Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 30, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | BL | |
Entity Registrant Name | BlackLine, Inc. | |
Entity Central Index Key | 1,666,134 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 51,268,844 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 19,586 | $ 15,205 |
Accounts receivable, net | 36,761 | 24,235 |
Deferred sales commissions | 7,229 | 6,246 |
Prepaid expenses and other current assets | 4,456 | 2,801 |
Total current assets | 68,032 | 48,487 |
Capitalized software development costs, net | 4,113 | 2,967 |
Property and equipment, net | 11,857 | 12,419 |
Intangible assets, net | 57,434 | 56,828 |
Goodwill | 185,052 | 163,154 |
Other assets | 4,747 | 2,895 |
Total assets | 331,235 | 286,750 |
Current liabilities: | ||
Accounts payable | 8,456 | 4,648 |
Accrued expenses and other current liabilities | 17,485 | 15,012 |
Deferred revenue | 69,774 | 52,750 |
Short-term portion of contingent consideration | 2,008 | 2,008 |
Total current liabilities | 97,723 | 74,418 |
Term loan, net | 64,836 | 28,267 |
Common stock warrant liability | 5,200 | 5,500 |
Contingent consideration | 3,137 | 2,859 |
Deferred tax liabilities | 3,874 | 5,907 |
Other long-term liabilities | 3,917 | 3,631 |
Total liabilities | 178,687 | 120,582 |
Commitments and contingencies (Note 7) | ||
Stockholders' equity: | ||
Common stock, $0.01 par value, 500,000,000 shares authorized, 41,316,829 issued and outstanding as of September 30, 2016 and 40,720,327 issued and 40,673,327 outstanding as of December 31, 2015 | 413 | 407 |
Treasury stock, 0 shares and 47,000 shares at cost at September 30, 2016 and December 31, 2015, respectively | (254) | |
Additional paid-in capital | 223,805 | 214,171 |
Accumulated deficit | (71,670) | (48,156) |
Total stockholders' equity | 152,548 | 166,168 |
Total liabilities and stockholders' equity | $ 331,235 | $ 286,750 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (PARENTHETICAL) - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 41,316,829 | 40,720,327 |
Common stock, shares outstanding | 41,316,829 | 40,673,327 |
Treasury stock shares | 0 | 47,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues | ||||
Subscription and support | $ 30,853 | $ 20,786 | $ 83,830 | $ 56,666 |
Professional services | 1,343 | 875 | 3,953 | 2,467 |
Total revenues | 32,196 | 21,661 | 87,783 | 59,133 |
Cost of revenues | ||||
Subscription and support | 6,440 | 5,119 | 18,515 | 14,220 |
Professional services | 1,101 | 824 | 3,029 | 2,162 |
Total cost of revenues | 7,541 | 5,943 | 21,544 | 16,382 |
Gross profit | 24,655 | 15,718 | 66,239 | 42,751 |
Operating expenses | ||||
Sales and marketing | 19,037 | 14,740 | 56,279 | 39,694 |
Research and development | 5,087 | 4,904 | 15,552 | 12,938 |
General and administrative | 7,698 | 5,916 | 19,633 | 14,968 |
Total operating expenses | 31,822 | 25,560 | 91,464 | 67,600 |
Loss from operations | (7,167) | (9,842) | (25,225) | (24,849) |
Other expense | ||||
Interest expense, net | (1,294) | (822) | (3,134) | (2,466) |
Change in fair value of the common stock warrant liability | 80 | 300 | (170) | |
Other expense, net | (1,294) | (742) | (2,834) | (2,636) |
Loss before income taxes | (8,461) | (10,584) | (28,059) | (27,485) |
Benefit from income taxes | (1,842) | (3,849) | (4,564) | (9,958) |
Net loss | $ (6,619) | $ (6,735) | $ (23,495) | $ (17,527) |
Net loss per share, basic and diluted | $ (0.16) | $ (0.17) | $ (0.58) | $ (0.43) |
Weighted average common shares outstanding, basic and diluted | 40,824,314 | 40,655,741 | 40,746,481 | 40,550,742 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED) - 9 months ended Sep. 30, 2016 - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock, at cost | Additional Paid-in Capital | Accumulated Deficit |
Beginning Balance at Dec. 31, 2015 | $ 166,168 | $ 407 | $ (254) | $ 214,171 | $ (48,156) |
Beginning Balance, shares at Dec. 31, 2015 | 40,673,327 | ||||
Stock option exercises | $ 2,196 | $ 4 | 2,192 | ||
Stock option exercises. shares | 451,315 | 451,315 | |||
Common Stock Issuance | $ 3,075 | $ 2 | 3,073 | ||
Common Stock Issuance, shares | 192,187 | ||||
Retirement of treasury stock | $ 254 | (235) | (19) | ||
Stock-based compensation | 4,604 | 4,604 | |||
Net Loss | (23,495) | (23,495) | |||
Ending Balance at Sep. 30, 2016 | $ 152,548 | $ 413 | $ 223,805 | $ (71,670) | |
Ending Balance, shares at Sep. 30, 2016 | 41,316,829 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities | ||
Net Loss | $ (23,495) | $ (17,527) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 12,690 | 10,630 |
Accretion of debt discount and paid in kind interest | 2,083 | 2,008 |
Change in fair value of common stock warrant liability | (300) | 170 |
Change in fair value of contingent consideration | 278 | 39 |
Stock-based compensation | 4,534 | 3,870 |
Deferred income taxes | (4,820) | (10,018) |
Changes in operating assets and liabilities, net of effects of the acquisition: | ||
Accounts receivable | (9,933) | (6,939) |
Deferred sales commissions | (983) | (2,560) |
Prepaid expenses and other current assets | (936) | 110 |
Other assets | (150) | (220) |
Accounts payable | 3,250 | 1,220 |
Accrued expenses and other current liabilities | 1,886 | 4,558 |
Deferred revenue | 17,535 | 12,467 |
Other long-term liabilities | (590) | 2,042 |
Net cash provided by (used in) operating activities | 1,049 | (150) |
Cash flows from investing activities | ||
Acquisition, net of cash acquired | (31,488) | |
Capitalized software development costs | (2,326) | (1,506) |
Purchase of property and equipment | (1,308) | (7,346) |
Net cash used in investing activities | (35,122) | (8,852) |
Cash flows from financing activities | ||
Proceeds from term loan, net of issuance costs | 34,469 | |
Principal payments on capital lease obligations | (124) | |
Proceeds from issuance of common stock | 3,075 | |
Payments of deferred offering costs | (1,162) | |
Repurchase of common stock | (29) | |
Proceeds from exercise of stock options | 2,196 | 1,339 |
Net cash provided by financing activities | 38,454 | 1,310 |
Net increase (decrease) in cash and cash equivalents | 4,381 | (7,692) |
Cash and cash equivalents, beginning of period | 15,205 | 25,707 |
Cash and cash equivalents, end of period | 19,586 | 18,015 |
Supplemental disclosures of cash flow information | ||
Cash paid for interest | 924 | 404 |
Cash paid for income taxes | 176 | 13 |
Non-cash financing and investing activities | ||
Capitalized software developed costs included in accounts payable and accrued expenses and other current liabilities | 107 | 75 |
Purchases of property and equipment included in accounts payable and accrued expenses and other current liabilities | 149 | 1,557 |
Stock-based compensation capitalized for software development | 70 | 46 |
Deferred offering costs included in accounts payable and accrued expenses and other current liabilities | 2,186 | $ 203 |
Term loan issuance costs included in accounts payable and accrued expenses and other current liabilities | $ 143 |
Company Overview
Company Overview | 9 Months Ended |
Sep. 30, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Company Overview | Note 1 – Company overview BlackLine, Inc. and its subsidiaries (the “Company” or “BlackLine”) provide financial accounting close solutions delivered as Software as a Service (“SaaS”). The Company’s solutions enable its customers to address various aspects of their financial closing process including account reconciliations, variance analysis of account balances, journal entry capabilities and certain types of data matching capabilities. The Company is headquartered in Los Angeles, California and has offices in Chicago, Atlanta, New York, Vancouver, London, Paris, Frankfurt, Johannesburg, Sydney, Melbourne, Kuala Lumpur, the Netherlands and Singapore. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Note 2 – Basis of presentation and summary of significant accounting policies The accompanying condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes for the year ended December 31, 2015 included in the Company’s prospectus related to the Company’s initial public offering, dated October 27, 2016 (the “Prospectus”), pursuant to Rule 424 (b) under the Securities Act of 1933. The accompanying condensed consolidated balance sheet as of September 30, 2016, the condensed consolidated statements of operations for the three and nine months ended September 30, 2016 and 2015, the condensed consolidated statement of cash flows for the nine months ended September 30, 2016 and 2015, and the condensed consolidated statement of stockholders’ equity for the nine months ended September 30, 2016 are unaudited. The unaudited interim condensed consolidated financial statements have been prepared on a basis consistent with that used to prepare the audited annual consolidated financial statements and include, in the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair statement of the condensed consolidated financial statements. The operating results for the nine months ended September 30, 2016 are not necessarily indicative of the results expected for the full year ending December 31, 2016. There have been no significant changes in the accounting policies from those disclosed in the audited consolidated financial statements and the related notes presented in the Prospectus. Reverse stock split On October 12, 2016, the Company effected a 1-for-5 reverse stock split of its outstanding common stock. All share and per share amounts for all periods presented in these unaudited condensed consolidated financial statements and notes thereto, have been adjusted retrospectively, where applicable, to reflect this reverse stock split. Use of estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from those estimates. Business combinations The results of businesses acquired in a business combination are included in the Company’s consolidated financial statements from the date of the acquisition. Purchase accounting results in assets and liabilities of an acquired business generally being recorded at their estimated fair values on the acquisition date. Any excess consideration over the fair value of assets acquired and liabilities assumed is recognized as goodwill. Transaction costs associated with business combinations are expensed as incurred, and are included in general and administrative expense in the consolidated statements of operations. The Company performs valuations of assets acquired and liabilities assumed and allocates the purchase price to its respective assets and liabilities. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenue, costs and cash flows, discount rates and selection of comparable companies. The Company engages the assistance of valuation specialists in concluding on fair value measurements in connection with determining fair values of assets acquired and liabilities assumed in a business combination. Intangible assets Intangible assets primarily consist of acquired developed technology, customer relationships, trade name and non-complete agreements which were acquired as part of the Company’s acquisitions of BlackLine Systems, Inc in September 2013 and Runbook Company B.V. (“Runbook”) in August 2016. The Company determines the appropriate useful life of its intangible assets by performing an analysis of expected cash flows of the acquired assets. Intangible assets are amortized over their estimated useful lives using the straight-line method, which approximates the pattern in which the economic benefits are consumed. The estimated useful lives of the Company’s finite-lived intangible assets are as follows: Useful Lives Trade name 1 - 10 years Developed technology 6 - 8 years Non-compete agreements 2 - 5 years Customer relationships 8 - 10 years Segments Management has determined that the Company has one operating segment. The Company’s chief executive officer, who is the Company’s chief operating decision maker, reviews financial information on a consolidated and aggregate basis, together with certain operating metrics principally to make decisions about how to allocate resources and to measure the Company’s performance. Fair value of financial instruments ASC 820, Fair Value Measurements Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, which are the following: Level 1 : Quoted prices in active markets for identical or similar assets and liabilities. Level 2 : Quoted prices for identical or similar assets and liabilities in markets that are not active or observable inputs other than quoted prices in active markets for identical or similar assets or liabilities. Level 3 : Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. As of September 30, 2016 and December 31, 2015, the carrying value of cash equivalents, accounts receivable, accounts payable and accrued expenses, approximates fair value due to the short-term nature of such instruments. The carry value of long-term debt, excluding related debt discounts, approximates its fair value based on rates available to the Company for debt with similar terms and maturities. The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015 by level within the fair value hierarchy. Financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement (in thousands): September 30, 2016 Level 1 Level 2 Level 3 Total Cash equivalents Money market funds $ 14,470 $ — $ — $ 14,470 Total Assets $ 14,470 $ — $ — $ 14,470 Liabilities Common stock warrant liability $ — $ — $ 5,200 $ 5,200 Contingent consideration — — 5,145 5,145 Total Liabilities $ — $ — $ 10,345 $ 10,345 December 31, 2015 Level 1 Level 2 Level 3 Total Cash equivalents Money market funds $ 15,990 $ — $ — $ 15,990 Total Assets 15,990 $ — $ — $ 15,990 Liabilities Common stock warrant liability $ — $ — $ 5,500 $ 5,500 Contingent consideration — — 4,867 4,867 Total Liabilities $ — $ — $ 10,367 $ 10,367 There were no changes to the valuation techniques used to measure asset and liability fair values on a recurring basis during the nine months ended September 30, 2016. The following table summarizes the changes in the common stock warrant liability and contingent consideration liability (in thousands) for the three and nine months ended September 30, 2016 and 2015: Contingent Common Stock Consideration Warrant Liability Fair value as of June 30, 2016 $ 5,010 $ 5,200 Change in fair value 135 — Fair value as of September 30, 2016 $ 5,145 $ 5,200 Contingent Common Stock Consideration Warrant Liability Fair value as of June 30, 2015 $ 4,852 $ 5,330 Change in fair value 13 (80 ) Fair value as of September 30, 2015 $ 4,865 $ 5,250 Contingent Common Stock Consideration Warrant Liability Fair value as of December 31, 2015 $ 4,867 $ 5,500 Change in fair value 278 (300 ) Fair value as of September 30, 2016 $ 5,145 $ 5,200 Contingent Common Stock Consideration Warrant Liability Fair value as of December 31, 2014 $ 4,826 $ 5,080 Change in fair value 39 170 Fair value as of September 30, 2015 $ 4,865 $ 5,250 Net loss per share Basic and diluted loss per share is calculated by dividing net loss by the weighted average number of shares of common stock outstanding. As the Company has net losses for the periods presented all potentially dilutive common stock, which are comprised of stock options and warrants, are antidilutive. As of September 30, 2016 and 2015, the following potentially dilutive shares have been excluded from the calculation of diluted net loss per share attributable to common stockholders because they are anti-dilutive: September 30, 2016 2015 Options to purchase common stock 5,246,516 5,797,676 Common stock warrants 499,999 499,999 Total shares excluded from net loss per share 5,746,515 6,297,675 Comprehensive income or loss ASC 220, Comprehensive Income Recently issued accounting standards Under the Jumpstart Our Business Startups Act, or the JOBS Act, the Company meets the definition of an emerging growth company. The Company has irrevocably elected to opt out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. In May 2014, the Financial Accounting Standards Board (“FASB”) issued guidance related to revenue from contracts with customers. Under this guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The updated standard will replace all existing revenue recognition guidance under GAAP when it becomes effective and this guidance can be applied either retrospectively to each prior reporting period presented (i.e., full retrospective adoption) or with the cumulative effect of initially applying the update recognized at the date of the initial application (i.e., modified retrospective adoption) along with additional disclosures. In July 2015, the FASB voted to defer the effective date to January 1, 2018, with early adoption beginning January 1, 2017. In March, April and May 2016, the FASB issued additional amendments to the new revenue guidance relating to reporting revenue on a gross versus net basis, identifying performance obligations and licensing arrangements, and other narrow scope improvements. The Company is evaluating the impact of adopting this guidance on its consolidated financial statements and has not selected the method of adoption. In April 2015, the FASB issued new guidance related to the customer’s accounting for fees paid in a cloud computing arrangement, which provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. This guidance was effective for annual reporting periods beginning after December 15, 2015. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. In February 2016, the FASB issued new guidance which significantly changes the accounting for leases. The new guidance requires a lessee recognize in the balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. For income statement purposes, the new guidance retained a dual model, requiring leases to be classified as either operating or financing. Operating leases will result in straight-line expense while finance leases will result in a front-loaded expense pattern similar to existing capital lease guidance. For statement of cash flow purposes, the new guidance also retained the existing dual method, where cash payments for operating leases are reflected in cash flows from operating activities and principal and interest payments for finance leases are reflected in cash flows from financing activities and cash flows from operating activities, respectively. The new guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The new guidance requires the recognition and measurement of leases at the beginning of the earliest period presented using a modified retrospective approach. The use of the modified retrospective approach allows an entity to use a number of practical expedients in the application of this new guidance. The Company is evaluating the impact of adopting this guidance on its consolidated financial statements. In March 2016, the FASB issued new guidance to simplify various aspects relating to accounting for stock-based compensation and related tax impacts, the classification of excess tax benefits on the statement of cash flows, statutory tax withholding requirements and other stock based compensation classification matters. The guidance is effective for annual reporting periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted in any interim or annual period. All of the amendments in the new guidance must be adopted in the same period. The Company plans to adopt this guidance during the first quarter ended March 31, 2017, and the Company is evaluating the impact of this guidance on its consolidated financial statements. In August 2016, the FASB issued cash flow guidance which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice, including presentation of cash flows relating to contingent consideration payments, debt prepayment and debt extinguishment costs, among other matters. This guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If adopted in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes the interim period. The adoption of this guidance should be applied using a retrospective transition method to each period presented, unless impracticable to do so. The Company’s planned adoption of this guidance during the fourth quarter ended December 31, 2016 is not expected to impact previously reported cash flows. In November 2016, the Company paid debt prepayment costs of $0.7 million associated with the termination of its credit facility which will be presented as a financing cash outflow in the statement of cash flows for the fourth quarter ended December 31, 2016. In November 2016, the which requires that restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning and ending total amounts shown on the statement of cash flows. This guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those years and should be applied using a retrospective transition method to each period presented. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The Company has not yet determined the timing of adoption. |
Business Combination
Business Combination | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Business Combination | Note 3 – Business combination On August 31, 2016, the Company acquired all the issued and outstanding capital stock of Runbook, a Netherlands-based provider of financial close automation software and integration solutions for SAP. The purpose of the acquisition was to enhance the Company’s position as a leading provider of software solutions to automate the financial close process for SAP customers and supports the Company’s European expansion strategy. The acquisition has been accounted for as a business combination under GAAP. The total purchase consideration was approximately $34.1 million, subject to a final working capital adjustment, which was paid in cash. Upon the finalization of the working capital adjustment, the amount of the purchase price allocated to goodwill may change. A portion of the purchase price of $3.1 million was paid into escrow for indemnification obligations relating to potential breach of representations and warranties of the sellers and any amounts remaining in escrow after satisfaction of any resolved claims, will be released from escrow on the one-year anniversary of the acquisition. Acquisition related costs incurred by the Company of approximately $1.4 million were expensed as incurred. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the date of the acquisition (in thousands): Total consideration to selling shareholders $ 34,052 Assets acquired and liabilities assumed Cash and cash equivalents 2,564 Accounts receivable 2,593 Prepaid expenses and other current assets 718 Property and equipment 427 Intangible assets 9,790 Accounts payable (285 ) Accrued expenses and other current liabilities (376 ) Deferred revenues (489 ) Net deferred income tax liabilities (2,787 ) Net assets 12,155 Goodwill $ 21,897 The Company believes the amount of goodwill resulting from the acquisition is primarily attributable to expected synergies from assembled workforce, an increase in development capabilities, increased offerings to customers, and enhanced opportunities for growth and innovation. The goodwill resulting from the acquisition is not tax deductible. To determine the estimated fair value of intangible assets acquired, the Company engaged a third-party valuation specialist to assist management. The fair value measurements of the intangible assets were based primarily on significant unobservable inputs and thus represent a Level 3 measurement as defined in ASC 820. The acquired intangible asset categories, fair value and amortization periods, are as follows (in thousands): Amortization Period Fair Value Trade name 1 year 20 Developed technology 8 years 5,710 Non-compete agreements 2 years 180 Customer relationships 10 years 3,880 Total 9,790 The weighted average lives of intangible assets at the acquisition date was 8.7 years. Pro forma information The following table presents the Company’s pro forma total revenues, pro forma net loss and pro forma net loss per share, basic and diluted for the three and nine months ended September 30, 2016 and 2015 as if the acquisition occurred on January 1, 2015 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Pro forma total revenues $ 33,808 $ 22,656 $ 92,856 $ 62,117 Pro forma net loss (5,535 ) (7,337 ) (23,391 ) (19,314 ) Pro forma net loss per share, basic and diluted (0.14 ) (0.18 ) (0.57 ) (0.48 ) The pro forma results reflect certain adjustments for the depreciation and amortization of the fair values of the intangible assets acquired, adjustments to revenue resulting from the fair value adjustment to deferred revenue, acquisition related costs, and related tax adjustments. Such pro forma amounts are not necessarily indicative of the results that actually would have occurred had the acquisition been completed on the date indicated, nor is it indicative of the future operating results of the Company. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2016 | |
Payables And Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | Note 4 – Accrued expenses and other current liabilities As of September 30, 2016 and December 31, 2015, accrued expenses and other current liabilities comprise the following (in thousands): September 30, December 31, 2016 2015 Accrued salary and employee benefits $ 9,016 $ 9,716 Accrued income and other taxes payable 2,173 1,047 Short-term portion of capital lease 558 558 Accrued commissions to third party partners 1,074 2,305 Deferred IPO costs 583 419 Accrued professional services costs 1,813 16 Short-term portion of deferred rent 340 — Other accrued expenses 1,928 951 $ 17,485 $ 15,012 |
Other Long-term Liabilities
