BL - Earnings call transcript Q4 2018

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Operator

Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2018 BlackLine Incorporate Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host for today, Maria Riley with Investor Relations.

begin. may You

Maria Riley

Officer. thank on and Chief your today. Chief participation Officer Good call you is me Financial Partin, Mark the BlackLine; and Therese With of afternoon and for Tucker, Executive Founder

Reform certain Private Before we get those of not our during statements I Act performance would regarding are the Securities our conference that of facts, objectives within this statements and of are forward-looking note call expected call. These like this historical statements made only to outlook started, Litigation the that the including future of meaning date XXXX. plans, forward-looking represent as

While we a or to are stated, update non-GAAP in unless which our a discussion risks expressly filed this A be statements, on will applicable Form and because reasonable, materially use the the obligation are believe statements call currently not forward-looking whether required law. disclaim is as uncertainties. are any new Relations GAAP Investor discussed We measures otherwise, release, at found future non-GAAP. subject except X-K made to do all of with our why any showing versus financial on schedule undertake today. website and financial measures our statements be have reconciliation we non-GAAP based and or results our and expectations press or results available of differ on events Also, we may otherwise by actual our information, could on result as alter forward-looking current investors.blackline.com SEC

Therese to to call I Now, the will turn over begin.

Therese Tucker

business. a in Throughout, of change to efforts a this accomplished their on and XX% past for growth executing we much what that do focused included while This joining our our we set customers many our have year. customers, scale the the strong and seen and we of changes XXXX thank of finish today. proud am us to afternoon, the to BlackLine. in to built you We line. plan minimizing everyone, and a on business. effect out on results, We profit while bottom I tremendous disruption remained be which for delivered increased year to Good our the team revenue can

customers, executing on multi-year, are number drive this like focused long-term long-term one. view. growth. and included to to always our our We appreciate our of sustainable investors In a initiatives. that to strategy is multi-pronged XXXX XXXX, opportunity our our taking which take support progress would recap I this We understand care

our delivering addition great the we advocates In for lifelong user software, and BlackLine. want to best customers experience to have become

with model in invested be amongst We with customers express managers helping journey. are teams, transformation advance customer have all our for their and to the transformation strategic striving SaaS customer our account success more of products the purpose experience they experience as users on and companies. successful be digital and a teams, great superlative We productive and

ACV Chief leader new of were of and a maintained our of Global priority the products. the in as Head of was a our of largest for scores see new began Marketing and our and XXXX. high Officer, our addition During growth Chief Marc in sales Officer. People Chief as in we another new pleased renewal This Asia-Pacific, top February, a a the phase with and next more Huffman Officer included rate Sales, we year, team Operating new customers NPS embraced the to they increased leadership that Expanding

our leadership employees. be I BlackLine. have to employees prouder onboarded customers a the We new disruption the and not management of world-class both our team of successfully while team minimizing could and

drive Matching that and interest and innovation strategic Smart us years, our like past and of help Balancing the Transaction core in Close, of and large Intercompany new Hub, lot couple initiative bringing we effort a product a products products XXXX. market the value. the into finance products strategic expand opportunity with our accounting for the was real to transformation in put Over key growing market for our

we the strategic was also transform Intercompany specialized faster robust to and and with new range focused now During partnerships and acceleration team sales we balanced benefit can the world. three ICH the with companies for Last sales four big products of customers. building came on into support automate firms to our happier the to office. an for of quarter help strategic to see sales as our to XXXX. demand have formal the manage our head year, in We expectations for within XX% digitally of of for of we built record our consulting partner We value go-to-market Approximately products, implementations them ICH officially the which and was additional year we a customers. year, QX An from CFO's ensure ecosystem. XX%. Hub was XX% time

help sales you venture more of well the of Paris SAP’s We we software the our market We to reseller largest new of expand their continents. computing global and for driver time largest the obtain is be which new demonstrably years joint to can and our are short expanded on laid product growth and list positioned eager with markets. many multiple are In customers transformation we about. larger our budgets. deals I'm partner involved deals opportunities. to price is year Singapore, higher. to with also through last included with deal In BlackLine partnership had the the SAP, announced went in landed Cloud customers presence added hear November. BlackLine's of signed expansion. expect SAP large offerings in for and the financial new were partner as for deals a sales to and the world's expanded in a come. agreement of and By in are size QX, to build one a us a digital expected Japan and XXXX, our strategic that average offices We Over Japan, of several These and partnership groundwork efficiently quarter, which global week sure end to new a are accelerate digital transformation reach, demonstrated SAP cycle, help very and our XX%

is still the teams have world. the opportunities encouraged it more pipeline a While number as I'm data have small we additional with and what engage I we am so by of around local early and pleased far, only SAP we points, seen with closely of

