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New words:
afforded, AI, annum, bankruptcy, calendar, case, contemplating, Council, customary, evidence, exact, exemption, expressly, grew, inclusive, Indian, junior, Mexican, nominal, offshore, par, Parliament, Peso, placement, preceding, rank, registration, reorganization, repaid, restrained, Rupee, subordinated, trustee, wider
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appointed, Chief, defense, Director, essentially, flat, Mark, Owen, Ryan, Therese, tightening, Tucker, unique
Financial report summary
?Risks
- If we are unable to attract new customers and expand sales to existing customers, our growth could be slower than we expect and our business may be harmed.
- Our business and growth depend substantially on customers renewing their subscription agreements with us and any decline in our customer renewals could adversely affect our operating results.
- We continue to experience growth in our operations, and organizational change, and if we fail to manage our growth effectively, we may be unable to execute our business plan.
- If we are not able to provide successful enhancements, new features or modifications to our software solutions, our business could be adversely affected.
- We derive substantially all of our revenues from a limited number of software solutions, and our growth is dependent on their success.
- If our security controls are breached or unauthorized, or inadvertent access to customer, employee or other confidential data is otherwise obtained, our software solutions may be perceived as insecure, we may lose existing customers or fail to attract new customers, our business may be harmed and we may incur significant liabilities.
- Our increased focus on the development and use of generative artificial intelligence and machine learning technologies in our platform and our business, as well as our potential failure to effectively implement, use, and market these technologies, may result in reputational harm or liability, or could otherwise adversely affect our business.
- Interruptions or performance problems associated with our software solutions, platform and technology may adversely affect our business and operating results.
- If our software contains serious errors or defects, we may lose revenue and market acceptance and may incur costs to defend or settle product liability claims.
- We depend on our executive officers and other key employees and the loss of one or more of these employees or an inability to attract and retain highly-skilled employees could adversely affect our business.
- If our industry does not continue to develop as we anticipate or if potential customers do not continue to adopt our platform, our sales will not grow as quickly as expected, or at all, and our business and operating results and financial condition would be adversely affected.
- The market in which we participate is intensely competitive, and if we do not compete effectively, our operating results could be harmed.
- Failure to effectively organize and motivate our sales resources could harm our ability to increase our customer base.
- If we are not able to maintain and enhance our brand, our business, operating results and financial condition may be adversely affected.
- We may be unable to integrate acquired businesses and technologies successfully, or achieve the expected benefits of these transactions and other strategic transactions.
- Incorrect or improper implementation or use of our solutions could result in customer dissatisfaction and negatively affect our business, results of operations, financial condition, and growth prospects.
- Any failure to offer high-quality product support may adversely affect our relationships with our customers and our financial results.
- We provide service level commitments under our customer contracts, and if we fail to meet these contractual commitments, our revenues could be adversely affected.
- We have a history of losses and we may not be able to generate sufficient revenue to achieve or sustain profitability.
- Our quarterly results may fluctuate, and if we fail to meet the expectations of analysts or investors, our stock price and the value of your investment could decline substantially.
- Our financial results may fluctuate due to our long and increasingly variable sales cycle.
- We recognize subscription revenue over the term of our customer contracts and, consequently, downturns or upturns in new sales may not be immediately reflected in our operating results and may be difficult to discern.
- We face exposure to foreign currency exchange rate fluctuations that could harm our results of operations.
- If our goodwill or intangible assets become impaired, we may be required to record a significant charge to earnings.
- Our ability to use our net operating losses to offset future taxable income may be subject to limitations.
- If our relationships with technology vendors and business process outsourcers are not successful, our business and growth will be harmed.
- We rely on third-party computer hardware and software that may cause errors or failure of our software solutions, or may be difficult to replace.
- We rely on Google Cloud Platform (“GCP”), Microsoft Azure (“Azure”), Amazon Web Services (“AWS”) and third-party data centers (collectively, “public cloud providers”) to deliver our cloud-based software solutions, and any disruption of our use of public cloud providers could negatively impact our operations and harm our business.