Other Long-term Liabilities | 9 Months Ended |
Sep. 30, 2016 | |
Other Liabilities Noncurrent [Abstract] | |
Other Long-term Liabilities | Note 5 – Other long-term liabilities As of September 30, 2016 and December 31, 2015, accrued expenses and other current liabilities comprise the following (in thousands): September 30, December 31, 2016 2015 Deferred rent $ 2,483 $ 3,073 Capital lease, net of current portion 434 558 Deferred revenue, net of current portion 1,000 — $ 3,917 $ 3,631 |
Term Loan, Net
Term Loan, Net | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Term loan, net | Note 6 – Term loan, net In March 2016, the Company amended its credit facility to add an additional $5.0 million term loan (the “2016 Term Loan”) and provide for a $5.0 million revolving line of credit. In August 2016, the Company entered into a third amendment to its credit facility to add an additional $30.0 million term loan (the “2016 Acquisition Term Loan”) to fund the acquisition of Runbook. The additional $5.0 million borrowing under the 2016 Term Loan, $30.0 million under the 2016 Acquisition Term Loan and the revolving line of credit each mature in September 2018. The 2016 Term Loan and 2016 Acquisition Term Loan each bears interest at (i) the greater of LIBOR or 1.5% plus (ii) 8% and can be paid in varying amounts in cash or in kind. The revolving line of credit bears interest at (i) the greater of LIBOR or 0.5% plus (ii) 6%. The Company is also required to pay a commitment fee equal to 0.5% per annum of the unused portion of the revolving line of credit. No amounts were outstanding under the revolving line of credit at September 30, 2016. The net carrying value of the Company’s borrowings under its term loans as of September 30, 2016 and December 31, 2015 consists of the following (in thousands): September 30, December 31, 2016 2015 Principal amount (including interest paid in kind) $ 66,418 $ 29,648 Unamortized debt issuance costs and debt discount (1,035 ) (627 ) Unamortized common stock warrant liability discount (547 ) (754 ) Net carrying value $ 64,836 $ 28,267 The credit facility is collateralized against all of the Company’s assets. In connection with certain events, including a change in control, or if the Company elects to repay the amounts outstanding under the term loans, the Company is required to pay a prepayment penalty. In November 2016, the Company repaid the entire amounts owed under the credit facility, including prepayment penalty, and terminated the credit facility. See Note 10, “Subsequent events.” |
Commitment and Contingencies
Commitment and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Note 7 – Commitments and contingencies Operating Leases - The Company has various non-cancelable operating leases for its corporate and international offices. These leases expire at various times through 2023. Certain lease agreements contain renewal options, rent abatement, and escalation clauses and entitle the Company to receive a tenant allowance from the landlord. The Company records tenant allowances as a deferred rent credit, which the Company amortizes on a straight-line basis, as a reduction of rent expense, over the term of the underlying lease. Contingent Consideration - On September 3, 2013, BlackLine Systems, Inc. was acquired by BlackLine, Inc. (the “Acquisition”). In conjunction with the Acquisition, option holders of BlackLine Systems, Inc. were allowed to cancel their stock option rights and receive a cash payment equal to the amount of calculated gain (less applicable expense and other items) had they exercised their stock options and then sold their common shares as part of the Acquisition. As a condition of the Acquisition, the Company is required to pay additional cash consideration to certain equity holders if the Company realizes a tax benefit from the use of net operating losses generated from the stock option exercises concurrent with the Acquisition. The maximum contingent cash consideration to be distributed is $8.0 million. The fair value of the contingent consideration was $5.1 and $4.9 million as of September 30, 2016 and December 31, 2015, respectively. Litigation - From time to time, the Company may become subject to legal proceedings, claims and litigation arising in the ordinary course of business. The Company is not currently a party to any legal proceedings, nor is it aware of any pending or threatened litigation, that would have a material adverse effect on the Company’s business, operating results, cash flows or financial condition should such litigation be resolved unfavorably. Indemnification - In the ordinary course of business, the Company may provide indemnification of varying scope and terms to customers, vendors, investors, directors and officers with respect to certain matters, including, but not limited to, losses arising out of our breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third parties. These indemnification provisions may survive termination of the underlying agreement and the maximum potential amount of future payments we could be required to make under these indemnification provisions may not be subject to maximum loss clauses. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is indeterminable. The Company has never paid a material claim, nor have it been sued in connection with these indemnification arrangements. As of September 30, 2016 and December 31, 2015, the Company has not accrued a liability for these indemnification arrangements because the likelihood of incurring a payment obligation, if any, in connection with these indemnification arrangements is not probable or reasonably estimable. |
Stock Options
Stock Options | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Options | Note 8 – Stock options A summary of the Company’s stock option activity and related information for the nine months ended September 30, 2016 is as follows: Shares Weighted Outstanding, December 31, 2015 5,904,376 $ 8.62 Granted 332,400 15.29 Exercised (451,315 ) 5.29 Forfeited (538,945 ) 7.13 Outstanding, September 30, 2016 5,246,516 $ 9.49 Exercisable at September 30, 2016 1,642,934 $ 8.21 Vested and expected to vest at September 30, 2016 4,727,612 $ 9.52 Stock-based compensation expense for stock option awards for the three and nine months ended September 30, 2016 and 2015 were as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Cost of revenues $ 150 $ 126 $ 425 $ 351 Sales and marketing 501 602 1,834 1,747 Research and development 198 160 532 420 General and administrative 511 672 1,743 1,352 $ 1,360 $ 1,560 $ 4,534 $ 3,870 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 9 – Income taxes The Company uses an effective tax rate approach for calculating its tax benefit for the three and nine months ended September 30, 2016 and 2015. The effective tax rate for the three and nine months ended September 30, 2016 differs from the U.S. Federal statutory rate of 34% primarily because of state taxes, net of federal benefit, and valuation allowance for U.S. federal and state income taxes. The effective tax rate for the nine months ended September 30, 2015 differs from the U.S. federal statutory rate of 34% primarily as a result of state taxes, net of federal benefit, foreign taxes and a valuation allowance on State of California net deferred tax assets. The Company records a valuation allowance against its deferred tax assets to the extent that realization of the deferred tax assets, including consideration of its deferred tax liabilities, is not more likely than not. For the year ending December 31, 2016, for both federal and state income taxes, the Company’s deferred assets are estimated to exceed its deferred tax liabilities and because of the Company’s recent history of operating losses the Company believes that the realization of the deferred tax assets is currently not more likely than not. Accordingly, the Company has recorded a valuation allowance against its federal and state deferred tax assets. Taxes for international operations are not material for the nine months ended September 30, 2016 and 2015. As a result of the acquisition of Runbook, the Company recorded $0.4 million of federal and state deferred tax liabilities and released a corresponding amount of its valuation allowance on federal and state deferred tax assets for the three and nine months ended September 30, 2016. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 10 – Subsequent events On October 17, 2016 and November 7, 2016, the Company granted stock options to purchase 1,394,345 shares and 28,975 shares, respectively, of common stock at an exercise price of $14.00 per share and $23.42 per share, respectively. A portion of the awards granted on October 17, 2016 will vest based on the achievement of certain performance metrics, and a portion of these awards will vest over a vesting period of 4 years. All awards granted on November 7, 2016 will vest over a vesting period of 4 years. On November 2, 2016, the Company completed its initial public offering in which it issued and sold 9,890,000 shares of its common stock, which included the exercise in full of the underwriters’ option to purchase an additional 1,290,000 shares, at an initial offering price of $17.00 per share. The Company received proceeds from the offering of approximately $151.7 million after deducting underwriting discounts and commissions and other offering expenses. On November 3, 2016, in connection with the completion of the Company’s initial public offering, the Company repaid in full all outstanding debt under the Company’s credit facility and terminated the entire credit arrangement. In connection with the termination of the credit arrangement, the Company paid a total of approximately $67.7 million, which included outstanding principal, interest, and prepayment penalties. Upon the repayment and termination of the credit arrangement, all unamortized discounts were recorded as interest expense. |
Basis of Presentation and Sum17
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Reserve Stock Split | Reverse stock split On October 12, 2016, the Company effected a 1-for-5 reverse stock split of its outstanding common stock. All share and per share amounts for all periods presented in these unaudited condensed consolidated financial statements and notes thereto, have been adjusted retrospectively, where applicable, to reflect this reverse stock split. |
Use of Estimates | Use of estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from those estimates. |
Business Combinations | Business combinations The results of businesses acquired in a business combination are included in the Company’s consolidated financial statements from the date of the acquisition. Purchase accounting results in assets and liabilities of an acquired business generally being recorded at their estimated fair values on the acquisition date. Any excess consideration over the fair value of assets acquired and liabilities assumed is recognized as goodwill. Transaction costs associated with business combinations are expensed as incurred, and are included in general and administrative expense in the consolidated statements of operations. The Company performs valuations of assets acquired and liabilities assumed and allocates the purchase price to its respective assets and liabilities. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenue, costs and cash flows, discount rates and selection of comparable companies. The Company engages the assistance of valuation specialists in concluding on fair value measurements in connection with determining fair values of assets acquired and liabilities assumed in a business combination. |
Intangible Assets | Intangible assets Intangible assets primarily consist of acquired developed technology, customer relationships, trade name and non-complete agreements which were acquired as part of the Company’s acquisitions of BlackLine Systems, Inc in September 2013 and Runbook Company B.V. (“Runbook”) in August 2016. The Company determines the appropriate useful life of its intangible assets by performing an analysis of expected cash flows of the acquired assets. Intangible assets are amortized over their estimated useful lives using the straight-line method, which approximates the pattern in which the economic benefits are consumed. The estimated useful lives of the Company’s finite-lived intangible assets are as follows: Useful Lives Trade name 1 - 10 years Developed technology 6 - 8 years Non-compete agreements 2 - 5 years Customer relationships 8 - 10 years |
Segments | Segments Management has determined that the Company has one operating segment. The Company’s chief executive officer, who is the Company’s chief operating decision maker, reviews financial information on a consolidated and aggregate basis, together with certain operating metrics principally to make decisions about how to allocate resources and to measure the Company’s performance. |
Fair Value of Financial Instruments | Fair value of financial instruments ASC 820, Fair Value Measurements Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, which are the following: Level 1 : Quoted prices in active markets for identical or similar assets and liabilities. Level 2 : Quoted prices for identical or similar assets and liabilities in markets that are not active or observable inputs other than quoted prices in active markets for identical or similar assets or liabilities. Level 3 : Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. As of September 30, 2016 and December 31, 2015, the carrying value of cash equivalents, accounts receivable, accounts payable and accrued expenses, approximates fair value due to the short-term nature of such instruments. The carry value of long-term debt, excluding related debt discounts, approximates its fair value based on rates available to the Company for debt with similar terms and maturities. The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015 by level within the fair value hierarchy. Financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement (in thousands): September 30, 2016 Level 1 Level 2 Level 3 Total Cash equivalents Money market funds $ 14,470 $ — $ — $ 14,470 Total Assets $ 14,470 $ — $ — $ 14,470 Liabilities Common stock warrant liability $ — $ — $ 5,200 $ 5,200 Contingent consideration — — 5,145 5,145 Total Liabilities $ — $ — $ 10,345 $ 10,345 December 31, 2015 Level 1 Level 2 Level 3 Total Cash equivalents Money market funds $ 15,990 $ — $ — $ 15,990 Total Assets 15,990 $ — $ — $ 15,990 Liabilities Common stock warrant liability $ — $ — $ 5,500 $ 5,500 Contingent consideration — — 4,867 4,867 Total Liabilities $ — $ — $ 10,367 $ 10,367 There were no changes to the valuation techniques used to measure asset and liability fair values on a recurring basis during the nine months ended September 30, 2016. The following table summarizes the changes in the common stock warrant liability and contingent consideration liability (in thousands) for the three and nine months ended September 30, 2016 and 2015: Contingent Common Stock Consideration Warrant Liability Fair value as of June 30, 2016 $ 5,010 $ 5,200 Change in fair value 135 — Fair value as of September 30, 2016 $ 5,145 $ 5,200 Contingent Common Stock Consideration Warrant Liability Fair value as of June 30, 2015 $ 4,852 $ 5,330 Change in fair value 13 (80 ) Fair value as of September 30, 2015 $ 4,865 $ 5,250 Contingent Common Stock Consideration Warrant Liability Fair value as of December 31, 2015 $ 4,867 $ 5,500 Change in fair value 278 (300 ) Fair value as of September 30, 2016 $ 5,145 $ 5,200 Contingent Common Stock Consideration Warrant Liability Fair value as of December 31, 2014 $ 4,826 $ 5,080 Change in fair value 39 170 Fair value as of September 30, 2015 $ 4,865 $ 5,250 |
Net Loss Per Share | Net loss per share Basic and diluted loss per share is calculated by dividing net loss by the weighted average number of shares of common stock outstanding. As the Company has net losses for the periods presented all potentially dilutive common stock, which are comprised of stock options and warrants, are antidilutive. As of September 30, 2016 and 2015, the following potentially dilutive shares have been excluded from the calculation of diluted net loss per share attributable to common stockholders because they are anti-dilutive: September 30, 2016 2015 Options to purchase common stock 5,246,516 5,797,676 Common stock warrants 499,999 499,999 Total shares excluded from net loss per share 5,746,515 6,297,675 |
Comprehensive Income or Loss | Comprehensive income or loss ASC 220, Comprehensive Income |
