		40,873			37,828
Property and equipment, net		11,791			14,867
Intangible assets, net		68,665			79,056
Goodwill		448,965			448,965
Operating lease right-of-use assets		18,245			19,173
Other assets		91,937			93,552
Total assets	$	1,890,682		$	2,100,765

LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	2,083		$	8,623
Accrued expenses and other current liabilities		51,924			59,690
Deferred revenue, current		311,256			320,133
Finance lease liabilities, current		469			778
Operating lease liabilities, current		4,035			4,108
Convertible senior notes, net, current		249,888			249,233
Total current liabilities		619,655			642,565
Finance lease liabilities, noncurrent		—			4
Operating lease liabilities, noncurrent		14,426			15,738
Convertible senior notes, net, noncurrent		890,979			1,140,608
Deferred tax liabilities, net		5,017			6,394
Deferred revenue, noncurrent		1,979			904
Other long-term liabilities		795			3,608
Total liabilities		1,532,851			1,809,821
Commitments and contingencies
Redeemable non-controlling interest		32,068			30,063
Stockholders' equity:
Common stock		622			615
Additional paid-in capital		451,737			474,863
Accumulated other comprehensive income (loss)		(561	)		205
Accumulated deficit		(126,035	)		(214,802	)
Total stockholders' equity		325,763			260,881
Total liabilities, redeemable non-controlling interest, and stockholders' equity	$	1,890,682		$	2,100,765


BlackLine, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
	Quarter Ended						Six Months Ended
	June 30,						June 30,
		2024			2023			2024			2023
Revenues
Subscription and support	$	151,787		$	135,881		$	301,288		$	266,307
Professional services		8,719			8,693			16,679			17,251
Total revenues		160,506			144,574			317,967			283,558
Cost of revenues
Subscription and support		33,756			30,630			65,808			59,142
Professional services		6,592			6,486			13,637			13,245
Total cost of revenues		40,348			37,116			79,445			72,387
Gross profit		120,158			107,458			238,522			211,171
Operating expenses
Sales and marketing		60,248			62,749			121,359			124,680
Research and development		25,721			26,802			50,736			53,907
General and administrative		31,053			(148	)		61,099			28,828
Restructuring costs		928			135			1,372			1,149
Total operating expenses		117,950			89,538			234,566			208,564
Income from operations		2,208			17,920			3,956			2,607
Other income (expense)
Interest income		14,065			12,542			29,425			23,207
Interest expense		(2,089	)		(1,470	)		(3,558	)		(2,925	)
Gain on extinguishment of convertible senior notes		65,112			—			65,112			—
Other income, net		77,088			11,072			90,979			20,282
Income before income taxes		79,296			28,992			94,935			22,889
Provision for income taxes		4,337			926			5,206			1,554
Net income		74,959			28,066			89,729			21,335
Net income attributable to redeemable non-controlling interest		524			320			962			405
Adjustment attributable to redeemable non-controlling interest		(2,255	)		(3,103	)		1,248			2,089
Net income attributable to BlackLine, Inc.	$	76,690		$	30,849		$	87,519		$	18,841
Basic net income per share attributable to BlackLine, Inc.	$	1.24		$	0.51		$	1.42		$	0.31
Shares used to calculate basic net income per share		61,979			60,700			61,811			60,445
Diluted net income per share attributable to BlackLine, Inc.	$	0.22		$	0.45		$	0.39		$	0.30
Shares used to calculate diluted net income per share		72,522			71,801			72,708			71,801


