BL - Earnings call transcript Q3 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the BlackLine Third Quarter 2020 Earnings Conference Call. At this time all participants are in a listen only mode. After the speakers presentation there will be a question-and-answer session [Operator Instructions] I would now like to hand the conference over to Alexandra Geller, Vice President of Investor Relations. Thank you, and please go ahead, ma'am.

Alexandra Geller

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

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

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

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

Therese Tucker

The the demand am today. driving third and improved, quarter environment activity thank we that of another to for well that CFO's has increasing this the momentum validation to is joining We the BlackLine demand is have pleased top and capitalize transformation report everyone, solid mission-critical experienced climbing environment. afternoon, throughout results. us on is seen steadily we quarter to of believe you I Good the positioned priority and have momentum list. and finance

As We leadership, the made acquisition receivable automate the We Rimilia very invest to At to accounts solutions. have our we welcome the know in BlackLine am to the the the are aligned another a I and to with. customer support we'll areas, successful investments we problem R&D, results month, best in growth and untapped day This billion capabilities companies The controller. big for top core mind is $XX got values automation family. a thrilled to our talk combination opportunity team look them companies. the culture to expands two and our over Their ours, for of acquisition of and forward most last customer modern leader this this pandemic, with year, decision market in the initiatives much into and leading space, we a the provider of with Rimilia, our stay market such of continue partner key our investments. our we success serve strong organizational validate to announced strategic and as course we customers. ecosystem. believe these start Earlier of our

speak this Mark step, next in very will detail to which are excited shortly. about We more

accounting to from as finance of the has on months of the it the over to Nearly physical for finance future believe I employees and altered. embrace pandemic, and home. their future are rethinking benefits around an into nine Before accounting. provide for wanted working companies the I turn work the been Mark, footprint, to irrevocably continue update We world

remote permanent make a as to efficiencies shifting already work expect flexible are customers using they well. we BlackLine arrangements close customers have and more found and will platform, greater because our permanent the of Some

very have pleased are that We BlackLine customers this environment. been in successful

spend. ability and mention However, a continuing large meet not to our I the I execute with the companies how processes. accelerating customers to for lead market of digital value while be market. manual opportunity is this we And and proud are unsustainable would team's very customers their than of I we of majority dynamics continue of remiss X% to There untapped believe didn't to needs our serve but support and least, addressable accounting if proposition, will favor We our transformation these struggling am also less during ready pandemic. last our

BlackLine month, going pandemic our a performance to business COVID-XX face quick Tech with able response above Mr. was and our from so last to Rimilia a Cares discuss turn their in for Huffman acquisition accomplish to I And the beyond been these the pleased with companies recent XXXX help Award time. detail. close to of as have what books I'll awarded now, we to challenges. and Just of am the in company unprecedented more difficult over it TrustRadius, through

Marc Huffman

Thank you, Therese, and good afternoon, everyone.

we've As month improvement with in continued demand the stronger environment than the before. each seen Therese one mentioned,

the growth As result, the progress on performance making initiatives. are in our multiyear expectations business. our ahead with These came results a solid of we across QX execution highlight

QX quarters. having pipeline million companies we of quarter about in are instance, who for are feel than growth. deal we very moving transformation more are future The with we continued positive. forward For in experienced digital account projects, another existing The strong have with conversations had in their good more customers have we We revenue. invested a or the and recurring and QX, annual now with in momentum, these customers XX large $X

record resonate frequently strategic and QX continued including and the our some to continues and engaged logos, EMEA. SOLEX accounting APJ offering number with new modern were our mid-market its new immediate volume with MAP playbook customers. SOLEX a Our deals expansions global international wins teams strong QX, as as CFOs. also of in MAP included with many of the turn, of year. ones. in twice The In with quarter customer a another And large drove simplicity global our projects. and prior strong adoption ROI quarter of for well or delivered logos mid-market, deal lead had a as in

SAP's that continue engage yet. increasing year. recover. our competitive quarter skipped These positioning QX implementation and the further strongest success enhanced world seasonal of around back-end priority will in give have with into the our takeaways. and with a Given year. us with going to the economy positive growing we potentially a competitive very pipeline, And have These revenue we customers SOLEX strong win a resulting the teams we pleased who to throughout as they a for the of our end teams driven services indicators beat remain and remote automation setup quarter rates of haven't implementations, believe the in accelerate begins number financial confidence when positive services a the I'm

will to one realized return customer, controllers are a and want who and on There reasons BlackLine just I investment of significant has example many CFOs BlackLine. Now share BlackLine buy finance through transformation.