Recently Issued Accounting Standards | Recently issued accounting standards Under the Jumpstart Our Business Startups Act, or the JOBS Act, the Company meets the definition of an emerging growth company. The Company has irrevocably elected to opt out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. In May 2014, the Financial Accounting Standards Board (“FASB”) issued guidance related to revenue from contracts with customers. Under this guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The updated standard will replace all existing revenue recognition guidance under GAAP when it becomes effective and this guidance can be applied either retrospectively to each prior reporting period presented (i.e., full retrospective adoption) or with the cumulative effect of initially applying the update recognized at the date of the initial application (i.e., modified retrospective adoption) along with additional disclosures. In July 2015, the FASB voted to defer the effective date to January 1, 2018, with early adoption beginning January 1, 2017. In March, April and May 2016, the FASB issued additional amendments to the new revenue guidance relating to reporting revenue on a gross versus net basis, identifying performance obligations and licensing arrangements, and other narrow scope improvements. The Company is evaluating the impact of adopting this guidance on its consolidated financial statements and has not selected the method of adoption. In April 2015, the FASB issued new guidance related to the customer’s accounting for fees paid in a cloud computing arrangement, which provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. This guidance was effective for annual reporting periods beginning after December 15, 2015. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. In February 2016, the FASB issued new guidance which significantly changes the accounting for leases. The new guidance requires a lessee recognize in the balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. For income statement purposes, the new guidance retained a dual model, requiring leases to be classified as either operating or financing. Operating leases will result in straight-line expense while finance leases will result in a front-loaded expense pattern similar to existing capital lease guidance. For statement of cash flow purposes, the new guidance also retained the existing dual method, where cash payments for operating leases are reflected in cash flows from operating activities and principal and interest payments for finance leases are reflected in cash flows from financing activities and cash flows from operating activities, respectively. The new guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The new guidance requires the recognition and measurement of leases at the beginning of the earliest period presented using a modified retrospective approach. The use of the modified retrospective approach allows an entity to use a number of practical expedients in the application of this new guidance. The Company is evaluating the impact of adopting this guidance on its consolidated financial statements. In March 2016, the FASB issued new guidance to simplify various aspects relating to accounting for stock-based compensation and related tax impacts, the classification of excess tax benefits on the statement of cash flows, statutory tax withholding requirements and other stock based compensation classification matters. The guidance is effective for annual reporting periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted in any interim or annual period. All of the amendments in the new guidance must be adopted in the same period. The Company plans to adopt this guidance during the first quarter ended March 31, 2017, and the Company is evaluating the impact of this guidance on its consolidated financial statements. In August 2016, the FASB issued cash flow guidance which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice, including presentation of cash flows relating to contingent consideration payments, debt prepayment and debt extinguishment costs, among other matters. This guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If adopted in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes the interim period. The adoption of this guidance should be applied using a retrospective transition method to each period presented, unless impracticable to do so. The Company’s planned adoption of this guidance during the fourth quarter ended December 31, 2016 is not expected to impact previously reported cash flows. In November 2016, the Company paid debt prepayment costs of $0.7 million associated with the termination of its credit facility which will be presented as a financing cash outflow in the statement of cash flows for the fourth quarter ended December 31, 2016. In November 2016, the which requires that restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning and ending total amounts shown on the statement of cash flows. This guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those years and should be applied using a retrospective transition method to each period presented. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The Company has not yet determined the timing of adoption. |
Basis of Presentation and Sum18
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives of Finite-Lived Intangible Assets | The estimated useful lives of the Company’s finite-lived intangible assets are as follows: Useful Lives Trade name 1 - 10 years Developed technology 6 - 8 years Non-compete agreements 2 - 5 years Customer relationships 8 - 10 years |
Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015 by level within the fair value hierarchy. Financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement (in thousands): September 30, 2016 Level 1 Level 2 Level 3 Total Cash equivalents Money market funds $ 14,470 $ — $ — $ 14,470 Total Assets $ 14,470 $ — $ — $ 14,470 Liabilities Common stock warrant liability $ — $ — $ 5,200 $ 5,200 Contingent consideration — — 5,145 5,145 Total Liabilities $ — $ — $ 10,345 $ 10,345 December 31, 2015 Level 1 Level 2 Level 3 Total Cash equivalents Money market funds $ 15,990 $ — $ — $ 15,990 Total Assets 15,990 $ — $ — $ 15,990 Liabilities Common stock warrant liability $ — $ — $ 5,500 $ 5,500 Contingent consideration — — 4,867 4,867 Total Liabilities $ — $ — $ 10,367 $ 10,367 |
Summary of Changes in Common Stock Warrant Liability and Contingent Consideration Liability | The following table summarizes the changes in the common stock warrant liability and contingent consideration liability (in thousands) for the three and nine months ended September 30, 2016 and 2015: Contingent Common Stock Consideration Warrant Liability Fair value as of June 30, 2016 $ 5,010 $ 5,200 Change in fair value 135 — Fair value as of September 30, 2016 $ 5,145 $ 5,200 Contingent Common Stock Consideration Warrant Liability Fair value as of June 30, 2015 $ 4,852 $ 5,330 Change in fair value 13 (80 ) Fair value as of September 30, 2015 $ 4,865 $ 5,250 Contingent Common Stock Consideration Warrant Liability Fair value as of December 31, 2015 $ 4,867 $ 5,500 Change in fair value 278 (300 ) Fair value as of September 30, 2016 $ 5,145 $ 5,200 Contingent Common Stock Consideration Warrant Liability Fair value as of December 31, 2014 $ 4,826 $ 5,080 Change in fair value 39 170 Fair value as of September 30, 2015 $ 4,865 $ 5,250 |
Schedule of Potentially Dilutive Shares Excluded From Calculation of Diluted Net Loss Per Share Attributable to Common Stockholders | As of September 30, 2016 and 2015, the following potentially dilutive shares have been excluded from the calculation of diluted net loss per share attributable to common stockholders because they are anti-dilutive: September 30, 2016 2015 Options to purchase common stock 5,246,516 5,797,676 Common stock warrants 499,999 499,999 Total shares excluded from net loss per share 5,746,515 6,297,675 |
Business Combination (Tables)
Business Combination (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Summary of Estimated Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the date of the acquisition (in thousands): Total consideration to selling shareholders $ 34,052 Assets acquired and liabilities assumed Cash and cash equivalents 2,564 Accounts receivable 2,593 Prepaid expenses and other current assets 718 Property and equipment 427 Intangible assets 9,790 Accounts payable (285 ) Accrued expenses and other current liabilities (376 ) Deferred revenues (489 ) Net deferred income tax liabilities (2,787 ) Net assets 12,155 Goodwill $ 21,897 |
Schedule of Acquired Intangible Asset Categories, Fair Value and Amortization Periods | The acquired intangible asset categories, fair value and amortization periods, are as follows (in thousands): Amortization Period Fair Value Trade name 1 year 20 Developed technology 8 years 5,710 Non-compete agreements 2 years 180 Customer relationships 10 years 3,880 Total 9,790 |
