Earnings call transcript Q4 2022

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Operator

Good day, and welcome to the Q4 2022 BlackLine Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker, Mr. of President Vice Humphries, Investor Relations. Matt may you begin. Sir,

Matt Humphries

Financial joining Good Marc me With thank Partin, Huffman, for afternoon, you us Chief Mark on and Executive of today. Officer and Chief BlackLine; Officer. this call is

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

Commission, actual based While these are reports materially, including we the stated believe our Securities our forward-looking XX-K expressly result to forward-looking by on subject otherwise, made alter uncertainties, those any or in of except our not events reasonable, and update could in future statements to results disclaim whether law. any as and as as statements and information, today are during do We particular, applicable of expectations statements, are current periodic as a undertake Exchange differ or XX-Q. and obligation Form Form and with new required our risks call filed the

currently the available stated, Form period All or these be comparisons which otherwise website we earnings measures of this X-K year, financial our our non-GAAP financial at last our of historical corresponding investors.blackline.com measures otherwise versus may filed Investor and results on A relate release, the GAAP reconciliations our unless And today. with non-GAAP. information call is the make Relations of non-GAAP SEC call unless in on our on be disclosed found to regarding discussion noted. also, today will on

over Chief Marc to I the Executive Now, BlackLine's Officer, turn call will Huffman. Marc?

Marc Huffman

us for good everyone. Thank today. and Matt, you, you afternoon, joining Thank

XX% out rounding $XXX profitable up results fourth full for revenue We solid reported total delivered a for QX, quarter XX%. growth. up demonstrated year, year BlackLine financial and million, the of $XXX million, of

the our targets We also delivered in achieve Investor sustainable efficiencies, further to ability the confidence operating expense expansion with out and giving Day. to management, margin at us our medium-term combined disciplined laid quarter recent due in

Turning macro to on on an cycles, performance which seeing the noted ongoing deal uncertainty. in and environment We're reflects update our sales as calls, our prior elongated QX. earnings buying behavior we market customer still

win demand in delayed of ongoing at demand rates strong long-term to near-term While healthy confidence be expect our business, signals influenced we and budget top competitive reinforce by re-prioritization. the funnel and decision-making

performance embedded bookings into underpins reflects will lower-than-expected revenue speak guidance, to and Mark we've these assumptions Our the which conditions Partin XXXX our QX shortly. in

customer in BeyondTheBlack We're conference many to today November. listening of pleased that participate were our able in you

some we As and part solutions enhance largest the new of of unveiled global and of event, programs enable, accounting. the enterprises series transform and hosted a that

Specifically, BlackLine we such Analytics, and as and Reporting solutions or FRA capabilities innovative Accounting Financial announced new Studio.

Dynamics Microsoft our new Application and connector. Playbook XXX expanded Cash also our unveiled Accounting Modern to solution We a

value customers, solutions. Additionally, our and we of to our drive enabling services to added new of industry-leading to time greater offerings support value them the adoption accelerate for

directly into our above In the we from fourth QX. following customers in positive multiple of deals, received FRA our expectations. and a conference signed which event, the we very quarter Following number wins end, feedback prospects, in customer weeks resulted the

growth confidence BlackLine. their opportunities we're fact and early, BlackLine ahead innovative are that reinforces supports speaking While us differentiates in the solutions are the the for our we that wallets further and still customers market trust delivering the with long-term

with the to successes recent on for availability the accelerate a adopter note, for few later number transformation of summer. already signed we've are towards becoming we Accounting seeking office early journey this tracking These the Studio general platform years BlackLine's we customers Furthermore, of BlackLine their Of planned demonstrate company innovation and the focus the over served have CFO. additional to next BlackLine. digital

products our in progress portfolio. strategic to Moving

are recently extending Through SAP actively process announce our capture that we the moving unpenetrated our non-trade large forward management intercompany are ability and SolEx intercompany customers completed SAP market. financial for the reach expanding prospects SAP and to our to PQ solution additional teams now pleased We solution. this sell our partnership, to for globally, to and our

a extends extended changing and ensuring compliant invoicing world and in remain leader recently automation, receipts. Kofax, expanded requirements solutions, invoicing we relationship BXB customers electronic alliance solutions. And capabilities compliant This intelligence electronic adding finally, receivable BlackLine’s our automation global AR globally rapidly around our to strengthens with accounts with the

evolve to between opportunity. we our continues portfolio market and strategy, alignment the product strategy go-to-market Our as strengthen the

As you action our of goal optimizing we and announced saw December, to was macro that driven demand. market by an in near-term our largely uncertainty capacity existing

all go-to-market for We strategy. the reps, and As product force's portfolio a part opportunity. market with we product our made quota to sales strategic introduced several of our quota-carrying the incentives aligning this, changes

component efficiency, enable removed quicker with customers. wins in we friction teams, expect reduce Additionally, which our to and the overlay sales have we largely improve sales

force still BlackLine's part growing strategic efficiency. and While ARR this driving in early key is our sales this evolution, of goal this alignment natural sales products, ensuring with of a higher of

and bit the take a a in results QX the detail. highlights our more quarter from let's to Now, moment review

our some and APAC In Japan. was delivered in sales markets, a important quarter by wins a performer led record strong

logos business American new Our consistent and great deals. relatively with expansion some remained North

in As remained relatively to business region. macro soft continues environment as expected, EMEA and the activity on geopolitical weigh that

by this relative partnership. in bookings we strength our customer driven side, customer our the saw enterprise, especially SolEx quarter, in some the new On

had ARR, quarter, X% finally, customers XXX,XXX. or up year-over-year to And more deal increased XX average generate Additionally, million we up that $X sizes this XX%. in

the of airline wins, Qantas. we strong new deals signing Alaska still the market, as Airlines Despite the customers uncertainty with examples and see ongoing and in including several of existing such

and businesses. the leverage of customer to many airlines serves efficiencies largest global drive their and solution BlackLine our reference, across For who automation teams

net competitor of many one great successfully we digital deal, signed the looking and against away largest modern world's goals. new features airlines lacked to a was SolEx who that execute of the functionality from transformation their needed to move In a