BlackLine is no revenue their QX. SAP or agreement There our our renewals, paper in amended. consistent royalty expectations, and Additionally, with on the existing expanded on that share these customers SAP fees was previous renewed accounts now

seen and While opportunity believe so we it for great to our expand long-term what encouraged a have creates are by global us far we footprint.

solid take and ramp. XXXX, year As We results made momentum. longer-term with to goals, partnership, tangible any will towards exited the time delivered in progress our it with strong

As build will and from trends we learnings and move these our we the seen the from year on into XXXX, market. that past incorporate developing have initiatives in we

driving want in initiatives Our business. the growth year. important scaling discuss focus I to is the and for in two mind, With coming that XXXX on

globe. Day product can transformation whole BlackLine's Analyst their the forward we grow partner, are as in for top concept our November. of you First, They scale complete touch they around – evolve. is areas: as for and solution, services. product looking three offering roadmaps, offering and thinking that to as Financial businesses at the software, introduced a and ecosystem whole visionary high transformational mind encompasses a CFOs

delivering to key are effective partners consulting Our digital transformation.

that are expect We construct journey. more will this for to those ready take the us deliver a help complete customers solution

that our we high for points. good Another partners. having In QX, focused agreement new saw early XXXX priority is proof supporting our by with is successful reseller resources on right the ensuring SAP

customers However, it remember remains to strategic growth is agnostic value and is of approach. to that this our just ERP levers, our important one our our

will in ERPs connectivity our and We to invest financial systems. with continue multiple

Their I partners and impressive number call financial the of Conference. at customers. up year, trusted too needs; and Company's American and transformation ecosystems Company references for continues and Annual excel, to a Conference dealing better transformation controls technical to wanted a to grow customers. management, growth and the completeness manual scales record ready Company businesses before InTheBlack that three, a that stock Customer BlackLine’s three and had point that continuous consistent and learning competition. and for wanted from the processes North vendors journey. technology partner continue and Customers with used more I machine solution with and our matching risk, engagements The they the an financial the keep process evolve. turn functionality, exchanges. we customer multiple NetSuite our company and that deemed their found on learned need disruptive and briefly want BlackLine one, our new strategic automation, process stack a included, transformation. reliability of faster best-in-class; and leadership Now, Number to source to their was email validate growth. they needed with efficiency is BlackLine key A partnership for offering address which solutions too to that needed. reasons. systems automation and accounting incorporates of clinical organization initiative. importantly, our as we whole reduced also highlight for European needs that the Namely, its The to create optimize digital wanted acquisition, of two, enhance recognize scalability the themes BlackLine solution They recognized our chose feedback chose and visibility. close existing close resonate with a ahead this large could close some with and A momentum compliance our patchwork excel-driven customers, This fourth better quarter complicated on recently believe their and customer they to financial multiple the technologies automation us key ability our CFO with business risk company product with scale listed evaluated as their most they we to close completed over The technology close. some drive could for that as positioned This prospects and far about was many ambitious strong integration research NetSuite controls, increasingly reinforce talk an Mark, thought our solution in software being deliver And few and growing their

been software had account customer North have Our to upgrade their company ERP. They BlackLine a since and large American project task management. XXXX reconciliations started using a

folders, shared upgrade, Company journal had using additional files, and This documents and matching. add series As their of wanted spreadsheets they functionality, to in was a part transaction ERP process of paper entry journal complex including entry scanned emails. and a

of workflow evaluation. biggest with workflow their they this challenges on focused and during managing their One features BlackLine’s approval

with Our our functionality ERP and expand product customer business increased happy integration am rich also us I new with this ACV. and customer to helped purchased report their compliance that this launched good ease really into recently consistent and and due in of momentum The made QX. implementation. to remain fundamentals progress business we its functionality and the built strong of environment and Overall, demand going the our XXXX.

enthusiasm changes XXXX. with products and made partners. that have tremendous for leadership could in the team our with customers seeing I are We pleased more and have that not vision and we the we be BlackLine’s built

forefront on of Looking position for strategy continue ahead, focused BlackLine’s we to our as the strengthen will growth long-term and leader a financial transformation. executing at remain

the turn to call will I Mark. Now over

Mark Partin

Thank you, everyone. good Therese, and afternoon,

quick non-GAAP. all noted, As remarks during a are my today unless mentioned numbers reminder, otherwise