per company, efficiencies has decision. their in example a today's in Red Nucleus ROI economic in operations. retail total at a who by over a period, XXXX which working becomes of period ROI to accounting critical been manufacturing BlackLine However, great year. and recent Wings Shoe with Wing annual that BlackLine the of Research, the million with they is on buying and assessment analyzed of investment a than part was a $X.X drive Based since X.X more months established valued Red XXX%, and three-year payback Company an determined savings climate, streamline

In standardization their three addition workflows. as and cash controls visibility over payback Wing accounting the in well flows improve Red years better to as realized and organizational rapid period, positive all

Red the increased workloads Beyond analysis, from and streamlined time productivity Wing from favorable reduced benefit cost tasks. savings realized

more journey ROI finance Red team on saved them case of I to Research this their BlackLine, Wing you And about by over reconciliations process directors the product accountants four. XX every their journal entry Our month, haven't the X,XXX Red congratulate reconciliations year. reconciliation in the month through average Wing study The for their Research office their X,XXX cash reduced total would shortening section by hear highly is saving of already, of corporate time cycle and and managers staff returns but retail if Release award won reduced at the of XXXX to hours store each impressive volume review Relations Nucleus hours honor. story. with from the their to per transformation the recommend a work website per X,XXX account entry over Nucleus days Press only our and reconciliations over Investor journal BlackLine product the like of partway an deployment. We XX% you the

BlackLine Our founding and incoming to ability customer customers I serve CEO. our as success of prioritize the that commitment value to plan are to and maintain and principles

Over years, controllership. our the serve we has can places the been where several past to strategy find also it more

Rimilia This a has outstanding This cash controllers It's sheet decisions unlock that more be real and us That's and where that those than in $X vendors. just pay or used money macro product in. priority. today's business. reducing collection corporate become climate, Rimilia balance acquisition businesses time, cash managing software customer fund Rimilia a their our in allocation has In unlock days sitting in capital by worldwide unallocated risk working around capital. up Our and urgent capabilities. helped working of have cannot on is to their sheets. and working cash ability strengthens the investment and helps that growth sheets strategic releasing make to of their their this grows It's TAM software estimated accounts manage balance our capital. customers tied better told corporate CFOs them on liquidity an world. for trillion comes reduce automates and the Rimilia balance sales is

become extended of into adjacent Rimilia, which increasingly acquisition the relevant. With market, BlackLine has its has platform

and the overwhelmingly has In addition, the space months which our been further its of position is announced cycle of with data receivable driving the has to automation greater a validates from strengthened the office since accounts cash life integrity. market controller reaction positive, the In that we view BlackLine compelling by the acquisition, the ensuring enter. end-to-end customers

order-to-cash majority for with their unpenetrated great AI-powered us most XXX the the value more $XX third-party of estimated that the created companies the market about and it's shared independent of manual processes to and excites passion competitive through receivable accounts receivable customers. accounting space addressable for approximately market, is legacy is for accounts largely using software is manage automation transformation than things process. early, According the close billion, and their total One Similar their to its receivable Rimilia's financial fragmented. Rimilia finance has intelligent is automation. accounts to it's market highly that analysis,

new this $XX from the welcome to that increases momentum with they their our enter to and to date. look around billion. XXX happy TAM sharing excited join We're combined and to increasingly more forward depth very established than world team building existing the great headquartered and customer on U.K. over of our relevant Rimilia are expertise. employees their We the market BlackLine's to employees in base and We learn leading with to practices to that have the knowledge

the event Rimilia already people our We Beyond year, X,XXX of registered. which the will more that highlighting has customer be than largest Black,

through the We've of we've and also in and made modernization acquisition, new to nearly November. product significant leadership increased made we'll in with XXX invest success hires We've Black our share our customer strides great teams addition the Beyond in to innovation. in tech R&D the months. position product platform, more be continued towards in XX a and our investments technology last and own In to

pleased what forward, We're of will we recent add expand And now believe continue Moving the our and environment into that the it the QX. means BlackLine's QX activity TAM in path acquisition with lever. seen with we and another momentum growth for and improved we've demand ahead. Rimilia, the

believe We are the long-term. opportunity in market significant this over a the of will innings leader market the early to and accrue

beneficiary a And focus to over invest our we on the to Partin. long-term digital call maintain customer with continue our that initiatives, and BlackLine believe will we firmly accelerated in turn be transformation. I'll that, success Mark As