As how part in and strength successful leveraging of best-in-class network, partnership solutions can future partner BlackLine's demonstrating of our we leveraged SAP support were global our the growth. our engagement, their consulting be to

our American our signed capabilities with high combined we a Additionally, and close producer, intercompany solutions. leveraging record innovative solution core SolEx the North largest the deal and energy with automation of chemicals financial

also of set challenges. of that sustainable grew remain key part digital a complex includes on a a ensuring was project and resolving that focused growing larger intercompany transition, processes as they As while customer transformation this cloud efficient

complex large-scale EMEA, in Renault, their our digital support This automobile European manufacturer. process of to of Finally, embarking a a transformation and SolEx signed partnership. was we becoming leading vehicle leading part manufacturer customer ambitions on a electronic new as

digital this, reimagining we efficient, Having execute to clear processes partnership partner choice was growing in a their transformation they are and As financial automated look over compliant forward manner. to and a better this their of part an BlackLine as strategic time.

we more business. choosing deal stage our AR to continuously in broader In our saw work notable we offerings. Cash for long-term while target this solely in and and quarter profile instead our platform the setting are Furthermore, as expanding the activity automation, AR seeing refine we of success acceleration customers our enhancing customer more Application in selecting a solution,

their saw record this thereby the signed up unlocking in we payment new capital AR to see automating of $XXX customers billion. today's to business XX% working year the over global business environment. our Notably, order-to-cash from and multiple support existing uncertain We value who benefits process

for Playbook who their In support solution and to capital Modern one a working Application is improve leverage Canadian sign purchase example, were we recently Accounting profile. growing Cash to an able AR future announced and looking drive automation, growth our to customer

we BlackLine exceptional part value platform As process, modern is can these combined other deliver such AR offers, value and matching matching. strategic transaction This a hand-in-hand of demonstrated for how delivers customers that of for as AR competitive and tools exactly the BlackLine. this deal work with type deal and the

financial we data. UK another leveraged In market AR with leading a competitive expand instance, provider to platform of our

customer, that existing win global requirements. seeking value tangible to As processes deliver All unsustainable collection opportunity they and great and were another in, had move robust and to manual met customers. away and to efficient regulatory ensure place in an they from cash solutions

investing see customers as remains against In our uncertainty trust their markets, business the our appropriately for creation. with market confident clear. we We ahead in value closing, executing align while around during our to and is I And world of the the well for remain while employees conditions on growth. thank times. we're future uncertain these BlackLine dedication, long-term want that deliver strategy value we focused for positioned go-to-market determination the near-term we our

discuss the to outlook. to that, financial I'll turn and of it With performance our Mark Partin over details our

Mark Partin

everyone. and Thank you, afternoon, Marc, good

further productivity across year, BlackLine out margin and expansion reported we the driven and solid top business. closed as line efficiencies by growth further the

on in we in and were what to this, in efforts Expanding into we in and future success. Marc Despite to This last focus the while that the few continues as deal saw buying in continue positioning what our mentioned near lower-than-expected business periods. term middle expected the we most of EMEA bookings cycles weeks quarter earlier, market customer was uncertainty evident influence to QX behavior. the performance especially market long-term the control on as in can deals for close slipped QX

XXXX. us give deliver against see we targets multiple such, confidence As our in that to factors

Marc took to action and we recently capacity go-to-market near-term mentioned, to as strategy. enhancing while align First, our demand refining further better

unramped seasoned XXXX a entering hiring and period and efficient we sales of a as force more capacity. heavy we're lap Second, with sales

network competitive and and markets. we with reach customer continue of Third, see Studio deliver continue and rates BlackLine solutions our global to engagement, And expand force innovative we win finally, develop, to our capabilities to activity arm Fourth, top continue to support revenue. healthy sales partner and incremental ultimately our like we that funnel expand and new drive across Accounting capabilities. build our FRA

QX. compared growth in revenue value headwind stronger-than-expected some the unlock XX% as prior in $XXX highlights Also, XXXX. grew embedded to utilization. Note, our Now, let's point XX% to X a year services higher Total up was the revenue drove fourth for the professional versus of for FX the desire quarter. customers to to growth quarter demand million, solutions review resulted of

We XX% year, from year-over-year. obligation, RPO the headwind million, growing total XX% was Remaining X-point or a annual a growth $XXX year-over-year. Calculated XX% versus of ARR, last over despite closed recurring with up XX% current FX. billings RPO, or revenue, quarter was with increase performance

to sales, high of driven and XX% from Strategic by product performance solutions. and FX. for represented ROI retention XX% automation healthy the net in quarter our QX. at total to headwind new QX, retention revenue customers the was year bringing customer XXX it X.X-point in and added We includes a count end of XXX% the up in Net strong demand remained and X,XXX. revenue picked Gross high remained

represented XX% For Products the last X and up our target at year the full year, points Strategic of from of XX% range. end sales, upper

growing as were Partners involved our drive of XX% deals opportunities. we in to additional partner network large leverage

saw XX% SAP partnership expected, multiproduct total new sales SolEx a signed As deals strong In record globally. we QX, as net we from performance to relationship, our several leading large quarter revenue. represented of

