BlackLine, Inc. (Nasdaq: BL), today announced financial
results for the second quarter ended June 30, 2023.
“BlackLine delivered total revenue and non-GAAP
net income that exceeded our targets this quarter,” said Owen Ryan,
co-CEO of BlackLine. “While pleased with these results, we expect
to drive higher operational efficiency while investing to extend
our leadership position within the Office of the CFO.”
“With the continued delivery of innovative new
solutions and programs for customers, our relentless focus on
innovation and commitment to customer success remains a key
priority,” said Therese Tucker, Founder and co-CEO of
BlackLine.
Second Quarter 2023
Financial Highlights
- Total GAAP revenues
of $144.6 million, an increase of 13% compared to the second
quarter of 2022.
- GAAP net income
attributable to BlackLine of $30.8 million, or $0.45 per diluted
share compared to GAAP net loss attributable to BlackLine of $10.7
million or $(0.18) per diluted share in the second quarter of
2022.
- Non-GAAP net income
attributable to BlackLine of $30.7 million or $0.41 per diluted
share compared to non-GAAP net income attributable to BlackLine of
$5.0 million or $0.07 per diluted share in the second quarter of
2022.
- Operating cash flow
of $24.6 million, compared to $5.9 million in the second quarter of
2022.
- Free cash flow of
$18.0 million, compared to $(5.1) million in the second quarter of
2022.
Second Quarter Key
Metrics and Recent Business Highlights
- Added 43 net new
customers in the second quarter for a total of 4,279 customers at
June 30, 2023.
- Expanded the
company’s user base to 377,585 users at June 30, 2023.
- Achieved a
dollar-based net revenue retention rate of 106% at June 30,
2023.
- Hosted BlackLine’s
annual APAC customer conference, BeyondTheBlack EMEA, in Sydney and
Melbourne.
- Announced further
expansion into APAC with the opening of a new office, new
leadership and the launch of a local data center.
- Announced
BlackLine’s new ‘5-Day Fast Track’ implementation program for
mid-market customers.
The financial results included in this press
release are preliminary and pending 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.”
Financial Outlook
Third Quarter 2023
- Total GAAP revenue
is expected to be in the range of $149 million to $151
million.
- Non-GAAP net income
attributable to BlackLine is expected to be in the range of $24
million to $26 million, or $0.32 to $0.35 per share on 74.5 million
diluted weighted average shares outstanding.
Full Year 2023
- Total GAAP revenue
is expected to be in the range of $586 million to $591
million.
- Non-GAAP net income
attributable to BlackLine is expected to be in the range of $108
million to $112 million, or $1.45 to $1.51 per share on 74.4
million diluted weighted average shares outstanding.
Guidance for non-GAAP net income attributable to
BlackLine and non-GAAP net income attributable to BlackLine per
share does not include the impact of the provision for (benefit
from) income taxes related to acquisitions, amortization of
acquired intangible assets, stock-based compensation, the
amortization of debt issuance costs, the change in fair value of
contingent consideration, transaction-related costs, and the
adjustment to the value of the redeemable non-controlling interest
to the redemption amount. Reconciliations of 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, or net income (loss) attributable to BlackLine and
net income (loss) attributable to BlackLine per share, are not
available on a forward-looking basis without unreasonable efforts
due to the unpredictability and complexity of the charges excluded
from non-GAAP net income attributable to BlackLine and non-GAAP net
income attributable to BlackLine per share. The company expects the
variability of the above changes could have a significant, and
potentially unpredictable, impact on its future GAAP net income
(loss) attributable to BlackLine and net income (loss) attributable
to BlackLine per share.
Quarterly Conference Call
BlackLine, Inc. will hold a conference call to
discuss its second quarter results at 2:00 p.m. Pacific time on
Tuesday, August 8, 2023. A live audio webcast will be
accessible on BlackLine’s investor relations website at
https://investors.blackline.com. Participants can pre-register 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, Inc. (Nasdaq:
BL) because their traditional manual accounting processes are not
sustainable. BlackLine’s cloud-based financial operations
management platform and market-leading 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, accounts receivable and intercompany
accounting processes, helping large enterprises and midsize
companies across all industries do accounting work better, faster
and with more control.