Mark Partin

Thank everyone. you, Therese, good Marc, and and afternoon,

heard quarter. improvement this revenue of pleased strong Marc, grew are driven Total report environment, close revenue As the another flow. you QX revenue in in results by to benefited a better-than-expected in record quarter, performance and and the driven services Therese profitability We revenue, execution XX% deeper. demand and which sales from and productivity in quarter the was sales consecutive into by rates Digging bit cash

to XX% range year. prior Approximately in prior the And of products in Our up year. partnership XX% business XX% a represented our despite large XX% of total with our we international XX% the in deals totaled to SAP as the XX%. grew anticipated quarter total quarter, XX%, strong renewal of revenue our to revenue, the lower Revenue slightly demand T&E, XXX% net line involved partner. higher-than-expected The marketing. rent, $XX.X line the to from Strategic related for down regulations, of from from XX% predicted, a with facility-related sales of expansion revenue in to impacting continued and risk XXX% attributable income and costs our with savings dollar-based line cost from due of retention of benefit rate to including generated came mandatory Combined revenue, work-from-home efforts. million. we net BlackLine to current virtual bottom

are which for approximately day effort finished XXX we basis and companies, many accelerating of business, investment. effect which can excludes in Like the from management in see to the a in we I'm equivalents of accounting R&D quarter was cash on have last $XXX quarter quarter, the pleased by to and in very of to transaction sales to focused our the paid securities, percent cash as environment. you in where a increased with solve points invest the aging to the flow face QX to million with continue this and in initiative operating $XXX cash for our this team We AR. We in Rimilia, marketable and acquire the $XX cost our $XX the team's prioritized million a ability also QX. transferred while in pandemic. record cash million our long-term cash effectively We free of generated manage advancing million flow due

QX we see we with optimistic to are We relief these they continue the from efforts programs we to out economy our the begins start as woods the results. relief these cautiously were generally are that to work While customers and recover. COVID-related on programs material necessary, of feel as related will not benefits to to

acquisition price will million, payable be million material the existing completed provisions. earn-out was we period of over Rimilia by $XXX purchase funded acquisition impact of earlier, for did the and a subject certain million not cash-on-hand our to any close, $XX the QX financial mentioned As which The of paid results. and $XXX result at and was X-year a to remaining in

we For quarter, to revenue be the fourth the expect immaterial. from Rimilia

due and our to in free and will net transaction headwind have dilutive support guidance. future short-term be and gross to net dilutive to the see investments expect spend you integration growth, QX to also a income margin We cash that and flow can in impact income

for the the range Turning quarter in million. of be $XX guidance million to total which of the $XX now XXXX, GAAP revenue to is expected to of fourth impact includes acquisition, the Rimilia

share or million income bottom $X.XX On range net report the million in a line, attributable to expect $X of we BlackLine the to $X $X.XX to to per on basis.

average Our shares. diluted share weighted XX.X be count million will approximately

$XXX.X $XXX.X the For year the to million to million. of full is GAAP total in be expected XXXX, revenue range

net bottom-line, million $X.XX million basis. BlackLine a attributable the or share we in $XX income $X.XX to the On $XX per to on expect range of to to report

approximately are Our the see average pleased weighted share from strong of performance. all a count QX XX.X will in million shares. the very we members be market, to the In demand better-than-expected and company returning diluted summary, execution

we inside opportunities and drive footprint will now Rimilia incredible customer our move As great all on for on and business. driving finance XXXX. work take remain team our great into in Kimber with a capitalizing sales are further results I be as his CFO, team think a questions. we your base. we acquisition transformation to And We focused our opportunity momentum to strategic our for to expanding and the Kevin expand will I excited large know the

Operator

question Instructions] Oliver line Our [Operator Rob the first with from of comes Baird.

open. is line Your

Rob Oliver

QX. and Good you well. you outlook follow-up my Great. if think okay. And as for I afternoon the on that's question. were a everybody. sanguine Therese, for had Thank comments very Marc, Huffman one I taking much Marc for quick quite mentioned for you, SOLEX then your

guys did channel, recent that was into QX. SAP. from just a pre-announcement optimistic I extent, in to limited you given visibility the but I certain wondering, relative somewhat the have, know seasonality So, quite negative sound to you

about maybe So, a could if little was wondering reconcile bit I you that. talk and those

Marc Huffman

Yes.

So -- thanks Rob.

this We've an proxy a BlackLine's It's proves not is to think performance joint great got for some I and somewhat us. customers incredibly partnership SAP performance. that important great together. success

the As twice evidenced by and prior we've a performance the our about new logos made as remarks quarter, many as strong year.

SAP use as part a entire portion and system its its of ERP of our You But building. customer working only they from our can base is a which business. see

with fairly have serve diverse all serve companies them we ERP well. and different we so all a them, really, We of really portfolio of And systems.