Non-GAAP delivered quarter impressive performance came our margin at margin. with above utilization gains. productivity gross to in higher services, of margin XX%. in subscription the expectations to overall teams Shifting non-GAAP due In and gross additional XX%, our

Non-GAAP over year. quarter, margin combination an efficiencies a here the outperformance, Improvement notable operating X-point and last versus by operating margin management. gross in and X-point driven marking QX XX% was was of disciplined a improvement expense improvement

XX% million $XX.X the non-GAAP was versus BlackLine in and QX, to attributable net QX. an income year sharply representing both margin, income prior net up Non-GAAP

of million margin We flow free quarter flow $XX.X the cash million of XX%, the over $XX.X and prior in cash points quarter. in expansion in cash representing a with generated X operating free flow

cash, And towards providing and $X.X ended billion XXXX securities, great year with financial as finally, we beyond. we and the marketable flexibility in cash equivalents look

we anticipate and We Now environment half in persist QX guidance. turning the second to market experienced of to the 'XX through XXXX. uncertain

customer and deal We processes. to extended lengths resulting in extended times remain expect lead processes remain deliberate, as decision-making cycle approval longer centralized and

we these our in also an further FX, reflects point factors headwind to approximate All efficiencies from expecting in, our year the business. while are growth our guidance operating across appropriately believe goals which we is Additionally, full guidance. considering embedded of X driving revenue

GAAP revenue million For the the to XX% XX% of growth first range approximately $XXX to compared representing million, $XXX the quarter we expect total in of XXXX. first be to to quarter,

$X.XX non-GAAP net basis. in the a $XX BlackLine to attributable report to to expect to of per million We or range million on income $X.XX $XX share

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

full XX% And to to expect year for year, the to XXXX. in representing we total of revenue XX% full the compared XXXX, GAAP the million, growth $XXX $XXX range million

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

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

want our as to XXXX acknowledge customers work all leadership our we their Before hard Q&A, to turn innovation. their for of thank and I to and our BlackLine as efforts who in employees well continue our

market to expect opportunities ongoing drive term, the in remain ability the we uncertainty While confident near long-term our ahead and growth. we profitable in

operator to your ask the the discussion I'll open to Now, take questions.

Operator

come the Instructions] Oliver from [Operator of Will with line Rob Baird.

Rob Oliver

a couple Thanks. questions for So, me.

gets about year like of geographic closed? how So, for Marc the with I time it now? -- then, contemplates December 'XX Asia, period for are where guys year a you late and guidance tough. a Huffman, deals geographic does a quick continued we to And a kind the struggle. the sounds EMEA sound in follow-up. you. breakdown area know tough relative And like success then, close. I'll has Japan strong it sounds you It North you. I -- had how From perspective, just full right start like of kind had been talk for to a was can but some maybe America, And

Marc Huffman

Sure. what we what and in about Mark elongation. talk of can been guidance. of describe have terms would then deal describing a saw is I'll QX in start, and I uncertainty continuance we

in in you energy, strength mid-market. in in softness and think strength right. I specifically, Europe, it There hospitality new industries, was some and then got business APJ broadly travel, some Japan

In the guidance? of terms

Mark Partin

we as we're in going America. this marker APAC into at look and and seeing as carry and in part strength We a similar. very pipeline our demand, year, it's would think forward the of also I North what EMEA,

we of going that's first the in believe half year, So, continue. the that to

Rob Oliver

now? about you're FourQ strategic just you then, still some you And and at And I products heard the quota. all you products, the on sales I strategic changes performing we're FourQ. don't Can I know how about mentioned talk think And of making in the talk call. that they're early guys

got SAP strategic you actually, to this that you think, year. pipe, approval sense I on the setup may a for get for wanted products Thanks. mentioned have but for just the

Marc Huffman

We live in we of of had up AR of a X say number last XX% the some nice XX%. Overall, year, I were for strategic Yes. the and year, the end that would business points, bookings FourQ products. is our wins. took year, customers AR.

call well across the We components that products. continue variety strategic to would perform of we a

largest FourQ, if have had talk in IFM, IFM it. as That of about about real I relationship. element had just it history we it, in multiproduct a talked this win we which the significant the SolEx to SolEx the win,

we of same those But large, continuance uncertainty still continue that of So intercompany. of cycles. all of in the elongation things some strength exhibit and and by subject the to macro to

PQ objectives did FourQ, achieve through in As you the achieve one of did the SolEx intercompany which for process, note, non-trade we of product element quarter. integration the the year did which to primary get the with was on the we

Operator

line from BTIG. Matthew Will VanVliet for moment come our next of the One question. with

Matthew VanVliet

and quicker there point jump-start I a and might themes performance overarching your to the the think a wanted of altering dig just 'XX some the macro around -- the bit mid-market little in see just, weaker else Didn't I hear Mark, little in you have of prepared little anything the bubble comments, into sort of maybe much Did that help to on up guess, anything or that see mentioned impact Maybe greater side. mid-market the you you the performance. I there you on to that? you're was and although a to bit reaction a

Marc Huffman

Yes.