ASC approximately were less reduction results The standard comparative this an the expenses the beginning XXXX decrease at revenue QX results are operating into than call as $X.X our X% that went The The XXXX on on of $XXX,XXX XXX to QX of was ASC QX XXX discussed XXXX. impact million. effect on and or Additionally, guidance had impact. restated expected. approximate XXXX the

financials a publish will XXXX retrospective filing. QX of comparison purposes quarterly historical for We in our

year-on-year delivered global solutions consistent our business. that XXXX cash driven and mid-market was over would team. We transaction a in performance. in performance a revenue few team our to completing margin million XX% participation the expanded product all from was $XX make we solid and positive which million. XX% a a rates grew to million delivered grew solid the generated year-over-year XX% We We I to to solid Total the operations. across demand $XXX QX like of by and For delivered non-GAAP strong performance revenue income BlackLine are Gross areas XXXX, higher full-year growth saw $X in on for There $XX flow attributable XXXX a to and deliver net highlight. we and offering, year. million. fourth record and commitment for helped partner the matching, profitable cash total including quarter This

finished in a Our International made investments added business We there our rapidly. of Europe quick sales and continued leadership year and progress are our with partners level we under We've has interest seeing and being Asia-Pac also as generated. region. in to reps the grow increased demand growing strong in a and performance new the

reseller under from XX% up BlackLine EBS and from in total business SAP Revenue International QX in SAP for existing last includes last revenue SAP the customers renewables by new QX, year. XX% Our the prior QX customers new sold in represented of and partnership total This the and growth to paid XX% QX from partnership. agreement net under with our in year. of from up consecutive XX% XX% revenue

We figure will this in report to XXXX. continue

key total of opportunities. did increase not XXX new Moving remained year-over-year. of high Sales The number strategic users enterprise products BlackLine the expansion number to We quarter. size. record strong both serve but The the XX% they XXX,XXX very over our across globally. quarter the increase representing quality grew were customers now for strong of of and added and net a new growth to performance in users, the over mid-market. X,XXX deal customers logos We with metrics

of range Our We well for within renewal dollar-based XXX% rate net XXX% approximately revenue was a XX%. year. XXX% to strong underlying retention our rate saw the of

many operating a progress quarter attributable of cash margins and cash at on million flow free level the and churn marketable income at value utilization working. which net to year Gross gross equivalents quarter. the approximately year $X.X drive and positive for implementing flow the XX%. of our of row We cash that last We of $XXX $X raise in million six cash we the is in remains higher QX customer generated the and focused lifetime overall initiative customer believe began net with approximately $X of income. generated million, our In with securities. we are BlackLine strong and to quarters million pleased satisfaction, margin consistent ended We subscription XX% or for in with and higher

margin XXXX, model of to I Before to purposes. I more few overall anticipate would will our make trend our moved modeling we outlook, towards like XX%. In a comments target gross from approximately

our and to continue cloud team to we growth. our As support invest our infrastructure global in build-out support services and

the On the the at step-up and kickoff increases, see in the operating anticipate expenses driven first expense side, salary of we the XXXX. XXXX generally events. timing a We quarter annual annual a between differences tax reset in operating and payroll beginning expenses in by few year

date third our annual First, fourth the we the to of user from are conference moving quarter. the quarter

associated with So accordingly. see expenses you the will shift event

Second, revenue XXXX agreement. on as prior incurring we effective our announced were paying under X, EBS SAP last the fee October that quarter, we stopped we

we period, in expense see this over XXXX. in amortized one-year a As are a those will reduction fees gradual

see weighted second we gradual and to change quarterly we up net the XXXX guidance half and year. expect the this income Overall, a throughout to margin will net reflects step income of operating see year. leverage the Our

midpoint Lastly, annual full-year. guidance our and cash flow deliver the we the free will margin X% assumes for between of X%

Now and let's outlook. quarter full-year first XXXX move to our

momentum pleased our exiting we mentioned, on Therese great the are our and progress are initiative with As making year.

global new key a sales leadership initiatives. playbook than is team SAP, momentum new that and exciting a strategic growth, with team and partnership stronger have a We a with reseller for ever, on

execute to prior on. and annual they we our exciting, will with new. guide confident we While we these that arrange that initiatives with guidance can are year, are are pragmatism Consistent approach

quarter be first expected million of to revenue in range the total to $XX.X XXXX, the million. GAAP $XX.X is of For

$XXX,XXX line, On breakeven we the share report BlackLine of basis. to bottom or per $X.X loss expect net $X.XX to attributable to a on to non-GAAP a million

count share shares. basic Our approximately be will XX million

Utilizing weighted of be to million net in the million. XX.X XXXX $XXX is attributable be the range in BlackLine For $X.XX expected per expect to is of total $XX income $X.XX. to share non-GAAP between average full-year net $X GAAP range million, to million. $XXX the in diluted million revenue we to income shares of XXXX, expected and Non-GAAP

happy and take I to questions. be Therese would your Now,

Operator

Thank Blair. of [Operator Suri you. Our Bhavan comes from William question first Instructions]

Your line is now open.