Rob Oliver

that's you you're I a comment And to you you. Thanks And transformation of in a about you. -- for one now Marc. prior, getting you Holy prepared comment was remarks know a rising struck I kind wondering back and be that that towards must been going could accounting And helpful. me, bit a your Great, but seeing, suite know you're little there, was kind about And the talk I I of have to is if here. I Therese, this how IPO rising wondering end priority. a made you and to that, was makes CFO Grail. guys where that always say gratifying the what then CFO-level and what Thank if is to priority? know getting you.

Therese Tucker

that Absolutely. I'm coming And actually not end. hopeful the I'm to Rob,

-- super still I'm Huffman supportive which about, different Mr. of just Let's very excited supportive of and here. BlackLine but role, transitioning to I'm a

are the has very regarding believe gratifying. been or really I spoke last But Wing CFOs Red And me one got. with really award of concept you're embracing Don't it's right. CFO, Even so. really not really this of I'm the So, the transformation companies we embracing. over We've a trend, pandemic, year the that the are they to yet. going is witnessing they in been at actually customer the end. the It digital about write off our the realize. that are that that benefits reasons and the ROI think

focus operations. the a are the impact is both digital level typically it's their it incredible transformation has we on because of so spend. because at seeing And And high-dollar secondly, this CFO, on

and lot really potential is their it both a actually So, modernize things they're plus the things, to getting invest how going that the impact in to do of those for attention. fact better,

Rob Oliver

much. Thanks very Great. Appreciate it.

Therese Tucker

Thanks Rob.

Marc Huffman

Thanks Rob.

Operator

you. Thank

question next line with of Ikeda Oppenheimer. the Our comes Koji from

Your line is open.

Chad Schoening

Hi, guys. Koji. This on for questions. competitive bids deals. what terms my out Actually, the you a in question is Chad new Thanks for and on competitive Schoening here environment seeing I for guys are taking of there have

months. You did the rates deals? the as in six you to terms in wondering new And competition nine quarter. that as competing at win if up any players that new mention all on are I'm there just guys seem up strong popping that has be over for the to of Thanks. in activity picked well, are topic last space

Marc Huffman

the up say, Chad. picking environment. I Well, you, is, demand What's thank would

and become so the time, And that we've we efficient, entered little smarter a just a like since little our performing. -- more performance more pandemic our have business and and has month even we visibility got every

maybe little tide sort tide applies boats. meaning of underneath rising more so demand a is And also is that lot seeing to a things that and everybody the of that activity, probably environment, of

we've the the increased is value, processes difference digital where biggest like really invest a I not terms deal The we received, ROI. legacy finance stuck playbook. modern can us competitive accounting new rates CFOS, where unsustainable exist finance tight feel accounting manual, competitive in specifically for tell of people specifically in and well quick At really our are to to makeup. reticence that transformation. that win In continues got improved we very inertia is seeing to it's velocity, play, scenario around in mid-market competitors, and you time

positioning we're against we battle a in still feel our right like happy competitive pretty inertia So and now. with

Chad Schoening

Super helpful. Thank you.

Operator

Thank question with VanVliet the our next comes of from BTIG. you. And line Matt

open. Your line is

Matt VanVliet

pipeline? look question. portfolio with the a Has a at here is? and about my broaden -- impacting accounting I the overall taking who you've of up Maybe in job to and your us more sort you're you you way how finance kind of guess of acquisition, much of for help Nice office as more? think the org the process? contact added bit little making quarter. it Thanks as just initial covering changed of that's sales your up Rimilia here. Are kind the capabilities Hi. Maybe really sales you the here, chart your lot the

Marc Huffman

to us for blip in do you. Could had Matt, rephrase quick summarize? I'm to the or phone. you our sorry We this just question a

Matt VanVliet

moving sort Yes, worries. as expanded, product internal is? evolved several I up Has acquisition No has point of your who guess the portfolio sales maybe contact has are changed buyer and what Yes. both initial just the process of last or the some given development, and whole months year? you the over

Marc Huffman

you. Thank it. Got

So not substantially.

a been we're Specific area pioneered the laser-focused gives and closed strategy, initiative of persona, think on a ago, addition created Rimilia we I process. ROI The of now. ticket clients think put many can they that and to sort is set identify or customer and focused that controller. management the a value that have our of out so so that us get of to developed good incredible multiyear that two in can through we expertise our the of bring here software the I our is that automation where offerings on teams have years have sure buyer footprint. had paying us that make funded have growing in additional help the really people We that the strategic leader we fact seeing fully contributing such the growth realization account uses and where other where management. place category more we can and the we Making in and what we we account And of the large service we're we controller. good And same we play place to

Matt VanVliet

you're the the And following early environment seeing of the overall deal sort home boat. not throughout on momentum up then everyone sort here. But rock I send the if just let's year conversation COVID the wonder was, of on in

Let's now And been into year new prospect have here as and make a of close happening. try as is acceleration to possible. there what in an sort useful a Has getting of the we year-end as starting conversations with customers something sustained now, place in saying, more going thought. and We're just being than longer our be in to anticipating offices and we not is need difficult back we it's by this because happening.