observe acceleration, an it exhibit longer area It of took the If in QX. demand. in for exhibit you behaviors, several execution, strong actually quarters, did mid-market the look did macro but of in to QX, that was some high backwards we that we

has velocity the itself. the say, really healthy uncertainty would top But all interest I funnel mid-market through there interest in of the funnel geos, still included. is in and affected the in markets

respond down funnel observation the Things and that, of how we remains that decisions that is win terms velocity challenge rates conclusion, to through our In steady go bit. a of there. to

we the the making continue markets see of in some we want to the study as win that ones spaces we macro and just sort in So, uncertainty. that mid-market the we pressure sure we to to play win the

Matthew VanVliet

sort the you at you of then either headcount that's and impacting And any Helpful. feel How initial Okay. as towards other that? of companies, deal tech, or sales slightly look as company, look look a ahead as potentially operating impact customers but reductions at they types Thanks. pipeline existing number a well. future you large in re-negotiations or with of some of sizes do any very like especially across in smaller some the as renewal maybe your in on industries business

Mark Partin

few Yes. good things It's question. a that observed. There's we a

QX, strong in in fourth the very quarter. user think I we had a expansion number

our and the So, land inside accounting ability and controller’s office to continued. expand

The taking important is going place. be the where cuts go-forward to

the or the that and I would the of back-end finance to the So and environment. think enterprises back-end we of front-end a and the continues be accounting house some strengthening the fairly indications stable have house,

I'll products. a also pricing not of strategy are and part strategic users add our that

the So, for part through I that rationale we're of strategic moving think the to realization customer was portfolio, drive for through which value pricing able value strength. forward

Marc Huffman

well impacted observed think concentrated we it Yes. to And not don't regarding awareness as in reduction. our there. with to other anything I headwinds particularly tech. many Obviously, you've reductions any high more broadly do a I as out I performance, that in the uncertainty any bookings wouldn't say organizations, in pipeline got are organization -- the

Operator

William from come the line will our One next Stotler That of with moment for Blair. question. Matt

Matt Stotler

on first with one to guidance. just start Maybe

next macro what sounds appreciate guidance like terms things quarter. color the of top in the and of little for at of growth, gap. same RPO you perspective. right, initial were a it a a there, disparity billings seeing last I seems line from So the growth It for very, lot about a to talking ARR a exit that growth, XXXX I you're like very and of then current When for look there's a XXXX, bit bit little clear, put and rate

-- double couple what bridge of versus double-click the seen first if what's that into months would seeing, you helpful. embedded XXXX 'XX here in and you're just maybe what be you've XXXX on so, click on gap, exiting of could And kind help of

Mark Partin

I Thanks. appreciate Yes. Yes. that.

to around to do particularly has of guidance very reiterate time macro philosophy with where like we're being today, a in maybe that is our some the pragmatic, environment operating in. in Just uncertainty there

Our that we be range. guidance a philosophy continues to want to provide

conviction deliver in and when these changes position we high accelerates, a particularly to have from. build feel We that that in against, If good can or on we and times. execute that demand we're

part then, stated, that, comps, contribution was due from and And We're inorganic which number. sort think coming that year, When we're of near-term particularly is it's out last that And tough I to is look strong is some the QX, have important the a or the in question important. at growth the half, in XX-month disparity of to of have stages that a lapping trailing that that some signals that as of the we environment. to I later billing through headwind good a FX the of we had also a example I bookings also you we related working realize around particularly of decelerating QX. second think FourQ lower-than-expected macro

we So, QX. to in from December and got where off that that's really how range we jump

Matt Stotler

it And are early a beta customers? Any Accounting one the helpful. BeyondTheBlack offering? you the what on you've an maybe clear, And the announcement, year. from line. was Is at very gotten very resonating? feedback exciting BlackLine just for that update very then Studio for hearing time That's that And Obviously, follow-up. then last

be time talking QX, summer I there and the update said think would line heard I were if sounds too. on you helpful, like, previously it correctly, or over you the some you about

Marc Huffman

the with line. Starting Yes. time

bunch ERP you it. I I think kind QX. high, That's that globe, people. around of think processes standard there orchestrate different think organizations multiple and systems, that tells have business a large about through complexity and distributed workers QX really to accounting across right complexity multiple resonates systems way in those being of which border of summer is together, with to processes the create the ability Interest all the that, the tie

say, a controller vision the tabs too our Matt, to And about early in going on value creating office and good it. obviously And early CFO. towards broadly long-term It's platform indispensable phase. the adopter to the a driver We so, really anything I that's say think we more would of to there. how of keep it's that's

Operator

with One will That moment for of our Chase. line the next Bora JPMorgan Pinjalim from question. come

Pinjalim Bora

can the what year? of understand over how seems Accounting the on say like it's applicable you Accounting have? you line, -- is or customers early, Marc, drive Studio the maybe I kind plus next Continuing And maybe help Studio X,XXX ARR know but you might us very -- it that that would to uplift

Marc Huffman

Yes.

box at workloads it and and applies demographics I especially the to the our for of you customers complexity complexity do think based least Pinjalim. we it, and the on appreciate I to them. think time that the put it's -- XX% question. size, in the them the on the It's of of thinking nature way XX% I premature just ARR about be uplift, to

really component come do terms expansion itself over about broader of that impact sources these time The customers the processes charge direct better we for they're revenue complex high integrating bill one an comes their will ARR -- of platform strategy have, to is some say, of I automation of first some life indirect it talked in Investor some it to for data and that net to multiproduct would of component, it's have. retention, ability ability impact at the business Studio and making these our they that we the solutions, and and the direct Accounting things some in then have and How from Day.