Schedule of Pro Forma Total Revenues, Pro Forma Net Loss and Pro Forma Net Loss Per Share, Basic and Diluted | The following table presents the Company’s pro forma total revenues, pro forma net loss and pro forma net loss per share, basic and diluted for the three and nine months ended September 30, 2016 and 2015 as if the acquisition occurred on January 1, 2015 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Pro forma total revenues $ 33,808 $ 22,656 $ 92,856 $ 62,117 Pro forma net loss (5,535 ) (7,337 ) (23,391 ) (19,314 ) Pro forma net loss per share, basic and diluted (0.14 ) (0.18 ) (0.57 ) (0.48 ) |
Accrued Expenses and Other Cu20
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Payables And Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | As of September 30, 2016 and December 31, 2015, accrued expenses and other current liabilities comprise the following (in thousands): September 30, December 31, 2016 2015 Accrued salary and employee benefits $ 9,016 $ 9,716 Accrued income and other taxes payable 2,173 1,047 Short-term portion of capital lease 558 558 Accrued commissions to third party partners 1,074 2,305 Deferred IPO costs 583 419 Accrued professional services costs 1,813 16 Short-term portion of deferred rent 340 — Other accrued expenses 1,928 951 $ 17,485 $ 15,012 |
Other Long-term Liabilities (Ta
Other Long-term Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Other Liabilities Noncurrent [Abstract] | |
Schedule of Other Long-term Liabilities | As of September 30, 2016 and December 31, 2015, accrued expenses and other current liabilities comprise the following (in thousands): September 30, December 31, 2016 2015 Deferred rent $ 2,483 $ 3,073 Capital lease, net of current portion 434 558 Deferred revenue, net of current portion 1,000 — $ 3,917 $ 3,631 |
Term Loan, Net (Tables)
Term Loan, Net (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
2016 Term Loan | |
Schedule of Net Carrying Value of Borrowings Under Term Loan | The net carrying value of the Company’s borrowings under its term loans as of September 30, 2016 and December 31, 2015 consists of the following (in thousands): September 30, December 31, 2016 2015 Principal amount (including interest paid in kind) $ 66,418 $ 29,648 Unamortized debt issuance costs and debt discount (1,035 ) (627 ) Unamortized common stock warrant liability discount (547 ) (754 ) Net carrying value $ 64,836 $ 28,267 |
Stock Options (Tables)
Stock Options (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Stock Option Activity | A summary of the Company’s stock option activity and related information for the nine months ended September 30, 2016 is as follows: Shares Weighted Outstanding, December 31, 2015 5,904,376 $ 8.62 Granted 332,400 15.29 Exercised (451,315 ) 5.29 Forfeited (538,945 ) 7.13 Outstanding, September 30, 2016 5,246,516 $ 9.49 Exercisable at September 30, 2016 1,642,934 $ 8.21 Vested and expected to vest at September 30, 2016 4,727,612 $ 9.52 |
Summary of Stock-Based Compensation Expense | Stock-based compensation expense for stock option awards for the three and nine months ended September 30, 2016 and 2015 were as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Cost of revenues $ 150 $ 126 $ 425 $ 351 Sales and marketing 501 602 1,834 1,747 Research and development 198 160 532 420 General and administrative 511 672 1,743 1,352 $ 1,360 $ 1,560 $ 4,534 $ 3,870 |
Basis of Presentation and Sum24
Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Details) $ in Millions | Oct. 12, 2016 | Nov. 30, 2016USD ($) | Sep. 30, 2016Segment |
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | |||
Reverse stock split description | 1-for-5 reverse stock split | ||
Number of operating segments | Segment | 1 | ||
Subsequent Event | |||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | |||
Reverse stock split ratio | 0.2 | ||
Debt prepayment costs | $ | $ 0.7 |
Basis of Presentation and Sum25
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Estimated Useful Lives of Finite-Lived Intangible Assets (Details) | 9 Months Ended |
Sep. 30, 2016 | |
Trade name | Minimum | |
Finite Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 1 year |
Trade name | Maximum | |
Finite Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 10 years |
Developed technology | Minimum | |
Finite Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 6 years |
Developed technology | Maximum | |
Finite Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 8 years |
Non-compete agreements | Minimum | |
Finite Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 2 years |
Non-compete agreements | Maximum | |
Finite Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 5 years |
Customer relationships | Minimum | |
Finite Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 8 years |
Customer relationships | Maximum | |
Finite Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 10 years |
Basis of Presentation and Sum26
Basis of Presentation and Summary of Significant Accounting Policies - Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total Assets | $ 14,470 | $ 15,990 |
Liabilities | ||
Common stock warrant liability | 5,200 | 5,500 |
Contingent consideration | 5,145 | 4,867 |
Total Liabilities | 10,345 | 10,367 |
Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total Assets | 14,470 | 15,990 |
Level 3 | ||
Liabilities | ||
Common stock warrant liability | 5,200 | 5,500 |
Contingent consideration | 5,145 | 4,867 |
Total Liabilities | 10,345 | 10,367 |
Money market funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash equivalents | 14,470 | 15,990 |
Money market funds | Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 14,470 | $ 15,990 |
Basis of Presentation and Sum27
Basis of Presentation and Summary of Significant Accounting Policies - Summary of Changes in Common Stock Warrant Liability and Contingent Consideration Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Contingent Consideration | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||||
Fair value, beginning balance | $ 5,010 | $ 4,852 | $ 4,867 | $ 4,826 |
Change in fair value | 135 | 13 | 278 | 39 |
Fair value, ending balance | 5,145 | 4,865 | 5,145 | 4,865 |
Common Stock Warrant Liability | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||||
Fair value, beginning balance | 5,200 | 5,330 | 5,500 | 5,080 |
Change in fair value | (80) | (300) | 170 | |
Fair value, ending balance | $ 5,200 | $ 5,250 | $ 5,200 | $ 5,250 |
Basis of Presentation and Sum28
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Potentially Dilutive Shares Excluded From Calculation of Diluted Net Loss Per Share Attributable to Common Stockholders (Details) - shares | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive shares excluded from net loss per share | 5,746,515 | 6,297,675 |
Options to purchase common stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive shares excluded from net loss per share | 5,246,516 | 5,797,676 |
Common stock warrants | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive shares excluded from net loss per share | 499,999 | 499,999 |
Business Combinations - Additio
Business Combinations - Additional Information (Details) - Runbook Company B.V. - USD ($) $ in Thousands | Aug. 31, 2016 | Sep. 30, 2016 |
Business Acquisition [Line Items] | ||
Date of acquisition | Aug. 31, 2016 | |
Total purchase consideration | $ 34,052 | |
Escrow amount | 3,100 | |
Escrow deposit maturity, description | Upon the finalization of the working capital adjustment, the amount of the purchase price allocated to goodwill may change. A portion of the purchase price of $3.1 million was paid into escrow for indemnification obligations relating to potential breach of representations and warranties of the sellers and any amounts remaining in escrow after satisfaction of any resolved claims, will be released from escrow on the one-year anniversary of the acquisition. | |
Acquisition related costs | $ 1,400 | |
Weighted average lives of intangible assets | 8 years 8 months 12 days |
Business Combination - Summary
Business Combination - Summary of Estimated Fair Values of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Aug. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Assets acquired and liabilities assumed | |||
Goodwill | $ 185,052 | $ 163,154 | |
Runbook Company B.V. | |||
Business Acquisition [Line Items] | |||
Total purchase consideration | $ 34,052 | ||
Assets acquired and liabilities assumed | |||
Cash and cash equivalents | 2,564 | ||
Accounts receivable | 2,593 | ||
Prepaid expenses and other current assets | 718 | ||
Property and equipment | 427 | ||