More than 4,200 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
recognized as the leader by customers at leading end-user review
sites including Gartner Peer Insights, G2 and TrustRadius.
BlackLine is a global company with operations in Los Angeles, New
York, the San Francisco Bay area, London, Paris, Frankfurt, Tokyo,
Singapore and Sydney.
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 2023, our
expectations for our business, including the demand environment,
BlackLine’s addressable market, market position and pipeline, our
international growth, 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 additional headcount and 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 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; 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 its enterprise and
mid-market sales teams and effectively manage its sales forces 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, 2022 filed with the Securities and
Exchange Commission on February 23, 2023, and our subsequent
Quarterly Reports on Form 10-Q. Additional information will also be
set forth in our Quarterly Report on Form 10-Q for the quarter
ended June 30, 2023. 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 8, 2023 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 income (loss) from operations, (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 the amortization of acquired
developed technology, transaction-related costs (including, but not
limited to, accounting, legal, and advisory fees related to the
transaction, as well as transaction-related retention bonuses), and
stock-based compensation. Non-GAAP gross margin is defined as
non-GAAP gross profit divided by GAAP revenues. BlackLine believes
that presenting non-GAAP gross margin is useful to investors as it
eliminates the impact of certain non-cash expenses and allows a
direct comparison of gross margin 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 the
amortization of intangible assets, stock-based compensation,
transaction-related costs and impairment of cloud computing
implementation 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 as adjusted for the amortization of
intangible assets, stock-based compensation, the change in fair
value of contingent consideration, transaction-related costs, legal
settlement gains or costs and impairment of cloud computing
implementation 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. Non-GAAP
income (loss) from operations is defined as GAAP income (loss) from
operations adjusted for the amortization of intangible assets,
stock-based compensation, the change in fair value of contingent
consideration, transaction-related costs, legal settlement gains or
costs, impairment of cloud computing implementation costs and
restructuring costs. The company believes that presenting non-GAAP
income (loss) from operations 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 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, the amortization of