Pinjalim Bora

for you to you some Trying on than it. conservatism if driving trying pardon, sales the to since one understand Got you're maybe Understood. more understand, the have And Mark, in Thank little of changes, a layered Yes. also bit guidance. you. usual.

a has little You peak say the given the year, heightened of this in been going bit philosophy guidance uncertainty? there into a

Mark Partin

understand I nature, in of the which, that It's got philosophy given model, high the a business previous the in we've small base, fairly a consistent Pinjalim, revenue percentage the of forecast. years, recurring predictability services, question. had our forward a confidence the we've fairly

The everything learned saw key we've the and that too of exact the from last it, deal we return is on forward. of we what from took rates in environment, be to our closure forward couple timing trying extrapolated quarters, demand to forecast to timing we're that done ability Without and we like the and improve built returns, pragmatic. in build past. when and feel high actually -- similar in we've There's able range and to very off or conviction if our provided. of upon what we've It's when to the execute what cycle demand

Operator

line the question. One Joseph Meares from come that Truist. with will our And next moment of for

Bobby Dee

-- to actually It’s the recently about signed great or have wins I'm your that the for Dee there? any led if are hear updates us any addition curious I there with Joe to to on the but new Thanks. logo pipeline partnership follow-up. Bobby then Starting And to tonight. Meares one off SolEx, Has Accenture. with strength

Marc Huffman

that's did Accenture. early embedded existing phenomenon. be being results. more are still QX. And doing some pleased of productive SolEx, quarter it's pipeline the so. they that with influencing a our always contribute to partnership, names, that your through customer and in us, new are we with we them, real should But some without big the relationships with They obviously, able was very feel point about exact influencing to announced building performance Starting are they they and Albeit customers global like with win sales, with have Yes. our name with, a they we

in influence We more in have broadly, on. Europe that great they've Germany, examples America North had Mainland had examples we and

early, still I'd it's productive to off So real start. a but say

Bobby Dee

think curious XXXX? ERP That's there. by the BlackLine you of many I important utilization some expand last little with integrations, all how think switching talked currently that a I'm based plan has? bit. be quarter seems customers, to the our last our recent connector great. NRR do And pretty conversations gears on I color platform And in you about I many And a quarter. X% from it how effort. in to appreciate

Marc Huffman

-- for Bobby, the Yes. one, I ways guess can you, in I'm ERP amount integrations. sure I not of some quantify

and very have specific embedded cases connectors. with use purpose-built We

And so our higher we've -- as a all people is big part a land keeping you and platform part support and we of connectors mind APIs. BlackLine revenue net strategy, for important Microsoft of would We itself our the strategy integration and an retention the and of or from those platform the Accounting get names in we as Studio, the Then have et connector those connectors, announced who use -- sort those SAP, our cetera. expect, well. that with the recently they Oracle, strategy like expand

the APIs strategic. so really, to And to really, has ability write think, become unleashing on I

had providing year large are who and landed last those some number a of customers sort on utilizing great feedback live, it. We've of coming now

had item tail this create theoretically write that the connectivity. of longest advent And ERP you you if theoretically, of with list the was the at our companies APIs, so, there, even to the could APIs of and out

So I potential. can't many. really But can you about the how quantify excited tell, as

I continue we'll to invest in think it's strategic. that. And

Operator

will line And for that our Raymond of the Sklar James. next question. moment with from come One Alex

Alex Sklar

growth I two-part medium-term Great. targets. the know to on one, this Thanks. but a question reiterating take who don't wants

was growth medium-term impact December I well if return funnel headcount And with those you targets? any really timing in changes to of those the Thanks. top performing supports quantify expected still directionally the currently So the that, think levels. growth to if color the first, Can quarter. growth you the said pipeline

Mark Partin

Thank you. Yes.

line. I does we extend the start with the time question think took December the I in action not can out

opportunities at rule question? for with like sales [ph] traction, for them we ability XX of and go-to-market force GT, the to then both more efficiency, our we're and in operating our as for in growth we of feel part the the more In the And fact, look targets the drive accountability. second areas execute medium-term product, to making particularly around

Marc Huffman

Yes.

has the pipeline transition the between view meet like to wouldn't detrimental to and the have our ability annual of that I action adequate the suspect In impact translate to objectives year, into the terms XXth of this that the to we we which plan sort I meet with month hard pipeline. took regard of anything objectives, that. feel to XXXX a

paying those build we're to it make the objectives, to as We Alex. that midterm the sure capacity attention back close required are to XXXX to becomes meet model signals bringing capacity

Alex Sklar

That's helpful follow-up services Partin, nature that's quarter-over-quarter quarter? just onetime decline for you fourth there there? you'd context. first timing? in the driving great. I the out Is quarter Okay, of Anything that kind Mark versus guide. Is just call anything one on guess,

Mark Partin

Right.