Marc Huffman

of that. There's answer to variability a lot the for

Some of sales CFOs of environment, have they're own various and it with comes And through it experiences the team teams on really relayed. what then, controllers, in, personal our services that shape our interactions their industry depends business. and their

And fund more people things. to had strategies and comfortable sort more funding they've they continue and sustained is they've transformation finance returned longer, as a who understood that They those, took those impact, underway. breath. to And this become should be of so, some a going

and where that other base substantially were of that drive had for if seen people a will, to in, really needed you in blind we've quite You've processes spot, to pandemic, areas the the in these got some they cases manual of get have and adoption use some they remediate put us. earlier a

the individual on impact say, businesses over sort it's their the to of I So, depending in each environment. would map, pandemic all

Matt VanVliet

All Thank right. you. Great.

Operator

Thank question Matt from comes line the next you. Blair. And William Stotler our of with

open. line Your is

Matt Stotler

first just acquisition. guess, I the questions. Rimilia my taking for on you Thank Hey.

spoken automation of that value lot ops obviously But making, expanding spoken, the the with makes players accounts sense. in the a of there in are a you're especially receivable of BlackLine’s you've the So market. about Therese, ton comptroller, move

reason rationale of So in this what what then the Rimilia? goal? of you pick larger context direction asset the for would differentiation And love to or going understand to that the the was lead

Marc Huffman

America, is and we've great distribution be. we organization, brands have, for nature compelling stack they our can't terms unallocated asset, to obviously, which brand cash. the you got $XX if with. they've that this the by this and the is of lot There's think the realistically, that in organization of with to they've There for see and so an and got that much have potential pretty way They really the artificial customers. of that able TAM good will you a But, in tech. look to controller, buyer, the Europe, to us. happen there's back entire shape and a space this be just company lot at it's realized that, -- we it why here. a around I use billion. Well, we for that this strategy this our to that synergies is don't models their operationalized to of great a get such think We've distribution the North have so We apply adjacent intelligence customers of And we particular the us mission, enduring can growth there's love provide we to We and one the size be is great good and and so rationales serving themselves. to tech data could of got In matching much got sits in of help distribution intelligent just our a expand that that think and eventually. purity of if

So Rimilia. some those with reasons are we the of real important why were

Mark Partin

really value-based Yes. met them tech, we competitor just things, it's earlier, about you it's the a other they're that A complementary a company. the people, It's too. fit. culturally, it a was market, that And year the important product a large not culture -- strong scale serve measure, in ago, is and they we that to can't their too, but large spoke and good good that this in and market And companies. couple think enterprise of very we

Therese Tucker

can you strongly anything about to So already I add that, have to Matt. don't think these guys I feel it. see

Matt Stotler

follow-up, I appreciate on color. just a the strategic as very helpful. And All the right. that's No, front. products then

of we'd just demand things to overall terms about saw be ICH lumpy. for strong pipeline an terms the matching quarter, But of understand contribution, down of seeing step kind transaction like get in in and revenue a the talked Last there. specifically. So you can some in update what you're we

trends contribution to products the and better drove in -- love that we'd just in kind So those the understand market quarter? what in of the in you. pipeline that Thank

Mark Partin

And Yes, And in Look, nine that was saw we large over robust And pipeline six, earlier those products pre-COVID freeze been the had has about digital range transformation our QX as to been driving within projects. to that of strategic and been up. what QX. course. we strategic deals, last months. the sales XX% the our for contribution in we our in see year. larger has Year-to-date, in momentum pick and continue product see record

seeing So to will large close products. our momentum. deals, matching. includes strategic well. and transaction as attached as we're And that forward, ICH, It have three of smart all Rimilia portfolio it's across we'll that moving And see these part we and

we're about So that of part the excited business.

Matt Stotler

Great. again. Thanks,

Therese Tucker

bet. you Yes,

Alexandra Geller

you. Thank

Operator

you. Thank

Our from next with of question Raymond James. comes the line Peterson Brian

open. Your line is

Brian Peterson

Hi, everyone. for taking the questions. Thanks

So one Mark maybe for Partin.

