BlackLine Announces Second Quarter Financial Results


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