So, off a of to XX QX. it's XX coming

I Last had year. think you, the in that's FourQ inorganic remind in would -- we number I last one.

year of a are Secondly, a the last seasonal. strongest quarters strong out of typically XXXX QXs came one very year. of was last year, our of we as QX QX into of strong

also extra strength comp tougher So, for year's quarter. special, and QX sets the up was that last this

Operator

next with Koji of of our And come will Bank question. for that America. Ikeda moment One line from the

Koji Ikeda

Huffman. for Marc and Thanks Mark taking Hey the Partin questions.

macro macro I more appreciate go back a gets had, me. Just and assume gets some if of net might it I from thinking a the couple pragmatically does key sizes about I question you maybe that visibility. the flexing deal commentary does, from And little be metrics to that down, bit it But more revenue whether assume of are guidance a and the cycles ask guidance to directly. nature? does worse? here. the guess be you or directly, it high retention anything you maybe to there, little Just curious wanted about maybe worse if understand guidance a the or the sales or all how thinking that

Mark Partin

first Yes. I rates, closure in we've the cycle at and timing half it. that now. way the and pragmatic year seasonal quarter. look We're to of extrapolate seems that -- that. takes this couple it last of is QX case the most our sales best for a through we've what of appreciate guidance can, seen Look, terms takes seen in the quarters that we in what in

impacted consistently We quarters for the two with have, is moving early or extrapolate sort I this and think, being us. the the right by year, three impacted so closure part approach macro to seen being of of decisions now in couple a and that that rates --

We metrics. a in but on we environment other that priority have for this view emphasis don't drive macro to is us. guide ability our of is and products point the the notwithstanding of metrics, our strategic other to base regard With customers is that and

where of be we coming saw growth the the and And the that so, the from expect too. growth to move year, of profile early closer that's would base at last to we this XX-XX, -- end our part year,

a both think, has also, as expect that ARR year, revenue part in that in and this to FX be I we and numbers, some the the damage of We headwind, billing mentioned too. the in and early

of into So, this that's in to assumption, what seen our put current is year. sort the half quarters last we've of these first working that extrapolate of and the half

Koji Ikeda

questions kind or walk non-GAAP cloud onetime I is? the we that maybe basis computing And more you, going getting ask quarter, for something of on something can forward? the that saw Could a this may cost. this implementation in a this on here. Typically if anticipate you through the just reconciliation us quarterly Is is weeds, what don't the a follow-up impairment but I for in of an press release numbers on

Mark Partin

implementation Yes, quarter, our for that third-party quote-to-cash the recently tool in that from the had expecting. delivering lengthy sure. fourth of shift a benefits been Look, we we decided what were -- focus a to fairly we wasn't

that, of part implementation million. project worth off about a what had and from wrote sort past as off three-year the so of we $X costs been on the And

what that's that so, saw in you reconciliation. And

quarter moved And that's that, and as our from in a fourth on so, we've charge-off.

Operator

One moment Piper Sandler. the question. come for And our next that will Bracelin with line of Brent from

Mauro Molina

Mauro is for This Brent. on jumping

two from Just us. questions

the my strategic question part attach of the is rates. product So, first on

out of Analyst the in the and single-digit I terms year? what guide, how mix overall those are think of mix think products products. products the of And at out the to the revenue the called rates year Any Day, strategic contemplating out call attach you year? full noteworthy about in as you most then, for you for of terms changes closed

Marc Huffman

a TAM have terms of first The refresh that start the to one. I'll attach view sort with in get rate basis. the and quarterly there, on Well, we of the go we don't

the with guide of and new do live, a including in the of off to a the in of we strong some strategy had billion nice we, real top strategic report of our customer our And I year that wins nor $XXX customers know performance, then for like entries, AR uptick, could number then on on our expansion, see and platform. payments with previously, end journal don't platform I our strong IFM, there, processed, the gets of in as how the or quarter, up large had, sort continue we applied much strong mentioned additional actually quarter and opportunity largely throughput back say cash head, via you close for So, smart continues on us. like-for-like the a terms at some products lastly, of would took come we that. I in

Mark Partin

Yes.

second that increments On close, into target core end right? to range. that that top had of global in In to we past here where, hit within year us products. 'XX, XX% past strategic year, continues balance the XX% a think And portfolio, for the XX% balance, of with try financial for this reason part a to to we've And XX% new managing the year, along want XX% to X-point for XX% a full mix year. the for guided product we the and be the a to right upcoming years. right of previous in to goal going this of this I XX%. would question, And see We're then be to the would with XX% is along

that's what So, towards. are and we thinking planning

Mauro Molina

the win maybe kind or it. of just us Got just function competitive and remained been broadly, around of the just that one in call changes mid-market. deal And changes softness is any out? a Have any environment have That's EMEA you'd there there last you. from Thank there, rates has helpful. in the then more the very been then slippage? And

Marc Huffman

we declination to phenomenon So, is of observing decision. are a EMEA mid-market, that go and actually that there deals the

course immaterial, if deferment, the toggle phenomenon the of X in will. Win or biggest you rates, steady. they there. sort my of X is opinion, by the conclusion Steady over So, And less time. points, so meaning deals reaching

Operator

for our question. moment next One

BMO. from come of will Daniel with question the Next Jester line

Daniel Jester

Apologies some if background there's noise.

going one deeper me. it are. for Can improved And that if metrics consumption within how your you you products. with much Just that's products customers those your of clients color strategic you. or just on Thank you them? penetration sort products, be like about already consumption how deeply us, new gave the remind grow, customers the and appreciate the solely all strategic they for how I adopted you get new penetrated have think metrics to can as within and is these

Mark Partin

Great be to question. to those penetrated, Look, digits. that AR be -- X,XXX customers, the continues nascent the the out is hundreds. transaction highest still the and from IFM, matching other of And continue our single still still products that's and to number in cash in

into opportunity -- the So, is there to that base. sell for

way land absolutely to modularized, within expand the single works within answer question yes. your and can build a account. strategic The way The on and can customer? penetration land expand is strategic we've pricing around products To we the and further our products