Bhavan Suri

team. And Therese, so taking thanks And large you. guess on a have some of it touch cycles, the are I'd been of improving? large guess color sense side, you predictability and I'd in you is just large that? demand question fundamental you XXXX for XXXX, deals so you. close do about Thank understand my sales to deal thinking and and Thank rates, just I here together, Mark, think trends the as put the love huge terms as seeing how guys what that? feel congrats around here, to throughout themes about some is I are question I all like of on you love deal pipeline,

Mark Partin

and XXXX. in but is say remember partners, just view and little rigor and deals, and and we unpredictable, line Yes. initiative on the us we've for feel seeing did And we that it's with that that's product visibility invested little of like – our Thanks. finish better where today development built ICH, some our think discipline than we partners better. visibility place, over a the larger team move are whether ability us like in that whether pipeline also or and our them It new have gives regions has consistency is much we’ve It's the were team we improving. the to we back better of globally with leadership is deals to confidence sales execute an Hi, last that year, very strategic that this very to XXXX the drive But in seen, a area. early, been more Bhavan. in under

Bhavan Suri

ecosystem, That's on think helpful, of because that and your My partner expectations? perspective, a where relative guess partners. question Mark. that's I and for partner quick breadth, you not at you either accounting there just to changes the SAP, partner were come follow-up I you. in partners, sort to And contribution much during but and again, guys. SI look with did reach just favorite a you so from any Thank of maybe as quarter so there

Therese Tucker

with Bhavan, Thanks, speak to you. and nice

quarter was large around So this always our partner right is engagement on XX%, which where lands. deals it

where see we'd to exactly, it. like So

general, really stood one we Now would out the is our hiring, thing I year in training, partners invest this seeing They say are BlackLine that partners marketing. are they that they are are in practices. their

is So think positive. high partner level of a we're which I just seeing engagement, very

Bhavan Suri

That’s you. taking to Thank for Thanks question hear. and great guys, my job. nice

Therese Tucker

Thank you.

Mark Partin

Bhavan. Thanks

Operator

Thank you.

from Our question Rob comes Baird. next Oliver of

Your now line open. is

Robert Oliver

guys Hi. Appreciate taking Thank it. my you for question.

a sense representative On that large what company talk ballpark type kind and or the what really at bit and about that's that little And mentioned a Therese And of quick bit accounts? then already. if on volume of versus of as basis, Thank when particular I other there about you. had a Mark percentage expansion maybe whether talk you fee wondering, could I a what opportunities I'd love a mentioned tasks believe follow-up. large of you little expansion. a more expansion little know I kind strategic based was then account software you I U.S. about, was hear bit to win. And recs that customers or an is

Therese Tucker

more organization a we Well, a that processes in, we digital – see to it. that happy account expand tasks years, BlackLine this how customer, because highlighted are starting it's migration are our with why that very and recs there strategically? us at they really decided How years within really of and really thing of substantially. that and spreadsheet can can Rob. interested labor how their recs so is to other one customer use That's particular were to reason because people with look becomes we manual address a actually highlighted with And as sort started could that's years they then is this business okay? and products? base of and we and we're transform great. then Suite within Okay, intensive the they tasks software our yes, for And they when transformation interesting, And to use when we

nice our lot a client for ACV I transformation. So after really it digital ACV, still base there's win, start as current within additional to a was of okay? think potential customers go add-on our

Robert Oliver

you product that know and Thanks, land said Great. I'm Therese. around, with was company, or the hadn't creating within European guys compliance compliance the follow-up stuff as you product on for accounts the took just I U.S. something on went you software them mistaken? certainly think the talk that. been that focus interest up was well? if pipeline I your it and user compliance about conversations expanded quick product. that Thanks. just a also for addition they now Company, I'm on a people that believe opportunities expand And mixing unless that Because compliance traditionally the core opportunity with like And I with and – the of I Can of