Just over margins, been of on the better-than-expected the course much they've the year.

the there expansion? But is just market. to And I you curious, on this in what's some hone know curious, Just to the margin year? seen looking driving have that the in strength of anything go gained in guys terms I'm we've mid-market. efficiencies

Mark Partin

forward going cloud quarter was year. Yes. strongest public earnest we services. right. and next Thanks, Google, GCP, subscriptions we are the margin that move And had both in in That's Interestingly, with and as into will a and Brian. gross undergoing begin we've QX ever transition with

drag the on been gross talking margin. that And about so potential we've

in But benefited the is last quarters should work we from out really a we've of I that see there. lot two from home. the So that throw what

We T&E rent. are spending in as on not much

bottom And line. so the dropping that's directly to

maintained just there. has it, level have We with, this us marketing some, opportunity pandemic we would some margin into the sales same well-managed the we have call that where really given efficiency came and in I which

to as R&D continued have of We our which been And real bigger. scale R&D percentage actually in has of an G&A, operating increase we're we investment, increase a of get leverage course, revenue. and some in then, seeing sort as

the from line. going from we're benefiting over last bottom is the as we that as that lasts, So to home. believe take really the long margin to value some quarters of couple work from And

Brian Peterson

maybe And Mark. Thanks, it. follow-up. Got a

build thinking added product buy, curious, the Thanks, organically are the of adding about portfolio through is or obviously, versus idea the Just guys. to Rimilia fold. on I'm M&A? to you how getting

Marc Huffman

time looking transformation. in our digital that in the opportunity there's out that and to to back the in and ordinary we office. We people office, an us, of again, our experience It's and are processes at And places their we're at is controller's walking so for the mission. go want come Well, finance all of the -- things when given categories think play. purity those of you're

nearby serve to cash people focus receivable going to across and we're our are great processes close to our be so controller, of We're going now automation. there, those going a it going and And that it, really and the across door, serve the walking out it opportunities automation. there. we customers build that. automate customers continue maintain buy to We're we're application where other are in laser-like find to on to And or accounts play

Brian Peterson

Marc. Thank, Great.

Operator

Josh of line question comes KeyBanc Capital. from the next Beck Our with

Your open. line is

Josh Beck

for ACV? also model works provide the between the all taking can versus other I'm I yours you share wanted if question. the anything I and not you or with you about on color how ask their can or transactional there's if revenue subscription mechanics know don't any there's acquisition. maybe ARR the model. compare of sure to to Thank

Mark Partin

ours base, shot when their most of is particularly dominates about close They bought the give a rates, than million in rate. have $XX of retention at business, renewal I'll XXs. very is terms you in Rimilia model hours something terms XXX%, we it. high greater business a in segment, And high very which to similar a enterprise the customer it. of Yes. to

services, vast They sticky The amount a revenue small super is subscription have similar expand. then They product. our and majority revenue. land a of it's something So mix. to

products so It things as that really moving fourth the And a quarter be can business, with continue business a our that's And To in to be, go grow. large it's distribution, for the model and And a which will I it measure look, forward to is market. excited us. from model, business and because short it we in investing we're dilutive. one think our growing of will in their in time. mentioned,

Josh Beck

of was had hanging Or off meet other do maybe to from that Do sounds And automation. solutions bit them. something module standards? they customers they most of XXX have you it player customers. had little perhaps I didn't certainly a really tried European using enterprise an around and invoice like a ERP, that you It just you like and their came modern think an they find were Very of find of mentioned kind idea the of helpful. those

on customers share any where those come for you context from have can Just them?

Marc Huffman

can haystack needle a payment for to that make good apply are labor, a use -- -- cash those a This companies them. processes feel different really about and the still it who of another lot to spreadsheets, another just manually. can just and cash. learn area just place that things applying manual. looking is continue those make of businesses there's our taking to other that other using a to job data with do to match of frame a these I of apply guess, do kinds honestly, and has would is of find automate, help to you stuck Big time some of how a very, to agents of intelligence surprisingly, split effective. we more They that Not trying trove, it's still more we people, artificial and this say, and files companies very treasure even that that lot And you these you the identification then like of this trying a example second, no in a in exist very teams

Mark Partin

they set base ERPS, the similar have good SAP. Yes. of in customer installed as And with including to to SAP They a sold something a percentage. our ERP,

their We complementary have to on some bit and our their there's own also We customers of overlap. able a some overlap. research do were really product, and love little

they complementary our to with base we ability think be work will have that to customers. very an installed So our