Operator

line KeyBanc with for Capital Markets. Beck moment question. One of Josh Will next our come from the

Maddie Schrage

My Josh. Thanks higher is for Maddie first taking one This level. guys. Hey for my is on question.

and QX. Just XXXX budget out how in than you about IT fit in changes And in you follow-up then that is, my bookings lower guys expected prioritization. obviously, wondering you are where thinking called

those into we QX, Just get some trickle Thanks. than of bookings deals and wondering if expected? might would better

Mark Partin

you. Thank Yes.

that, to QX tough move in macro. this about we slippage, as deal last So question from on QX particularly that into we've -- predict it's

the about is that pipeline right lost. They way think to think some we've our to continue are form deals in not I of be those that funnel. So, pipeline

our mentioned win competitive be continue rates earlier, Marc to stable.

closure Our gap we see to be continue strong rates macro the to impact. interest where and close for trying that is levels

that So, it's do continues whether these think, regions is many a within I lot uncertainty QX forward, not customers. or macro or with and to of

Moving to the first question.

CFO, controllers and drive it the -- the serve can transformation. when see budgets to stages in So, the is budgets, is And those you we you'll the the there's CFO in CIOs particularly need, issues, with on CFO war in a margin see other a areas. do which IT have We a within of with earlier uncertainty in re-prioritization see a greater and then around market and thesis talent of automation margin market, involved controllers, certainly obviously do that more as doing because has and those get early digital for to efficiency office or and said you'll but retraction, -- macro either pressure a in and Marc and to his less. and you'll re-prioritize recessions see expansion, more

gate they're a we spending. product start prioritization So, the first the in that being ROI ready out high of to think we when sit budget

market. so this timing, about think into we how that that's going tough And know to environment the year, from the but

Operator

for with DeGasperi moment Andrew line question. Berenberg. One our the next come And that of will from

Unidentified Analyst

taking have that. the the little between I'm Stephanie quarter added are was Thank new your this if elaborate for on could if question. this customers, the you specific what you. are new products Hi. a and that mix new Thank you customer on with wondering popular bit for This there is whether driving Andrew. growth you customers? And customers or

Mark Partin

them Yes, over customers --we little of interesting. today, enterprise. about have Like a X,XXX half are

space. -- is given the or million of then velocity expansion the $XXX And are quarter, Some and is the we million. mid-market, number the a any describe see we the over customer other often would in half company below mid-market $XXX in

onto enterprise more imagine, you size. As larger the customers the platform, are coming there's mid-market at much a but might

the gain in would mostly think we on to average each So, number. the mostly ARR quarter enterprise customer number, in but the of be mid-market growth

customers And a each is in from around, answer to hard necessarily. there is of begin particular then case, on those. And financial close with start and product so, average. an your they It's a just not Most the specific and driver today to that's that there. a driver or put question our up build to

Operator

of line from And next Fred with the question. will Lee Credit our come for moment that Suisse. One

Fred Lee

protection a environment. selling the see tough in to Good margin

it regarding then question Another quarter-to-quarter, is you as clarify, just as a to And macro. And say QX? deteriorated macro equally follow-up. would just difficult or

Marc Huffman

Yes.

would a to it Just call -- I continuity.

did improve describe, nor think It I degrade. of a would continuity didn't was it I our observation. it

Fred Lee

And How think about demand services lead there? we the mean the how margins to kind I highest demand in opportunities? of Shouldn't outperformance and we should that that question then, identify of the that? Okay. services my some of should is, we incremental saw subscription posted history. second -- the about recent company think

Marc Huffman

is a through have as time what focused we the revenue. how execution. on there that turns we it And that into one, of in inflationary rate engagements, strong Potentially, I time, that improved burning proven drive and can rate, has spent lot In out. we think was occurred burns hours these

them we execution demand So the how in across which of then performance. I in we have for additional to our that focus services monetize think, to rate and and on level installed existing and we make investments some improvement, services base that focus led rates utilization continue billable,

Fred Lee

normal a quarter, All bit talk happening what's little Mark the Can right. underneath cash Great. you looks one Accounts big greater in Partin. actually seasonal. outflow And about a saw than there? receivables that for one last

Mark Partin

Yes. with will I that in on follow-up a do you you I'll our call what, tonight. tell

think I the there's of ordinary. nothing out

be as that time looking So we'll at at investments. cash could spend if a our you're it flows, possible, looking little just bit that of

return secure the We a have that investing sheet. $X that. We're investment and in a safe, billion balance earning on on

more So, our answer have you're looking on it's follow-up at. call. a possible that I'll for that's what you But detailed next

Operator

Enders our the Steve with that line And for of will question. moment come next Citi. One from

Steve Enders

reorganization build with the out I sense sales just through to I some work in little the putting better further outlook. you're investments a more capacity how the a sales get thinking dollars or to guess the how particular and I to thinking of bit there. about you're side, guess, on year about on changes want just the Thanks. of

Mark Partin

to we lot putting the slack Yes. one the we sort deal as the and we over COVID a of The out hiring years talent started that early days out Day then demand of rehydrated system at took Analyst has couple talked increase, of and the of that great of a the capacity in street. about stories with sales last of been the during of as

And so, capacity when our was high. XXXX, very started we

What 'XX the adjusted some on the capacity demand and help area that that sufficient into the to streets. that is of changes is stayed an we've drive for or we've where about go-to-market Marc effectiveness efficiency going the expecting. we're seen within talked in organization