debt issuance costs from our convertible notes, the change in the
fair value of contingent consideration, transaction-related costs,
legal settlement gains or costs, impairment of cloud computing
implementation costs, restructuring costs, the adjustment to the
value of the redeemable non-controlling interest to the redemption
amount, and loss on extinguishment of convertible senior notes.
Diluted non-GAAP net income 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
in order to allow a direct comparison of net 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 8, 2023 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, 2023.
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:Kimberly
Ubertikimberly.uberti@blackline.com
Investor Relations Contact:Matt Humphries,
CFAmatt.humphries@blackline.com
|
BlackLine, Inc. |
Condensed Consolidated Balance Sheets |
(in thousands) |
(unaudited) |
|
June 30, 2023 |
|
December 31, 2022 |
ASSETS |
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
204,514 |
|
|
$ |
200,968 |
|
Marketable securities |
|
921,737 |
|
|
|
874,083 |
|
Accounts receivable, net of allowances |
|
129,798 |
|
|
|
150,858 |
|
Prepaid expenses and other current assets |
|
27,697 |
|
|
|
23,658 |
|
Total current assets |
|
1,283,746 |
|
|
|
1,249,567 |
|
Capitalized software development costs, net |
|
36,349 |
|
|
|
32,070 |
|
Property and equipment, net |
|
17,009 |
|
|
|
19,811 |
|
Intangible assets, net |
|
80,645 |
|
|
|
90,864 |
|
Goodwill |
|
443,861 |
|
|
|
443,861 |
|
Operating lease right-of-use assets |
|
21,272 |
|
|
|
14,708 |
|
Other assets |
|
92,484 |
|
|
|
92,775 |
|
Total assets |
$ |
1,975,366 |
|
|
$ |
1,943,656 |
|
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, AND
STOCKHOLDERS’ EQUITY |
Current liabilities: |
|
|
|
Accounts payable |
$ |
7,899 |
|
|
$ |
14,964 |
|
Accrued expenses and other current liabilities |
|
45,152 |
|
|
|
58,600 |
|
Deferred revenue, current |
|
280,050 |
|
|
|
279,325 |
|
Finance lease liabilities, current |
|
1,031 |
|
|
|
989 |
|
Operating lease liabilities, current |
|
4,394 |
|
|
|
5,943 |
|
Contingent consideration, current |
|
16,510 |
|
|
|
8,000 |
|
Total current liabilities |
|
355,036 |
|
|
|
367,821 |
|
Finance lease liabilities, noncurrent |
|
266 |
|
|
|
785 |
|
Operating lease liabilities, noncurrent |
|
17,855 |
|
|
|
9,292 |
|
Convertible senior notes, net |
|
1,387,047 |
|
|
|
1,384,306 |
|
Contingent consideration, noncurrent |
|
2,610 |
|
|
|
33,549 |
|
Deferred tax liabilities, net |
|
5,618 |
|
|
|
5,568 |
|
Deferred revenue, noncurrent |
|
643 |
|
|
|
343 |
|
Other long-term liabilities |
|
3,641 |
|
|
|
6,229 |
|
Total liabilities |
|
1,772,716 |
|
|
|
1,807,893 |
|
Commitments and
contingencies |
|
|
|
Redeemable non-controlling
interest |
|
26,288 |
|
|
|
23,895 |
|
Stockholders’ equity: |
|
|
|
Common stock |
|
610 |
|
|
|