Josh Beck

that sneak Okay. customer commentary one the some there's if maybe with I of tough could in really you I trough exited or we're mean can a can you about retention, maybe maybe how Just And net about like just I the talk quarter? sounds here? health it of lot that approaching a the dollar mean, more, share when the sense. does context it think certainly perhaps Just base. That color in any just And a makes around any there. the programs, relief revenue

Mark Partin

program, really Yes. lot more needed to the than requested. were or Well, look, relief geared we offer a ultimately up was customer

But weighs in on net we And things. dollar-based retention is will impacts it it rate and and we the even results couple impact it. just that a that based a where financial our it is QX, was of stand The which environment. demand see think and lower be it's decreasing it in Not is also on only so overall on relief, QX there today.

improving, While it come XX-month and has a rate. is it down, that's

wouldn't don't And to on I QX so rate, a that -- it is because does trough I respond say XX-month formula. a

back about thought. demand improves, less really than to we continue start that was the -- demand getting customer as So It's relief in future can was rate the of stickiness improving. up. environment it's The to pick the again, the But solid.

Josh Beck

helpful. Really everyone. Thanks,

Mark Partin

Thank you.

Operator

comes question with of Chris Merwin Our from Goldman line next the Sachs.

is line open. Your

Chris Merwin

being to into products? think start force we my terms we like then initiating on impact as in like progress period ask enterprise retention some to of other you maybe it larger taking start as for of about Thank feel I to this And how there new need the this and customers? go to net sales the Yes, ramp-up getting question. you the dialogues today, start separately, on of this when sold to Rimilia enterprise. might much investments the see selling wanted make should sort your you. mean of ready make? any well. to are already about ability is so to in Thanks product your you sounds it's Okay. I Or

Mark Partin

as Yes. Great. this moment and and market in demand, a market. the reasons. cash given to the and a heavily our in of number time for customer invest and is Thanks, this Chris. in wonderful a have the large is company market our intention Look, we quarter drive pretty year of solidify opportunity. that management into fourth It with They go moving starting our to next event prioritization to ability

they our So scales -- in to the continue bring have them have other We -- that in largest organization. today think that and be investment their products product as they we'll well. will their maturing along what to invest in the portfolio,

the course next of ready want product of the the But space and So to with go into year. people sort and the respect to that, our it will market. instantly in be invest we over to the

to intend we that. So do

Marc Huffman

year. end us. We're fiscal Yes. And to our the really good I for is the think timing coming of

we list scenes, products the got now can we price teams pipeline. focused goals coming are And with QX against front smaller laser-focused that what opportunity the has plan right team us just in we ours, things. January, get had to the -- where integration that in execute and on of on people so on our those on really for realizing trying really team, is benefit on focused our into those them think doing a They on who we're investing a the in We've behind opportunities albeit financial humming executing than existing their have sort are them. the robust meet sales Those of of them.

around of mentioned areas. we that additional be We then some some business that lastly, that to Mark growth other investing bring further in have initiatives. can highlight realized Black our And we're even in terms are really capabilities in really, closely. the to being to universe is to November the are very here right be and new excited now able produced conference, beyond capability which and this entire BlackLine delivered

Chris Merwin

Thanks much. so

Mark Partin

Chris. Thanks

Operator

Thank you.

Murphy comes Mark question with the JPMorgan. of next line from Our

is open. line Your

Matt Coss

the And your that Over you in a you quarters, do Mark Has about count. it's head change trends been pretty all Murphy. the X growth to on to changed good rate rest X in XX% This steady QX? about that the sort QX? year? hiring Matt Hi, year-over-year of at expect last afternoon. XX-ish Can in for of is in talk at of Coss behalf

Mark Partin

Matt. Yes, hi

that reasons. adds steady across Rimilia, of addition You're primarily overall tech for the XXX higher has the the to right. little then pretty employee board, from R&D XX%, that, employees the It in XX% population. been organization obvious than around over with And a and

typical QX, will As the into the again year, record and year of relatively of up back starting usually then this it end is at started seasonal, That's of this given year. what company of We QX in remain with just next hiring, we and view into going that well. our our sort that's head as beginning lower normal a year that's and typical anyway. next steady. happens with quarters slightly ramps that, in X And rhythm

Matt Coss

that mentioned getting helpful. I press U.K., and Domino's sure I'm the the already Domino's, the they're customer. That's read U.S.-based release the And pretty Ireland in business and

that expansion, of about customers think the well, do for -- is you it's of and been something that large you something those sort number global you win you've have, and global of something As that you base the done seeing that but at that sort look your you're… opportunity customer elsewhere,

Marc Huffman

Yes.

it's one fully initiatives, our growth management. multiyear of So invested clearly in account

that experts fully management, things to So at come multi-national now these in the each our how and around to play don't here and customer increasingly, into invest understand in other that office. world. playbook you sales funds where a in a in account world process companies the leadership brought operate scale, see fully allow distributed other teams environments And across the these get to

with so organizations continue these And continue to you'll out succeed and BlackLine. I see, think, large distributed roll to

Matt Coss

Thanks very much.