And so, those are the changes that you're seeing.

in investment growth our add some members in us, very that to is year, so sort some what good customer-focused having this feel automation we've team, early and For investments profile team made that the in to without we're we incremental a good the is beyond in cost in position of more back-end revenue into our going be. expected

Operator

Goldman Thank Hotchkiss you. the One of moment will that from line come for our Sachs. And Adam with question. next

Adam Hotchkiss

of bit outside from of the the performance what's workforce go to places deeper think some we've margins that you seemed the gross reduction fairly left the finding that little to noteworthy. first there? I relatively sort December discipline relative pretty seen broad-based there efficiencies in announced you're and comparable of dig the a on Could half guys is what you on

be would helpful. there color any So

Mark Partin

Yes. Thank you.

on well higher able margin a migration through as we And headwind. the organization in been impressive operate their you getting higher and services as in utilization and drive business number, still better higher with I rates, X-point quarter the the to where that's creating gross effectively. start year, to were margin, last GCP, in uptick work an a still fourth thoughtful just quality very quarter, in the is which each think to finally saw They X.X XX%. that from balanced to a to operating higher performance

sort So I that's leverage. part key think the of the of

broad-based you efficiencies discipline. had as cost Throughout -- all well the as P&L, and -- on fronts, though, on cases all we've fairly said, as

automation. we're few like of over we and these investments, moderating recruiting of efficiency support out of past years. So addition had in feel belt areas And the place good to example, in growth areas a our in to areas now we're in in just are G&A, key the infrastructure built we've and tightening, to, for

now better coming the sales mentioned our the out earlier, the In the of second opportunity, of sales of force of coming based are giving and of productivity rep we on the year year. of And product year. as More have upsell and obviously lot sales we we organization, I more timing in the products. are a out hired more strategic marketing half when ramped then,

set. of So, with our a ecosystem motion more and our with flywheel there's product

a of consolidation improved [ph] beneficiary organization, better product driving teams, our for the our of excellence vendors, through center some consolidation our been efficiency those through engineers a moderating off-shoring in development that's things of and building investments, testing Finally, developments for like tooling of tools. great efficiency and

getting of company the globally out very drive across a cost focused investing future on a where still done the the how for yet number teams good management of So, the to business, job of places and have have be efficiency.

Adam Hotchkiss

once the I helpful. building Great. Yes, for a things process think about this that that And as especially quickly but be how into that's your Is signals demand know variability cost may looking you and really macro in change? challenging you a the given the your growth, bit can see more targets? forward, lot what's accelerating medium-term like base

Mark Partin

partners those base think to demand great customer of example It's one a that of twice, is that's and seen that I is team a strengths, signals. have frankly, and our base now interesting. we see or strong and agility of strong very ability the A We've salespeople. very the

markets demand. the base, we're we're got get able to of sort our you with plenty where account managers, be success in coverage for our or opportunity. demand demand so, to coverage teams will, of get our seeing flood if increases customer If we've that the to existing to And example, in with zone, to able

as today. how times of get management to is you long hires, our do where when able you capacity with sort The on that given capacity part to alluding we have manage lead you're We're that tough sales board. are

'XX, closely it. for of 'XX Marc those into so looking mentioned, so we're And very we'll looking and prepared be sort signals at that

Operator

with JMP Securities. of question. the That from Thank you. next come line Walravens One moment Patrick for will our

Patrick Walravens

all, And time… of me Great. Happy having you guys up and Valentine's let end I wish hope everyone Thank a Day, first you.

Marc Huffman

Likewise, Pat.

Patrick Walravens

software So should deals of Mark, are for closing shortage accounts if challenges that is accountants? And productive? so, there a more make into what the translating that in

Mark Partin

There's what accountants, that along them challenge And a the always changing. shortage been about same. XX.X the Is shortage to think to Yes, there million think, I accountants. markets it's world the unwillingness a of risk do. of It's our we so. great We -- comes shortage something from around think has that help all of accountant doing a The our reach I the got change. It's XX to they’re accountants inertia. accountants. are There's accountants? million

of what how turn at so, what on into to are of accountant. level we're And talking And are great on opportunity, focused we focused and is sort need the always we is to what that Pat.

So, that's, that's think I -- obvious.

Patrick Walravens

transcript. the is, ask so we on will follow-up going my later, and as well then it this are And this million get X to be you people might

has How through it far? quarter. the so gone X.X-month You're

Mark Partin

in early we early us. and seasonal It's quarter. expected for quarter, the stage. this it's quarter what about And the at a it's Again, it's in

Marc Huffman

for to our say would be I annual month us, of happens month's books. closing of worth Yes. given their year We've lot it's a the that It the most experience. seasonal continuity. just of got are a clients a busy

we've I been of what same far. experiencing thus just kind It's of would continuation the So, a use word.

Operator

speakers, Thank turn this Mr. showing Marc in the over I time. any now I'm closing queue back call no questions Huffman you. further at like And remarks. the to for to would

Marc Huffman

to your for customers BlackLine. behalf send as employees they you in your finance I'd where accounting Have our like again interact need well operations thank day. with clients in you encourage investment their the of world, in them great as throughout world and efficiencies On interest you to as Thank and our team, a the BlackLine. management the to

Operator

Thank concludes you participating. This all program. for today's

disconnect. now may You

BlackLine (BL) 14 Feb 232022 Q4 Earnings call transcript