600 |
|
Additional paid-in capital |
|
429,320 |
|
|
|
385,709 |
|
Accumulated other comprehensive loss |
|
(1,529 |
) |
|
|
(1,472 |
) |
Accumulated deficit |
|
(252,039 |
) |
|
|
(272,969 |
) |
Total stockholders’ equity |
|
176,362 |
|
|
|
111,868 |
|
Total liabilities, redeemable non-controlling interest, and
stockholders’ equity |
$ |
1,975,366 |
|
|
$ |
1,943,656 |
|
|
|
|
|
|
|
|
|
BlackLine, Inc. |
Condensed Consolidated Statements of
Operations |
(in thousands, except per share data) |
(unaudited) |
|
Quarter Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenues |
|
|
|
|
|
|
|
Subscription and support |
$ |
135,881 |
|
|
$ |
120,683 |
|
|
$ |
266,307 |
|
|
$ |
234,208 |
|
Professional services |
|
8,693 |
|
|
|
7,794 |
|
|
|
17,251 |
|
|
|
14,505 |
|
Total revenues |
|
144,574 |
|
|
|
128,477 |
|
|
|
283,558 |
|
|
|
248,713 |
|
Cost of revenues |
|
|
|
|
|
|
|
Subscription and support |
|
30,630 |
|
|
|
25,795 |
|
|
|
59,142 |
|
|
|
49,951 |
|
Professional services |
|
6,486 |
|
|
|
7,128 |
|
|
|
13,245 |
|
|
|
13,645 |
|
Total cost of revenues |
|
37,116 |
|
|
|
32,923 |
|
|
|
72,387 |
|
|
|
63,596 |
|
Gross profit |
|
107,458 |
|
|
|
95,554 |
|
|
|
211,171 |
|
|
|
185,117 |
|
Operating expenses |
|
|
|
|
|
|
|
Sales and marketing |
|
62,749 |
|
|
|
66,000 |
|
|
|
124,680 |
|
|
|
126,027 |
|
Research and development |
|
26,802 |
|
|
|
27,902 |
|
|
|
53,907 |
|
|
|
53,150 |
|
General and administrative |
|
(148 |
) |
|
|
14,345 |
|
|
|
28,828 |
|
|
|
43,997 |
|
Restructuring costs |
|
135 |
|
|
|
— |
|
|
|
1,149 |
|
|
|
— |
|
Total operating expenses |
|
89,538 |
|
|
|
108,247 |
|
|
|
208,564 |
|
|
|
223,174 |
|
Income (loss) from
operations |
|
17,920 |
|
|
|
(12,693 |
) |
|
|
2,607 |
|
|
|
(38,057 |
) |
Other income (expense) |
|
|
|
|
|
|
|
Interest income |
|
12,542 |
|
|
|
1,715 |
|
|
|
23,207 |
|
|
|
2,233 |
|
Interest expense |
|
(1,470 |
) |
|
|
(1,457 |
) |
|
|
(2,925 |
) |
|
|
(2,904 |
) |
Other income (expense),
net |
|
11,072 |
|
|
|
258 |
|
|
|
20,282 |
|
|
|
(671 |
) |
Income (loss) before income
taxes |
|
28,992 |
|
|
|
(12,435 |
) |
|
|
22,889 |
|
|
|
(38,728 |
) |
Provision for (benefit from)
income taxes |
|
926 |
|
|
|
(464 |
) |
|
|
1,554 |
|
|
|
(13,326 |
) |
Net income (loss) |
|
28,066 |
|
|
|
(11,971 |
) |
|
|
21,335 |
|
|
|
(25,402 |
) |
Net income (loss) attributable
to redeemable non-controlling interest |
|
320 |
|
|
|
(121 |
) |
|
|
405 |
|
|
|
(124 |
) |
Adjustment attributable to
redeemable non-controlling interest |
|
(3,103 |
) |
|
|
(1,185 |
) |
|
|
2,089 |
|
|
|
(4,602 |
) |
Net income (loss) attributable
to BlackLine, Inc. |
$ |
30,849 |
|
|
$ |
(10,665 |
) |
|
$ |
18,841 |
|
|
$ |
(20,676 |
) |
Basic net income (loss) per
share attributable to BlackLine, Inc. |
$ |
0.51 |
|
|
$ |
(0.18 |
) |
|
$ |
0.31 |
|
|
$ |
(0.35 |
) |
Shares used to calculate basic
net income (loss) per share |
|
60,700 |
|
|
|
59,441 |
|
|
|
60,445 |
|
|
|
59,283 |
|