Marc Huffman

you. Thank

Mark Partin

Thanks, Matt.

Operator

next line of with the from Our question Truist Securities. Tillman Terrell comes

open. Your is line

Unidentified Analyst

Terry. actually question. is This on for taking guys. our Nick Thanks Hi, for

So large deal related to the momentum. of kind

deal majority partners? really the you can through basis? guess identifiable case-by-case that sourced guys these And You of pace vary ARR. I moving repeat expansion momentum common seeing having customers. customers a understand XX these adoption customers on forward? Just talked of with initially be, million continuing does plus I are larger large with question with and about would now our it and trying expansion Or in have customers to in XQ guess a than to one adoption pattern you more a continue these and

Marc Huffman

to partly, because I'll the how you patterns fairly purposeful But in Well, identify that. leave Partin. been pattern, doing we're yes, these to of see the start we've attribution, Mark in terms

use these customers cases. trying of best we're to on set well-known So land a

those of our think So as leading practices.

nearly their basis, that start really, on and would introduce three If then ironed do sort who we four you're going manual of have. from you on out, momentum And from and needs that and we and benefit accounting, then into them. move we to we these that X,XXX and modern depending something start really with companies those we like case-by-case as unsustainable well. experience well additional or were as with going a to do industry, largely get use leverage to things cases can And you have priorities their experience they that, the build

have BlackLine, that said really a And think driving many great that's around we paying bit for time, And of like take over I I so on, companies and on, it. them we a think for they matching that's of sort And high momentum this engine. now that's quite amount that. our accounting I gain what's journey with add use getting that of strategic lot how cases product previously, value so

Mark Partin

and bring when The that five solution become does Yes. that solution, customers to team went in million, And an capability business. took strategic the the now can we those much land being large five ecosystem them management that part They to can that customers there. part is can the we've old. And one of that's two delivered of which of over faster. BlackLine. And differences really years exciting that's Today, had this of large there. deals and that our big due and point partners that customers overall and XXXX, account has SAP engaged the partnership, public we measure were It to mentioned. Marc $X in get to years been get

So us, large transactions has for XXX,XXX little been the over enterprise. in average in the a

million $X and scale seeing exciting. footprint So can do that companies to over is very

Unidentified Analyst

guys. it. helpful. Thanks very Got That's

Operator

Brent Piper And our will last Bracelin come of Sandler. with line from question the

Your open. line is

Unidentified Analyst

Claude on It's Brent. for Jeffries [ph] Hello.

even promotion, record or to with go-to-market mid-market specifically CFOs. is you're that for mid-market of on MAP. success question these logos, a choice Good resonating and and -- hear plan implementation that there First another the that's after number making

Marc Huffman

to the well-worn very actually controllers. say finance I sound this think well, -- I'm it's CFOs doesn't provide but people for it that path and that digital towards a appealing appealing, and going We the term, transformation.

Our very delivered expertise very software bundled people that with quickly of sort That's really, ROI really And them efficiently. packaged really and together to and and getting and quickly. live seems our resonate. getting

Unidentified Analyst

competitive apologize but Great. come question And it landscape for I getting up. the again, has

indication some accounting about I've had an a really about a You major we this? the provider how talking released thinking and quarter. upgrade Or market Is ERP virtual have close grown should a this has cloud-based last just be customers overnight? that today,

Marc Huffman

we companies And space, they've interested able those people, to to for between automate two solution big, things. can checklist then play deliver the market being comprehensive books and you are ERP. across margins entire And for terms more there of of big, and a of accounting significant apply gap deliver A provider, but of difference processes to the a cloud-based And controls selling interested ERP ERP this value the I the in the more in that. other this There's primarily to on. manage sort is we're on think to able the in your the latter. on continued close what sort in close really clients big that -- that process in is we're focused

Unidentified Analyst

you. Thank Great.

Operator

the remarks. Therese Thank over to turn closing I'll now call you. And back for

Therese Tucker

referrals, And today. for you keep your joining grow. for coming. helping support, thank Thank Thank you. them us continued you, us It's everyone, please your

Operator

does program. this the conclude great you day. Thank participating, Ladies and a have for and gentlemen,

BlackLine (BL) 30 Oct 202020 Q3 Earnings call transcript