Intangible assets | 9,790 | ||
Accounts payable | (285) | ||
Accrued expenses and other current liabilities | (376) | ||
Deferred revenues | (489) | ||
Net deferred income tax liabilities | (2,787) | ||
Net assets | 12,155 | ||
Goodwill | $ 21,897 |
Business Combinations - Schedul
Business Combinations - Schedule of Acquired Intangible Asset Categories, Fair Value and Amortization Periods (Details) - Runbook Company B.V. $ in Thousands | Aug. 31, 2016USD ($) |
Finite Lived Intangible Assets [Line Items] | |
Amortization Period | 8 years 8 months 12 days |
Fair Value | $ 9,790 |
Trade name | |
Finite Lived Intangible Assets [Line Items] | |
Amortization Period | 1 year |
Fair Value | $ 20 |
Developed technology | |
Finite Lived Intangible Assets [Line Items] | |
Amortization Period | 8 years |
Fair Value | $ 5,710 |
Non-compete agreements | |
Finite Lived Intangible Assets [Line Items] | |
Amortization Period | 2 years |
Fair Value | $ 180 |
Customer relationships | |
Finite Lived Intangible Assets [Line Items] | |
Amortization Period | 10 years |
Fair Value | $ 3,880 |
Business Combination - Schedule
Business Combination - Schedule of Pro Forma Total Revenues, Pro Forma Net Loss and Pro Forma Net Loss Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Business Combinations [Abstract] | ||||
Pro forma total revenues | $ 33,808 | $ 22,656 | $ 92,856 | $ 62,117 |
Pro forma net loss | $ (5,535) | $ (7,337) | $ (23,391) | $ (19,314) |
Pro forma net loss per share, basic and diluted | $ (0.14) | $ (0.18) | $ (0.57) | $ (0.48) |
Accrued Expenses and Other Cu33
Accrued Expenses and Other Current Liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Payables And Accruals [Abstract] | ||
Accrued salary and employee benefits | $ 9,016 | $ 9,716 |
Accrued income and other taxes payable | 2,173 | 1,047 |
Short-term portion of capital lease | 558 | 558 |
Accrued commissions to third party partners | 1,074 | 2,305 |
Deferred IPO costs | 583 | 419 |
Accrued professional services costs | 1,813 | 16 |
Short-term portion of deferred rent | 340 | |
Other accrued expenses | 1,928 | 951 |
Accrued expenses | $ 17,485 | $ 15,012 |
Other Long-term Liabilities - S
Other Long-term Liabilities - Schedule of Other Long-term Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Other Liabilities Noncurrent [Abstract] | ||
Deferred rent | $ 2,483 | $ 3,073 |
Capital lease, net of current portion | 434 | 558 |
Deferred revenue, net of current portion | 1,000 | |
Other long-term liabilities | $ 3,917 | $ 3,631 |
Term Loan, Net - Additional Inf
Term Loan, Net - Additional Information (Details) - USD ($) | 1 Months Ended | 9 Months Ended | ||
Aug. 31, 2016 | Mar. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | ||||
Credit facility, outstanding amount | $ 64,836,000 | $ 28,267,000 | ||
2016 Term Loan | ||||
Debt Instrument [Line Items] | ||||
Credit facility additional amount to carrying value | $ 5,000,000 | |||
Credit facility maturity date | 2018-09 | |||
Credit facility, description of interest rate basis | the greater of LIBOR or 1.5% plus (ii) 8% and can be paid in varying amounts in cash or in kind. | |||
Credit facility, basis spread on interest rate | 1.50% | |||
Credit facility, interest rate | 8.00% | |||
2016 Acquisition Term Loan | ||||
Debt Instrument [Line Items] | ||||
Credit facility additional amount to carrying value | $ 30,000,000 | |||
Credit facility maturity date | 2018-09 | |||
Credit facility, description of interest rate basis | the greater of LIBOR or 1.5% plus (ii) 8% and can be paid in varying amounts in cash or in kind. | |||
Credit facility, basis spread on interest rate | 1.50% | |||
Credit facility, interest rate | 8.00% | |||
Revolving Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Credit facility additional amount to carrying value | $ 5,000,000 | |||
Credit facility maturity date | 2018-09 | |||
Credit facility, description of interest rate basis | (i) the greater of LIBOR or 0.5% plus (ii) 6% | |||
Credit facility, basis spread on interest rate | 0.50% | |||
Credit facility, interest rate | 6.00% | |||
Commitment fee percentage | 0.50% | |||
Credit facility, outstanding amount | $ 0 |
Term Loan, Net - Schedule of Ne
Term Loan, Net - Schedule of Net Carrying Value of Borrowings Under Term Loan (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Debt Instruments [Abstract] | ||
Principal amount (including interest paid in kind) | $ 66,418 | $ 29,648 |
Unamortized debt issuance costs and debt discount | (1,035) | (627) |
Unamortized common stock warrant liability discount | (547) | (754) |
Net carrying value | $ 64,836 | $ 28,267 |
Commitment and Contingencies -
Commitment and Contingencies - Additional Information (Details) - USD ($) | Sep. 03, 2013 | Sep. 30, 2016 | Dec. 31, 2015 |
Business Acquisition Contingent Consideration [Line Items] | |||
Lease expiration year | 2,023 | ||
BlackLine Systems, Inc. | |||
Business Acquisition Contingent Consideration [Line Items] | |||
Maximum contingent cash consideration to be distributed | $ 8,000,000 | ||
BlackLine Systems, Inc. | Contingent Consideration | |||
Business Acquisition Contingent Consideration [Line Items] | |||
Fair value of contingent consideration | $ 5,100,000 | $ 4,900,000 |
Stock Options - Summary of Stoc
Stock Options - Summary of Stock Option Activity (Details) | 9 Months Ended |
Sep. 30, 2016$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Shares, Outstanding, Beginning balance | shares | 5,904,376 |
Shares, Granted | shares | 332,400 |
Shares, Exercised | shares | (451,315) |
Shares, Forfeited | shares | (538,945) |
Shares, Outstanding, Ending balance | shares | 5,246,516 |
Shares, Exercisable at September 30, 2016 | shares | 1,642,934 |
Shares, Vested and expected to vest at September 30, 2016 | shares | 4,727,612 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |
Weighted Average Exercise Price, Outstanding, Beginning balance | $ / shares | $ 8.62 |
Weighted Average Exercise Price, Granted | $ / shares | 15.29 |
Weighted Average Exercise Price, Exercised | $ / shares | 5.29 |
Weighted Average Exercise Price, Forfeited | $ / shares | 7.13 |
Weighted Average Exercise Price, Outstanding, Ending balance | $ / shares | 9.49 |
Weighted Average Exercise Price, Exercisable at September 30, 2016 | $ / shares | 8.21 |
Weighted Average Exercise Price, Vested and expected to vest at September 30, 2016 | $ / shares | $ 9.52 |
Stock Options - Summary of St39
Stock Options - Summary of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 1,360 | $ 1,560 | $ 4,534 | $ 3,870 |
Cost of Revenues | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 150 | 126 | 425 | 351 |
Sales and Marketing | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 501 | 602 | 1,834 | 1,747 |
Research and Development | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 198 | 160 | 532 | 420 |
General and Administrative | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 511 | $ 672 | $ 1,743 | $ 1,352 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Income Tax Examination [Line Items] | ||||
U.S. Federal statutory rate | 34.00% | 34.00% | 34.00% | |
Federal and state deferred tax liabilities | $ 3,874 | $ 3,874 | $ 5,907 | |
Runbook Company B.V. | ||||
Income Tax Examination [Line Items] | ||||
Federal and state deferred tax liabilities | 400 | 400 | ||
Federal and state deferred tax assets, valuation allowance | $ 400 | $ 400 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | Nov. 07, 2016 | Nov. 03, 2016 | Nov. 02, 2016 | Oct. 17, 2016 | Sep. 30, 2016 |
Subsequent Event [Line Items] | |||||
Stock options granted to purchase shares of common stock | 332,400 | ||||
Stock options granted to purchase shares of common stock, exercise price | $ 15.29 | ||||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Stock options granted to purchase shares of common stock | 28,975 | 1,394,345 | |||
Stock options granted to purchase shares of common stock, exercise price | $ 23.42 | $ 14 | |||
Awards vesting period (in years) | 4 years | 4 years | |||
Proceeds from offering | $ 151.7 | ||||
Repayment of outstanding debt | $ 67.7 | ||||
Subsequent Event | Initial Public Offering | |||||
Subsequent Event [Line Items] | |||||
Common stock, shares issued and sold including shares issued upon exercise of underwriters overallotment | 9,890,000 | ||||
Common stock, shares issued and sold price per share including shares issued upon exercise of underwriters overallotment | $ 17 | ||||
Shares issued during period, exercise of underwriter option to purchase shares | 1,290,000 |