Therese Tucker

thanks past. growing than we Thanks it. it We before compliance. bit Bob, about kind pitch, products where little We out basically with to Great. I for have compliance started to in the started about we of talk talking a approached get customers differently soft interested actually that and

given traction User very when This So full this around able and powerful in very had that nice This it customers to information Conference, we price a customers be it, we already we up, compliance completion was one okay? operate not it what our definitely, on customers additional massive really to piece a place. And actually were for upload compliance all and seeing a platform. point they is into scale signed platform, so this product. BlackLine from we're else. And module nice It's a XX value serving GRC single about in our a product. with controls, had somewhere okay? about really be have from started proposition our But to heard internal cases, here, we we is some would a to already very talking not customers last the So about downloading thought okay? many

so, momentum. And will really think it I to uptick that a satisfaction, We're seeing good continue on product. we're nice seeing and gain

Robert Oliver

guys. Thanks Appreciate Great. it.

Operator

Thank you.

question next Securities. Pat from JMP Our comes Walravens of

open. now is line Your

Therese Tucker

Hey Pat.

Patrick Walravens

Mark. to I can had conservative Hi, a coming for you just ask Therese. I your I'm something Mark, is want the think get always And do, about, I Hey, Hi, as where about, sense on how is? we from in script that guidance we're being conservative.

prompted what And to million, look seem where to me super for So X%. But XXXX out? so $XXX that guided go came $XXX conservative. which at you and you out so and – $XXX that came guided doesn't you million, million is you

So But if or it characterize some about maybe for better color think was just harder feel may a around us? that little you And bit XXXX be I be relatively? great. XXXX you could would

Mark Partin

Yes, that's a great question.

more to sales there think place was there the that Last at transition little of different year. years. difficult think I are was that the things taking two and predict bit year, close beginning affect I a the

very – right think into transition of And SAP. including the very was we the we call sales the because but approach, proved prudent approach, to our about that, assumptions and were of pragmatic think we be the was these Our very some we going it difficult while similarly achieve initiatives it I it going given on, to. some have XXXX, I that new to wanted things

about but strategic or that were philosophy can consistent opportunities guide we similar I us started through doing look see be we as go accelerated our potential, long-term uptake year. partnership as if that the execute ramp, now, we that I with can't at is last XXXX, that last Now optimistic what the ability have with, believe and get what move contribution, right we're I then did believe year, we higher very get we there to year we we that we for range on the could product the that to up

tell given the So range range was very we now. on But philosophy – rating is that can about that I you I feel on can't a similar or good that we're conservatism. you we've executing give

Patrick Walravens

place Great. to with I sales there, think Therese, he the does he a execution ask going you feel is QX? for And Huffman XXXX? about he he that has follow-up the is guess in what looking of how sort you happy So not pieces in of then is thinks, I'm was which do And to how right? sort

Therese Tucker

I was good the Marc, I do. think speak to but to for progress about he's am he going feels that I very made date.

he think in I made think contributions, feel that I he like substantial feels has and we fact. way all

I think he's can he for like how rest looking at still of at probably us better XXXX. BlackLine, that the get

Patrick Walravens

All Okay. right. Thank you.

Operator

you. Thank

Our Peterson question next comes from James. Brian of Raymond

Your open. line is

Brian Peterson

and the question. for Hi, thanks taking

how about So should SAP impact that flowing or to from about think the reinvested are royalty the help with able getting the you growth how we XXXX Mark, the line? agreement to in much size the payments, impacted and new we think through revenue XQ us and the XXXX savings maybe bottom outlook? And as

Mark Partin

of Sure. the weighted out from the prior year. or the the fees will over start Thanks. with last question. the half and most back EBS the year, amortize it's I'll to The will arrangement

same think well on the a new sales partnership and that still spent. line. the market, to that view operating year diversifying that reinvesting the these service, Japan customer At leverage able are some of that marketing talked money success and and in and we've we little our in We We're investment support. key there marketing is initiatives for mentioned is including example. Our time, sales investing about, in and and get we

a it's and sort of leverage So operating of both reinvestment. mix

the in into And we have some first with that at partnership the last month global not we is last last quarter. what market that's started new quarter part key but assumptions, XX the validated month, a logo would were opportunities we of were pleased going we'd anyway. saw, On visibility that and that have working been It SolEx that, drive what are large, already with We is that of related we that tremendous we to had them. right its that strategic and pleased and impact, days. in the with We really SolEx didn't got. shot – acquisition, also now we partnership meant to only

with So pleased that. were and of we BlackLine's portion really also that with

And and going expectation one. our on grew guidance given that two no is revenue on relationship also assumption that's going fee that year. a to no And XXXX validated then we is fourth is share have that and that's that number So we that, growth SAP continue and business. existing the on BlackLine paper. our into renewed There royalty number that in they customers quarter in the with in the have through our paper was

Now a But lot points. key there that far, validated early pleased and it's we've our of two still data so it's been very aren't assumptions.