BlackLine, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
	Quarter Ended						Six Months Ended
	June 30,						June 30,
		2024			2023			2024			2023
Cash flows from operating activities
Net income attributable to BlackLine, Inc.	$	76,690		$	30,849		$	87,519		$	18,841
Net income and adjustment attributable to redeemable non-controlling interest		(1,731	)		(2,783	)		2,210			2,494
Net income		74,959			28,066			89,729			21,335
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		12,652			12,346			25,300			24,350
Change in fair value of contingent consideration		—			(25,535	)		—			(22,429	)
Amortization of debt issuance costs		1,294			1,379			2,679			2,741
Stock-based compensation		22,726			19,948			41,288			40,386
Gain on extinguishment of convertible senior notes		(65,112	)		—			(65,112	)		—
Noncash lease expense		1,552			1,694			3,110			3,192
Accretion of purchase discounts on marketable securities, net		(6,719	)		(8,249	)		(15,261	)		(15,768	)
Net foreign currency (gains) losses		(195	)		429			(157	)		902
Deferred income taxes		(214	)		135			(1,255	)		(52	)
Provision for (benefit from) credit losses		7			(24	)		7			(19	)
Changes in operating assets and liabilities:
Accounts receivable		(11,701	)		(9,465	)		33,995			20,701
Prepaid expenses and other current assets		5,488			1,312			3,524			(3,956	)
Other assets		(797	)		(72	)		1,609			395
Accounts payable		249			3,436			(6,543	)		(6,082	)
Accrued expenses and other current liabilities		3,878			(2,574	)		(10,896	)		(13,227	)
Deferred revenue		4,028			2,845			(7,802	)		1,025
Operating lease liabilities		(1,531	)		(1,858	)		(3,241	)		(3,512	)
Lease incentive receipts		—			240			—			240
Other long-term liabilities		134			498			149			(2,804	)
Net cash provided by operating activities		40,698			24,551			91,123			47,418
Cash flows from investing activities
Purchases of marketable securities		(101,143	)		(413,874	)		(396,104	)		(725,120	)
Proceeds from maturities of marketable securities		268,800			364,500			591,500			693,300
Proceeds from sales of marketable securities		324,098			—			324,098			—
Capitalized software development costs		(5,637	)		(5,439	)		(12,087	)		(12,318	)
Purchases of property and equipment		(677	)		(1,153	)		(976	)		(2,829	)
Net cash provided by (used in) investing activities		485,441			(55,966	)		506,431			(46,967	)
Cash flows from financing activities
Proceeds from issuance of convertible senior notes, net of issuance costs		662,641			—			662,641			—
Partial repurchase of convertible senior notes		(848,519	)		—			(848,519	)		—
Purchase of capped calls related to convertible senior notes		(59,738	)		—			(59,738	)		—
Principal payments under finance lease obligations		(258	)		(244	)		(516	)		(485	)
Proceeds from exercises of stock options		2,324			9,509			2,638			11,920
Proceeds from employee stock purchase plan		4,249			5,291			4,249			5,291
Acquisition of common stock for tax withholding obligations		(1,403	)		(1,019	)		(12,384	)		(13,422	)
Net cash provided by (used in) financing activities		(240,704	)		13,537			(251,629	)		3,304
Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash		(209	)		(166	)		(421	)		(207	)
Net increase (decrease) in cash, cash equivalents, and restricted cash		285,226			(18,044	)		345,504			3,548
Cash, cash equivalents, and restricted cash, beginning of period		331,641			222,799			271,363			201,207
Cash, cash equivalents, and restricted cash, end of period	$	616,867		$	204,755		$	616,867		$	204,755


Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets
Cash and cash equivalents at end of period	$	616,629		$	204,514		$	616,629		$	204,514
Restricted cash included within other assets at end of period		238			241			238			241
Total cash, cash equivalents, and restricted cash at end of period shown in the consolidated statements of cash flows	$	616,867		$	204,755		$	616,867		$	204,755


BlackLine, Inc.
Reconciliations of Non-GAAP Financial Measures
(in thousands, except percentages and per share data)
(unaudited)
	Quarter Ended						Six Months Ended
	June 30,						June 30,
		2024			2023			2024			2023
Non-GAAP Gross Profit:
Gross profit	$	120,158		$	107,458		$	238,522		$	211,171
Amortization of acquired developed technology		3,383			2,980			6,767			5,929
Stock-based compensation		3,653			3,273			6,249			6,070
Transaction-related costs		38			174			90			387
Total non-GAAP gross profit	$	127,232		$	113,885		$	251,628		$	223,557
Gross margin		74.9	%		74.3	%		75.0	%		74.5	%
Non-GAAP gross margin		79.3	%		78.8	%		79.1	%		78.8	%

Non-GAAP Operating Income:
Operating income	$	2,208		$	17,920		$	3,956		$	2,607
Amortization of intangible assets		5,195			5,134			10,391			10,219
Stock-based compensation		23,406			20,451			42,602			41,334
Change in fair value of contingent consideration		—			(25,535	)		—			(22,429	)
Transaction-related costs		(6	)		1,219			210			2,009
Restructuring costs		928			135			1,372			1,149
Total non-GAAP operating income	$	31,731		$	19,324		$	58,531		$	34,889
GAAP operating margin		1.4	%		12.4	%		1.2	%		0.9	%
Non-GAAP operating margin		19.8	%		13.4	%		18.4	%		12.3	%