Diluted net income (loss) per
share attributable to BlackLine, Inc. |
$ |
0.45 |
|
|
$ |
(0.18 |
) |
|
$ |
0.30 |
|
|
$ |
(0.35 |
) |
Shares used to calculate
diluted net income (loss) per share |
|
71,801 |
|
|
|
59,441 |
|
|
|
71,801 |
|
|
|
59,283 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BlackLine, Inc. |
Condensed Consolidated Statements of Cash
Flows |
(in thousands) |
(unaudited) |
|
Quarter Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Cash flows from operating
activities |
|
|
|
|
|
|
|
Net income (loss) attributable
to BlackLine, Inc. |
$ |
30,849 |
|
|
$ |
(10,665 |
) |
|
$ |
18,841 |
|
|
$ |
(20,676 |
) |
Net income (loss) and
adjustment attributable to redeemable non-controlling interest |
|
(2,783 |
) |
|
|
(1,306 |
) |
|
|
2,494 |
|
|
|
(4,726 |
) |
Net income (loss) |
|
28,066 |
|
|
|
(11,971 |
) |
|
|
21,335 |
|
|
|
(25,402 |
) |
Adjustments to reconcile net
loss to net cash provided by operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
12,346 |
|
|
|
10,659 |
|
|
|
24,350 |
|
|
|
19,806 |
|
Change in fair value of contingent consideration |
|
(25,535 |
) |
|
|
(14,042 |
) |
|
|
(22,429 |
) |
|
|
(15,858 |
) |
Amortization of debt issuance costs |
|
1,379 |
|
|
|
1,373 |
|
|
|
2,741 |
|
|
|
2,730 |
|
Stock-based compensation |
|
19,948 |
|
|
|
20,609 |
|
|
|
40,386 |
|
|
|
36,511 |
|
Noncash lease expense |
|
1,694 |
|
|
|
1,416 |
|
|
|
3,192 |
|
|
|
2,861 |
|
Accretion of purchase discounts on marketable securities, net |
|
(8,249 |
) |
|
|
(659 |
) |
|
|
(15,768 |
) |
|
|
(564 |
) |
Net foreign currency (gains) losses |
|
429 |
|
|
|
(644 |
) |
|
|
902 |
|
|
|
(826 |
) |
Deferred income taxes |
|
135 |
|
|
|
(273 |
) |
|
|
(52 |
) |
|
|
(14,429 |
) |
Provision for (benefit from) credit losses |
|
(24 |
) |
|
|
53 |
|
|
|
(19 |
) |
|
|
81 |
|
Changes in operating assets
and liabilities, net of impact of acquisition: |
|
|
|
|
|
|
|
Accounts receivable |
|
(9,465 |
) |
|
|
(3,290 |
) |
|
|
20,701 |
|
|
|
6,169 |
|
Prepaid expenses and other current assets |
|
1,312 |
|
|
|
934 |
|
|
|
(3,956 |
) |
|
|
3,510 |
|
Other assets |
|
(72 |
) |
|
|
(3,104 |
) |
|
|
395 |
|
|
|
(5,198 |
) |
Accounts payable |
|
3,436 |
|
|
|
(2,428 |
) |
|
|
(6,082 |
) |
|
|
4,127 |
|
Accrued expenses and other current liabilities |
|
(2,574 |
) |
|
|
2,430 |
|
|
|
(13,227 |
) |
|
|
(11,385 |
) |
Deferred revenue |
|
2,845 |
|
|
|
4,666 |
|
|
|
1,025 |
|
|
|
4,206 |
|
Operating lease liabilities |
|
(1,858 |
) |
|
|
(2,666 |
) |
|
|
(3,512 |
) |
|
|
(4,106 |
) |
Lease incentive receipts |
|
240 |
|
|
|
491 |
|
|
|
240 |
|
|
|
491 |
|
Other long-term liabilities |
|
498 |
|
|
|
2,353 |
|
|
|
(2,804 |
) |
|
|
3,359 |
|
Net cash provided by operating activities |
|
24,551 |
|
|
|
5,907 |
|
|
|
47,418 |
|
|
|
6,083 |
|
Cash flows from investing
activities |
|
|
|
|
|
|
|
Purchases of marketable securities |
|
(413,874 |
) |
|
|
(464,199 |
) |
|
|
(725,120 |
) |
|
|
(799,749 |
) |