Brian Peterson

Mark. focusing you I wanted impressive any a it. clarify, if And Got record strategic know didn't I ICH. record for for it Thanks, but strategic that ICH Did pretty mentioned deals? include include this in on were quarter. we products, to that's products just implementations,

Just we are curious where there?

Therese Tucker

It absolutely included ICH deals.

Brian Peterson

for Thanks it. Got the clarification.

Mark Partin

then partner. internally, build engage were move benefits saw team, how a talked we we open we on were aperture building Yes, that our – governing about that we through. several of that ICH internal better our you last were the first little the believe QX, you're for would to process we was in year, the occasions our to and those and during say we welcome. I we in really just accelerate team way to with that start And muscle I able the

So positive. that was

Brian Peterson

Got it. Thanks Mark.

Operator

you. Thank

question of Mark comes JPMorgan. next from Our Murphy

open. now is line Your

Mark Murphy

of is Oracle, the Therese, Yes. trend, to Workday, with more or you, trying be business observable where BlackLine connecting. et there will various are other respect less new seeing general your you cetera? In what seeing which is ledgers NetSuite, SAP, Microsoft, to to you cross any words, Thank

Therese Tucker

interesting do pay interesting, we say would – I Mark, to a because that's really it's question really attention that.

connector, Now our retain committed Now partnership – of does just release all of own but a and has the connectors for think customer We of relatively working overall to SAP, business by ERPs. that customers I new companies. ERP for recently But we're general, SAP global board, have mix that our a making sure virtue the the typically other also right? it with been ERPs larger across a that share Oracle we've the we we of And agnosticism. our minority creep up, press the we're same. on seeing super put out stayed do represents set with represent still, in

I we equally to of our well think them one service two it's rather that focusing all than or important on customers really ERPs.

Mark Murphy

Okay. you. Thank

Mark, some a of quantify the follow-up, As I just to to ask the about impact products. trying – strategic of wanted you

about that at on users. I And have revenue of the you're growth so about it we look topline XX% when of kind you then for year. growth, XX% think Is billings the it to and of products XX% think It's guiding fair growth I of XX% pre-representative think that QX, in the those kind you're the spread between the the XX% that drive strategic growth? user that say of really like that uplift Is topline getting out spread trajectory. user XX% to and overall don't of

Mark Partin

a good that's question. Yes,

I say yes, would think I couple a caveats. with of

time. had have strong are increase for some price that getting We point really and

that one account taken number that's so for all – in core into also just view has to Our product. not but be

think and the have similar our is at view guide that a balance core strategic. in between least I in we'd also, XXXX

view good think core the it's acceleration approach strategic kind an I that's right our about spread products. at either balance we least get XX-XX talk on If would and be that will a that, but now. split today we that, of between end,

Mark Murphy

much. Thank you very

Therese Tucker

Thanks Mark.

Operator

you. Thank

Brent question from Our Markets. KeyBanc Capital of comes next Bracelin

Your line open. is now

Brent Bracelin

SAP like in on Mark, you you now a the SAP you're quarter? any length – quarter? it's papers, the into you you first did share early on Thank kind close given time deals the question impact a was or is shorter too of questions I guess think talk down in you. about I early then rev that to just And Thanks. I the two wanted observation? the early got just QX, to had kind have mix drill maybe able an specific of if for that in SAP the as SAP. revenue of in could billings And deferred observations what some you feel were actually do follow-up. and about Therese,

Therese Tucker

that Thanks, market us accelerated the one reasons with their is we for presence Because thought the you Brent. sales partnership entree. would did that cycle. with Hey, thank help this that in sort so SAP of of we

XX Now granted for in SAP we were days. about market last quarter only with

– we point, deals our contracting had not done, did a don't process it's on I a but through could faster So we absolutely anything I see we move than in at ever declare think victory this or could've been own.