- We depend and rely upon SaaS applications from third parties to operate our business and provide our software solutions, and interruptions, outages, or performance problems with these technologies may adversely affect our business and operating results.
- If we are unable to develop and maintain successful relationships with resellers, our business, operating results and financial condition could be adversely affected.
- Our long-term success depends, in part, on our ability to expand the sales of our solutions to customers located outside of the U.S., and thus our business is susceptible to risks associated with international sales and operations.
- Privacy and cybersecurity concerns and evolving domestic or foreign laws and regulations, including increased restrictions of cross-border data transfers, may limit or reduce the adoption of our services, result in significant costs and compliance challenges, and adversely affect our business.
- We are subject to governmental export and import controls that could impair our ability to compete in international markets due to licensing requirements and subject us to liability if we are not in full compliance with applicable laws.
- Changes in laws and regulations related to the internet and cloud computing or changes to internet infrastructure may diminish the demand for our solutions, and could have a negative impact on our business.
- Our international operations subject us to potentially adverse tax consequences.
- The enactment of legislation implementing changes in the U.S. and global taxation of international business activities or the adoption of other tax reform policies could materially impact our financial position and results of operations.
- Taxing authorities may successfully assert that we should have collected, or in the future should collect, sales and use, value-added or similar taxes, and we could be subject to liability with respect to past or future sales, which could adversely affect our results of operations.
- Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology and our brand.
- Lawsuits or other claims by third parties for alleged infringement of their proprietary rights could cause us to incur significant expenses or liabilities.
- We use open source software in our products, which could subject us to litigation or other actions.
- The market price of our common stock may be volatile, and you could lose all or part of your investment.
- Provisions of our corporate governance documents could make an acquisition of BlackLine more difficult and may impede attempts by our stockholders to replace or remove our current management, even if beneficial to our stockholders.
- We do not intend to pay dividends on our common stock so any returns will be limited to changes in the value of our common stock.
- Our amended and restated bylaws designate a state or federal court located within the State of Delaware as the exclusive forum for substantially all disputes between us and our stockholders, and also provide that the federal district courts will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, each of which could limit our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers, or employees.
- Servicing our Notes may require a significant amount of cash and we may not have sufficient cash to settle conversions of the Notes in cash, to repurchase the Notes upon a fundamental change, or to repay the principal amount of the Notes in cash at their maturity, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the Notes.
- Our current and future indebtedness may limit our operating flexibility or otherwise affect our business.
- The conditional conversion feature of each series of the Notes, if triggered, may adversely affect our financial condition and operating results.
- We are subject to counterparty risk with respect to the Capped Calls.
- We may require additional capital to support business growth, and this capital may not be available on acceptable terms, if at all.
- The requirements of being a public company may strain our resources, divert management’s attention, and affect our ability to attract and retain executive management and qualified board members.
- If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.
- We may fail to maintain an effective system of internal control over financial reporting in the future and may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect investor confidence in us and the price of our common stock.
- Natural disasters, climate change, and other events beyond our control could harm our business.
Management Discussion
- Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
- You should read the following discussion and analysis of our financial condition and results of operations together with the financial statements and related notes that are included elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 23, 2024 (“Annual Report on Form 10-K”). This discussion contains forward-looking statements based upon current plans, expectations and beliefs that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to, those discussed in the section entitled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q.
- We have created comprehensive cloud-based solutions designed to transform and modernize accounting and finance operations for midsize and enterprise organizations in all industries globally. Our secure, scalable solutions transform critical processes, including financial close, intercompany, invoice-to-cash, and consolidation. By introducing software that unifies critical data and enables process orchestration and automation, we empower accounting and finance professionals to improve the integrity of their financial reporting, reduce time spent on manual work, accelerate cash flows, and redeploy resources to focus on analysis and business partnership.