Proceeds from maturities of marketable securities |
|
364,500 |
|
|
|
309,000 |
|
|
|
693,300 |
|
|
|
637,250 |
|
Capitalized software development costs |
|
(5,439 |
) |
|
|
(5,109 |
) |
|
|
(12,318 |
) |
|
|
(9,766 |
) |
Purchases of property and equipment |
|
(1,153 |
) |
|
|
(5,775 |
) |
|
|
(2,829 |
) |
|
|
(7,303 |
) |
Acquisition, net of cash acquired |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(157,738 |
) |
Net cash used in investing activities |
|
(55,966 |
) |
|
|
(166,083 |
) |
|
|
(46,967 |
) |
|
|
(337,306 |
) |
Cash flows from financing
activities |
|
|
|
|
|
|
|
Principal payments under finance lease obligations |
|
(244 |
) |
|
|
(89 |
) |
|
|
(485 |
) |
|
|
(195 |
) |
Proceeds from exercises of stock options |
|
9,509 |
|
|
|
1,031 |
|
|
|
11,920 |
|
|
|
2,420 |
|
Proceeds from employee stock purchase plan |
|
5,291 |
|
|
|
4,466 |
|
|
|
5,291 |
|
|
|
4,466 |
|
Acquisition of common stock for tax withholding obligations |
|
(1,019 |
) |
|
|
(1,815 |
) |
|
|
(13,422 |
) |
|
|
(6,002 |
) |
Financed purchases of property and equipment |
|
— |
|
|
|
(84 |
) |
|
|
— |
|
|
|
(84 |
) |
Net cash provided by financing activities |
|
13,537 |
|
|
|
3,509 |
|
|
|
3,304 |
|
|
|
605 |
|
Effect of foreign currency
exchange rate changes on cash, cash equivalents, and restricted
cash |
|
(166 |
) |
|
|
(416 |
) |
|
|
(207 |
) |
|
|
(687 |
) |
Net increase (decrease) in
cash, cash equivalents, and restricted cash |
|
(18,044 |
) |
|
|
(157,083 |
) |
|
|
3,548 |
|
|
|
(331,305 |
) |
Cash, cash equivalents, and
restricted cash, beginning of period |
|
222,799 |
|
|
|
365,769 |
|
|
|
201,207 |
|
|
|
539,991 |
|
Cash, cash equivalents, and
restricted cash, end of period |
$ |
204,755 |
|
|
$ |
208,686 |
|
|
$ |
204,755 |
|
|
$ |
208,686 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of cash, cash
equivalents, and restricted cash to the consolidated balance
sheets |
|
|
|
|
|
Cash and cash equivalents at
end of period |
$ |
204,514 |
|
|
$ |
208,454 |
|
|
$ |
204,514 |
|
|
$ |
208,454 |
|
Restricted cash included
within other assets at end of period |
|
241 |
|
|
|
232 |
|
|
|
241 |
|
|
|
232 |
|
Total cash, cash equivalents,
and restricted cash at end of period shown in the consolidated
statements of cash flows |
$ |
204,755 |
|
|
$ |
208,686 |
|
|
$ |
204,755 |
|
|
$ |
208,686 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Non-GAAP Gross Profit: |
|
|
|
|
|
|
|
|
Gross
profit |
|
$ |
107,458 |
|
|
$ |
95,554 |
|
|
$ |
211,171 |
|
|
$ |
185,117 |
|
Amortization of acquired developed technology |
|
|
2,980 |
|
|
|
2,957 |
|
|
|
5,929 |
|
|
|
5,294 |
|
Stock-based compensation(1) |
|
|
3,273 |
|
|
|
2,249 |
|
|
|
6,070 |
|
|
|
3,963 |
|
Transaction-related costs |
|
|
174 |
|
|
|
374 |
|
|
|
387 |
|
|
|
646 |
|
Total non-GAAP gross profit |
|
$ |
113,885 |
|
|
$ |
101,134 |
|
|
$ |
223,557 |
|
|
$ |
195,020 |
|
Gross
margin |
|
|
74.3 |
% |
|
|
74.4 |
% |
|
|
74.5 |
% |
|
|
74.4 |
% |