So I very reasons think doing that of for nice early those one that partnership SAP some indicators. has

Mark Partin

that quarters of was of the included partnership question My so SAP we large revenue quarter and it with or SAP point that's on from new quarter, with uptick early were That a add an every I new points look quarters EBS even – larger data is from to I'll a we Yes. the If view an the although, through with is got gap the second on XX% SolEx. the year, was Also finished price previous partnership the revenue partners few the contribution we in our last deal. I'll deals, that the economic was and with split that SAP previous of up quarter in left. the part now at measure throughout close your the net the as contributed. under SAP consistent also able

the renewals growth was pretty So And on share. then about the and points. in were we our there early excited saw the no paper were proof and that we revenue quarter also

Brent Bracelin

you in or moving I is have five last dollar a we quarters follow-up for of in net lot on for row. a trend. encouraging. of retention XX But that Certainly, does here early Mark here this seen guess just tick parts deal. is days question What my on kind four down sound

about of of about As of to to down this kind retention, the think just mix that trend the the dollar just to net lands, I'm because the going we continue is continue to forward? business? in going trend down trend think around you larger factors, just trying think about other tick and should

Mark Partin

short-term landing we've whether past related about the it's pricing to Yes. Well, this, long-term or talked particularly have decisions consequences we've the some made that in larger.

So I think you've talked about the right way.

point So I up wouldn't I XX% also And going just where of – is we is surprised the that it consistent. if be or strong We it's continues that to rate think and we into underlying that would be with that. expectation. exited XXXX be down, within be XXXX again renewal a our think

Brent Bracelin

Thank you. helpful. very Okay,

Mark Partin

Okay.

Operator

Thank you.

Sachs. of next Merwin question comes Our from Goldman Chris

now Your line is open.

Christopher Merwin

Thanks Okay. question. Hi, my there. for taking

– in pick follow-up I last guess So a quarter. really on to I high a mid-XXs up the just there billings, from growth up we could teens think nice see

else. one just whether strategic be some the question guidance. or you drivers, then another out the calling and of on it'd products anything would you Just guess, basis. as of to been it might And sort specific I if be, asked been would gross revenue a what problematic book other – asking way continued the SAP on had if guidance of the would have

of to that business that SAP this if terms on year, price on So what up contemplation have look And there guidance you in anticipating would new is impact, basis to prices accounting net the Thanks. like? a higher from any were list? offset of the gross

Mark Partin

Yes, you. both understand questions. I okay. Thank

can guide billings, they vary we definitely On often the talk quarter-to-quarter. don't because one, we don't to and or – first about

growth, right. saw I quarter us growth. global I growth would we on think strategic say point about balanced where the was your products good sales QX it side, mid-market a for is

can the things I say about in was basis. many feeling billings much quarter-to-quarter too a think But wouldn't I it. affect good. pretty the general, so more from internally

will we continue to expect partnership XXXX, the which year. interesting early. help even with do is be contributor it's will think growth, SAP And obviously we point will I guide think be a the to more reseller that consistent first on with us though, last SAP in the SAP

to between more ramp. execute closing and net gap velocity So gross, that get we and and need

from the the can it revenue been. large that more global acquisition that that we've assumes revenue will logo on XX% deals new And given can customers that I to won't won't But help we get the on specifics also us there will share. drive give or distribution, have So assume a guide existing that you can't reach renew on SAP's SAP And might paper. what difference XX% or velocity. our be

So just execution. about on partnership some question ways, and that your the ways, over mitigates and bullish our in for that pretty we're other is ramp year in this long-term,

Christopher Merwin

SAP to any just And or changes the product priceless? of pricing is on Great. price Thanks. there, your follow-up in

Mark Partin

Can say you again that please?

Christopher Merwin

any priced there how to SAP priceless? going change product to be is on Was is the

Mark Partin

don't… I

Therese Tucker

I jump in here. If could

Mark Partin

Yes.

Therese Tucker

of to comparison expanded It's kind products not SAP really an matrix client base their Because offer of Chris. is and that their an prospects. out to got we've apples-to-apples able

comparison. it's So difficult to an do apples-to-apples

Christopher Merwin

you. Thank enough. fair Okay,

Operator

comes Our question [Operator Humphrey. from Tillman SunTrust Terry you. Instructions] of next Thank Robinson

open. now Your line is

Terry Tillman

taking and my for Mark. Hey, Thanks Therese questions.

exhausted I I've of questions SAP think my surprisingly. list

SAP. heavy one going ask terms really obviously I scale about go I was in a on maybe XXXX. that I on is you're to game business. foretell some terms help saved that might Therese, the all going all's you XX And can a with system that change organizational But kind theme, and workload. of second guess Oracle. on off ahead So in be a and hold some of that the bringing my folks might to shock of throughout in hitters, and your help elevate I'll

know, on. on of or didn't the till, them come year they'll maybe later Some don't I of middle

positive a the to territories in reorg of do into as And move hire so so some to there's you faith? XXXX you because Year, along New are people. people far disruptive also you that what are disruption think do these terms think of their disruption, but the How maybe it's you anyways, through expect some of you going are own you