Non-GAAP Net Income Attributable to BlackLine, Inc.:
Net income attributable to BlackLine, Inc.	$	76,690		$	30,849		$	87,519		$	18,841
Provision for income taxes		2,902			286			2,319			105
Amortization of intangible assets		5,195			5,134			10,391			10,219
Stock-based compensation		23,292			20,364			42,377			41,104
Amortization of debt issuance costs		1,294			1,379			2,679			2,741
Change in fair value of contingent consideration		—			(25,535	)		—			(22,429	)
Transaction-related costs		(6	)		1,219			210			2,009
Restructuring costs		928			135			1,372			1,149
Adjustment to redeemable non-controlling interest		(2,255	)		(3,103	)		1,248			2,089
Gain on extinguishment of convertible senior notes		(65,112	)		—			(65,112	)		—
Total non-GAAP net income attributable to BlackLine, Inc.	$	42,928		$	30,728		$	83,003		$	55,828

Basic non-GAAP net income attributable to BlackLine, Inc. per share:
Basic non-GAAP net income attributable to BlackLine, Inc. per share	$	0.69		$	0.51		$	1.34		$	0.92
Shares used to calculate basic non-GAAP net income per share		61,979			60,700			61,811			60,445

Diluted non-GAAP net income attributable to BlackLine, Inc.
Diluted non-GAAP net income attributable to BlackLine, Inc. per share	$	0.58		$	0.41		$	1.11		$	0.75
Shares used to calculate diluted non-GAAP net income per share		75,411			74,502			75,145			74,178

	Quarter Ended						Six Months Ended
	June 30,						June 30,
		2024			2023			2024			2023
Non-GAAP Sales and Marketing Expense:
Sales and marketing expense	$	60,248		$	62,749		$	121,359		$	124,680
Amortization of intangible assets		(1,734	)		(1,676	)		(3,467	)		(3,335	)
Stock-based compensation		(6,629	)		(6,182	)		(12,423	)		(12,665	)
Transaction-related costs		(54	)		(206	)		(21	)		(191	)
Total non-GAAP sales and marketing expense	$	51,831		$	54,685		$	105,448		$	108,489

Non-GAAP Research and Development Expense:
Research and development expense	$	25,721		$	26,802		$	50,736		$	53,907
Stock-based compensation		(3,499	)		(3,708	)		(6,350	)		(7,532	)
Transaction-related costs		106			(772	)		(65	)		(1,278	)
Total non-GAAP research and development expense	$	22,328		$	22,322		$	44,321		$	45,097

Non-GAAP General and Administrative Expense:
General and administrative expense	$	31,053		$	(148	)	$	61,099		$	28,828
Amortization of intangible assets		(78	)		(478	)		(157	)		(955	)
Stock-based compensation		(9,625	)		(7,288	)		(17,580	)		(15,067	)
Change in fair value of contingent consideration		—			25,535			—			22,429
Transaction-related costs		(8	)		(67	)		(34	)		(153	)
Total non-GAAP general and administrative expense	$	21,342		$	17,554		$	43,328		$	35,082

Total Non-GAAP Operating Expenses	$	95,501		$	94,561		$	193,097		$	188,668

Free Cash Flow
Net cash provided by operating activities	$	40,698		$	24,551		$	91,123		$	47,418
Capitalized software development costs		(5,637	)		(5,439	)		(12,087	)		(12,318	)
Purchases of property and equipment		(677	)		(1,153	)		(976	)		(2,829	)
Free cash flow	$	34,384		$	17,959		$	78,060		$	32,271

FAQ

What were BlackLine's Q2 2024 revenue results?

BlackLine reported Q2 2024 GAAP revenues of $160.5 million, an 11% increase from Q2 2023.

What was BlackLine's Q2 2024 net income?

BlackLine's Q2 2024 GAAP net income was $76.7 million, or $0.22 per diluted share.

How did BlackLine's operating margins perform in Q2 2024?

BlackLine's GAAP operating margin was 1.4%, down from 12.4% in Q2 2023, while the non-GAAP operating margin was 19.8%, up from 13.4%.

What is BlackLine's revenue guidance for Q3 2024?

BlackLine expects Q3 2024 GAAP revenues to be in the range of $162 million to $164 million.

What is BlackLine's full-year 2024 revenue outlook?

BlackLine projects full-year 2024 GAAP revenues to be between $647 million and $651 million.

How many new customers did BlackLine add in Q2 2024?

BlackLine added 24 net new customers in Q2 2024, bringing the total to 4,435.

BlackLine Announces Second Quarter Financial Results

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What were BlackLine's Q2 2024 revenue results?

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How did BlackLine's operating margins perform in Q2 2024?

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BlackLine Announces Second Quarter Financial Results

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What were BlackLine's Q2 2024 revenue results?

What was BlackLine's Q2 2024 net income?

How did BlackLine's operating margins perform in Q2 2024?

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How many new customers did BlackLine add in Q2 2024?

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