Non-GAAP
gross margin |
|
|
78.8 |
% |
|
|
78.7 |
% |
|
|
78.8 |
% |
|
|
78.4 |
% |
|
|
|
|
|
|
|
|
|
Non-GAAP Operating Income: |
|
|
|
|
|
|
|
|
Operating income (loss) |
|
$ |
17,920 |
|
|
$ |
(12,693 |
) |
|
$ |
2,607 |
|
|
$ |
(38,057 |
) |
Amortization of intangible assets |
|
|
5,134 |
|
|
|
5,206 |
|
|
|
10,219 |
|
|
|
9,368 |
|
Stock-based compensation(1) |
|
|
20,451 |
|
|
|
20,609 |
|
|
|
41,334 |
|
|
|
36,511 |
|
Change
in fair value of contingent consideration |
|
|
(25,535 |
) |
|
|
(14,042 |
) |
|
|
(22,429 |
) |
|
|
(15,858 |
) |
Transaction-related costs |
|
|
1,219 |
|
|
|
3,676 |
|
|
|
2,009 |
|
|
|
10,709 |
|
Legal
settlement costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
690 |
|
Restructuring costs |
|
|
135 |
|
|
|
— |
|
|
|
1,149 |
|
|
|
— |
|
Total non-GAAP operating income |
|
$ |
19,324 |
|
|
$ |
2,756 |
|
|
$ |
34,889 |
|
|
$ |
3,363 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP Net Income Attributable to BlackLine,
Inc.: |
|
|
|
|
|
|
|
|
Net
income (loss) attributable to BlackLine, Inc. |
|
$ |
30,849 |
|
|
$ |
(10,665 |
) |
|
$ |
18,841 |
|
|
$ |
(20,676 |
) |
Provision for (benefit from)
income taxes related to acquisitions |
|
|
286 |
|
|
|
145 |
|
|
|
105 |
|
|
|
(12,991 |
) |
Amortization of intangible assets |
|
|
5,134 |
|
|
|
5,206 |
|
|
|
10,219 |
|
|
|
9,368 |
|
Stock-based compensation(1) |
|
|
20,364 |
|
|
|
20,517 |
|
|
|
41,104 |
|
|
|
36,357 |
|
Amortization of debt issuance costs |
|
|
1,379 |
|
|
|
1,373 |
|
|
|
2,741 |
|
|
|
2,730 |
|
Change
in fair value of contingent consideration |
|
|
(25,535 |
) |
|
|
(14,042 |
) |
|
|
(22,429 |
) |
|
|
(15,858 |
) |
Transaction-related costs |
|
|
1,219 |
|
|
|
3,676 |
|
|
|
2,009 |
|
|
|
10,709 |
|
Legal
settlement costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
690 |
|
Restructuring costs |
|
|
135 |
|
|
|
— |
|
|
|
1,149 |
|
|
|
— |
|
Adjustment to redeemable non-controlling interest |
|
|
(3,103 |
) |
|
|
(1,185 |
) |
|
|
2,089 |
|
|
|
(4,602 |
) |
Total non-GAAP net income attributable to BlackLine,
Inc. |
|
$ |
30,728 |
|
|
$ |
5,025 |
|
|
$ |
55,828 |
|
|
$ |
5,727 |
|
Basic non-GAAP net
income attributable to BlackLine, Inc. per share: |
|
|
|
|
|
|
|
|
Basic non-GAAP net income
attributable to BlackLine, Inc. per share |
|
$ |
0.51 |
|
|
$ |
0.08 |
|
|
$ |
0.92 |
|
|
$ |
0.10 |
|
Shares used to calculate basic
non-GAAP net income per share |
|
|
60,700 |
|
|
|
59,441 |
|
|
|
60,445 |
|
|
|
59,283 |
|
|
|
|
|
|
|
|
|
|
Diluted non-GAAP net
income attributable to BlackLine, Inc. per share: |
|
|
|
|
|
|
|
|
Diluted non-GAAP net income
attributable to BlackLine, Inc. per share |
|
$ |
0.41 |
|
|
$ |
0.07 |
|
|
$ |
0.75 |
|
|
$ |
0.08 |
|
Shares used to calculate
diluted non-GAAP net income per share |
|
|
74,502 |
|
|
|
73,093 |
|
|
|
74,178 |
|
|
|
72,648 |
|
|
|
|
|
|
|
|
|
|
(1) Beginning in 2023, includes amortization related to
stock-based compensation that was capitalized in capitalized