Therese Tucker

given of so amount changes negative disruption, a to how really good a without us, mean some that question I heavy And couple we've though of happening. think a know there's hitters. progress, well couple think real I causing transition we they heavy change of year of for they impact really right. a is made characteristics were Terry. it even the I One them really just XXXX things, because was And navigated that with I in that's you hitters. think that go really as astute hired called

through already know – also right, and highlighted your networks. All The finally long kind particular just their we've as that kickoffs well, amazing second from gotten is third gotten we've that already to for in the when have people, brought through been very I they important talent some a and indicated a think industry sales point, our you've they address year. thing have in which got for people a time, you of point

done I terrific the they've job sales think Our really year just field back and a force is the rolling. getting in of

Terry Tillman

but wouldn't I connector. Oracle are very large Okay. about some in mean I SAP, I around ask maybe shops. And as there Oracle GL promised, the global

some incrementally of So on XXXX? you the move could the talk Thank about some Any you. needle there? deals demand done could or gen work of help kind move large activities we post or into maybe you've as this

Therese Tucker

Thanks. and make better easier topics that in my out information the system the one favorite the projects of to general is the in of it kind you get connectivity because BlackLine, one Yes, of go.

Okay.

became we the we're one simply actually is that started to seeing third Oracle exclusive in of on and that's customers right a that. we good classification about the So releasing Remember now already before our of utilize set of because first they connectors a receptivity of really NetSuite same. Oracle And plan products. that one

Okay.

okay? and Terry? have good. connectors anything Okay, continue I great, we a miss and Did great, with So to I Oracle huge Did already want client base great answer just service. to them service we

Terry Tillman

No, a lot. you didn’t. Thanks

Therese Tucker

you. Thank

Operator

you. our from question last Oppenheimer. Ikeda And of Koji comes Thank

is line open. Your now

Koji Ikeda

in number, here. I'm Great. the metric number maybe that in curious retention my Thanks to there taking contributed unexpected dollar-based questions. just that had question was any I to churn that a in for revenue quick that downtick any here churn this hear, on net quarter?

Mark Partin

No.

in I large in But We rate, include we think do churn a same particularly net a impact customer. called is that in did not see it QX. we QX, so there. out

clean So a standpoint. that of it's sort from quarter relatively

Koji Ikeda

Okay.

Therese Tucker

a that renewal add just to which world-class. also just to And did XX% is we had mention rate, we that Koji,

Koji Ikeda

the color Thanks. was XXXX? I that. on thanks like that management And there some ramping? if the for capacity how has wondering Okay, provide account could strategic is What team, for you looking

Therese Tucker

accounts really okay. because our sort forward-looking why, have go at strategic here's We and to focusing and on companies with budgets are companies that, definitely and transformation, of they more looking bigger are digital

have sure for software and that. can take that we're advantage machine we desire those to and incorporates important of to sort do learning. it's frankly think the positioned that make needs to well So of We us address the, super process automation

sort really what have of They invested we heart that of can product sort of take a an is as whole we've from perspective resources. well vision It perspective. we're the with offering. so and as sales a And both doing in implementation – the

Koji Ikeda

into Thank got Got $XXX for and just Therese. going M&A little XXXX balance questions. sheet, M&A could, more just and over strategy on you to any And thoughts taking a for it. that on your one million beyond? the if I curious Thank my hear you

Therese Tucker

That get wanted do say the Well, really place. to to I lot was get time. to for that the want of would initiatives right through wanted team in me. XXXX. we I to get XXXX not underway. I a had been

see to our think and we a going make customers forward. always partner evaluate better going looking to forward, I always So us we what's

Koji Ikeda

question. for Great. my Thank taking you

Therese Tucker

Koji. Thanks,

Operator

does over session. Tucker remarks. now question-and-answer conclude closing turn to for This back to Thank any call I Therese you. the our would like

Therese Tucker

Thank customers up. everyone bringing of joining you much is your that would support appreciate today. evangelism like new much for us you We BlackLine keep still us very Okay. really and so to and ongoing we your

talk and us joining to you next for you quarter. thank So

Operator

Ladies gentlemen, concludes you This conference. thank in program. participating and today's for today's

may great day. You all a disconnect. Everyone have

BlackLine (BL) 14 Feb 192018 Q4 Earnings call transcript