software development costs in previous periods and totaled $0.5
million and $0.9 million for the quarter ended and six months ended
June 30, 2023, respectively. |
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
Six Months Ended |
|
|
June 30, |
|
June 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Non-GAAP Sales and Marketing Expense: |
|
|
|
|
|
|
|
|
Sales and marketing
expense |
|
$ |
62,749 |
|
|
$ |
66,000 |
|
|
$ |
124,680 |
|
|
$ |
126,027 |
|
Amortization of intangible
assets |
|
|
(1,676 |
) |
|
|
(1,771 |
) |
|
|
(3,335 |
) |
|
|
(3,118 |
) |
Stock-based compensation |
|
|
(6,182 |
) |
|
|
(7,438 |
) |
|
|
(12,665 |
) |
|
|
(13,362 |
) |
Transaction-related costs |
|
|
(206 |
) |
|
|
(825 |
) |
|
|
(191 |
) |
|
|
(1,445 |
) |
Total non-GAAP sales
and marketing expense |
|
$ |
54,685 |
|
|
$ |
55,966 |
|
|
$ |
108,489 |
|
|
$ |
108,102 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP Research and Development Expense: |
|
|
|
|
|
|
|
|
Research and development
expense |
|
$ |
26,802 |
|
|
$ |
27,902 |
|
|
$ |
53,907 |
|
|
$ |
53,150 |
|
Stock-based compensation |
|
|
(3,708 |
) |
|
|
(3,810 |
) |
|
|
(7,532 |
) |
|
|
(6,707 |
) |
Transaction-related costs |
|
|
(772 |
) |
|
|
(2,119 |
) |
|
|
(1,278 |
) |
|
|
(3,661 |
) |
Total non-GAAP
research and development expense |
|
$ |
22,322 |
|
|
$ |
21,973 |
|
|
$ |
45,097 |
|
|
$ |
42,782 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP General and Administrative Expense: |
|
|
|
|
|
|
|
|
General and administrative
expense |
|
$ |
(148 |
) |
|
$ |
14,345 |
|
|
$ |
28,828 |
|
|
$ |
43,997 |
|
Amortization of intangible
assets |
|
|
(478 |
) |
|
|
(478 |
) |
|
|
(955 |
) |
|
|
(956 |
) |
Stock-based compensation |
|
|
(7,288 |
) |
|
|
(7,112 |
) |
|
|
(15,067 |
) |
|
|
(12,479 |
) |
Change in fair value of
contingent consideration |
|
|
25,535 |
|
|
|
14,042 |
|
|
|
22,429 |
|
|
|
15,858 |
|
Transaction-related costs |
|
|
(67 |
) |
|
|
(358 |
) |
|
|
(153 |
) |
|
|
(4,957 |
) |
Legal settlement costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(690 |
) |
Total non-GAAP general
and administrative expense |
|
$ |
17,554 |
|
|
$ |
20,439 |
|
|
$ |
35,082 |
|
|
$ |
40,773 |
|
|
|
|
|
|
|
|
|
|
Total Non-GAAP Operating Expenses |
|
$ |
94,561 |
|
|
$ |
98,378 |
|
|
$ |
188,668 |
|
|
$ |
191,657 |
|
|
|
|
|
|
|
|
|
|
Free Cash Flow |
|
|
|
|
|
|
|
|
Net cash
provided by operating activities |
|
$ |
24,551 |
|
|
$ |
5,907 |
|
|
$ |
47,418 |
|
|
$ |
6,083 |
|
Capitalized software development costs |
|
|
(5,439 |
) |
|
|
(5,109 |
) |
|
|
(12,318 |
) |
|
|
(9,766 |
) |
Purchases of property and equipment |
|
|
(1,153 |
) |
|
|
(5,775 |
) |
|
|
(2,829 |
) |
|
|
(7,303 |
) |
Financed
purchases of property and equipment |
|
|
— |
|
|
|
(84 |
) |
|
|
— |
|
|
|
(84 |
) |
Free cash flow |
|
$ |
17,959 |
|
|
$ |
(5,061 |
) |
|
$ |
32,271 |
|
|
$ |
(11,070 |
) |
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